Weekly Market Wrap

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With Brian Vagg, Melbourne

December 14, 2007

New season high for Christmas

WE could not have had a better close to wool sales prior to the Christmas break, with the Eastern Market Indicator (EMI) finishing at a new season high of 1005 cents per kilogram clean – up 7c/kg.

Better Merino types in the 19-22 micron range enjoyed good price rises. The finer end had mixed results, but was not assisted by a less than stylish selection. Once again, types with high newtons per kilotex, low mid-breaks and good length received strong support.

The 19-22 micron fleece closed 15-19c/kg firmer in both the northern and southern markets. Crossbred fleece closed slightly firmer on the finer types and there was a good lift in the 32-micron range, especially in the southern market.

The best skirtings with low vegetable matter and good length made significant gains of around 15-25c/kg. Most cardings received good support and recorded a small rise across the board when compared with last week.

As discussed last week, it appears we may be very close to the levels processors will accept before they start to look for other products they may blend. This holds true, as processors are not able to sell wool tops at levels to validate current prices.

However, the signs are especially good for the first couple of months of 2008. Production is at an all-time low and demand is at levels we have not experienced for some time. This becomes even more apparent considering the Australian dollar has been trading at historically high levels.

Most Merino types are trading in or above the 80 per cent deciles range.

The national offering was 62,065 bales, with China and Europe dominating the buying. The national passed-in rate was 10.6 per cent.

Close to 55,000 bales has been rostered nationally for the first sale after the three-week Christmas recess.

Southern region

The market opened on Wednesday in Melbourne, where all microns recorded significant gains. There was a good selection of mid-micron types.

The price increase continued until Thursday, when prices retreated. This may have been
due to the less stylish types on offer as well as buyers having already purchased significant quantities for current orders and stock requirements.

The 17.5-18.5 micron fleece finished some 25c/kg firmer when compared to last Thursday’s close. The 19-20 micron range increased 15-20c/kg, while the 21-24 micron category closed around 5c/kg firmer.

Crossbred fleece received good support, especially on Wednesday and Thursday, and
closed firm.

The best skirtings recorded rises of up to 35c/kg. Cardings also received strong support on a large selection, finishing around 8c/kg dearer.

2010 mulesing deadline now a ‘target’

The phasing out of mulesing no longer has a 2010 deadline, it has a 2010 target.

The slight, but significant, change of wording was seen in Australian Wool Innovation’s media release issued after the first meeting of its new board last week.

It read: “As required by the decision of the whole Australian wool industry in November 2004, AWI will continue to research alternatives to surgical mulesing to support the industry’s target of phasing out surgical mulesing by December 30, 2010.’’

Until now the word “deadline’’ has been constantly used. Page 30 of AWI’s new 2007-12 strategic plan states “the highest priority will continue to be commercialisation of the clip and intradermal alternatives to surgical mulesing by the 2010 deadline’’. (Source: Rural Press)

I would like to take this opportunity to thank you and your families for your ongoing support of Quality Wool and its expanding agricultural products. I wish you all a very safe and happy Christmas and a prosperous New Year.

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