Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

October 10, 2003

Signs of stability

AFTER another poor start to a wool selling week, prices showed signs of stabilising on the final day of sales.

On Wednesday prices fell considerably in all centres and the eastern market indicator dropped 23 cents per kilogram. On Thursday the market recovered 3c/kg, and the indicator now sits at 841c/kg.

Passed-in rates and withdrawals prior to sale continued to rise.

The Australian dollar again played a major role in the price decline. It now looks like hitting the 70 US cent mark - the highest level in more than six years.

The good news (for some) is that sheep prices continue to improve, particularly for dual purpose (meat/wool) sheep. There is now a massive push back towards the broader Merinos - quite the opposite of three years ago.

Some studs are experiencing very good times, especially those that have also received excellent seasonal conditions. Some are likening it to the "boom'' times last seen in the mid to late 80s.

The worsening Australia dollar, which obviously does not help our exports, is still the major concern however.

The market at least looks like it may have stabilised a little, and we hope this trend can continue.

Prices are expected to remain steady next week, however overseas demand is still very sluggish, so no significant recovery is anticipated in the short-term.

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