Weekly Market Wrap

Adrian Field Trading Manager

With Adrian Field, Melbourne
Assistant Trading Manager

September 12, 2003

Dollar up, market down

THE eastern market indicator finished the week at 911 cents per kilogram, 16c/kg below last week’s close.

Sharp falls occurred at sales on Wednesday. This was probably due to the jump in the Australian dollar combined with large volumes of wool tops (processed wool) being sold into China.

The market stabilised on the second day and only the broader wools were affected.

Superfine wool (18.5 micron and finer) prices have improved over the past two weeks, which is good news for those producers.

Passed-in rates climbed to 22 per cent in the eastern market.

The wool industry continues to confront change. Trading of wool futures on the stock exchange commenced this week, joining grain, property and index futures on the exchange. With China being the largest importer of Australian wool (one third), the contracts were based on China fleece wool specifications.

The 2pc wool levy is likely to remain if early responses from grower bodies are any indication. New South Wales, South Australia and Tasmania are all in favour of retaining the levy.

Provided the Australian dollar holds, the wool market should remain fairly steady.

Sale volumes for next week should be similar to this week.

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