Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

May 19, 2006

Market jumps on lower supply

THE eastern market indicator jumped 16 cents per kilogram this week to close at 729c/kg.

A smaller offering combined with the weakening Australian dollar were the main reasons for the good lift.

Of the 45,341 bales offered, only 8.3 per cent was passed in - the lowest rate for weeks.

All Merino fleece wools enjoyed substantial increases in value. Remaining wools were also very solid, with most types attracting higher prices.

Southern region

All Merino fleece wools received enormous support, with price rises of 20-50c/kg recorded. Wools of 18.5 micron captured most attention.

Merino skirtings also lifted considerably, especially better styled/length types finer than 19 micron.

Crossbred fleece wools strengthened slightly, particularly 28-30 micron types.

Carding wools remained very solid, with better Merino lambs increasing in value.

A total 54,000 bales has been rostered for sale over all three centres next week.

Prices may not follow the same trend next week. This week's good demand was caused by the squeeze in supply and rush to fill orders. However, if new business is confirmed at current market levels (between now and next week's sales), the market may continue to improve.

Wool supply has suddenly decreased and it appears that importers have not been prepared for it.

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