Weekly Market Wrap

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With Brian Vagg, Melbourne

November 23, 2007

Confidence, strong demand, low dollar drives market

ON Thursday the eastern market indicator closed at 992 cents per kilogram, up 13c and just 8c short of last week's season high of 1000c/kg.

The Australian dollar has traded at a high of 90.150 US cents and at a low of 86.52 over the last seven days, with the average for the period being 88.979. The indicator in US terms is actually lower than last week's close.

The only offering on Tuesday was from the New Zealand Merino Company. Prices achieved were fully firm in comparison to the previous NZ offering.

The first significant increases in crossbred prices occurred this week, with most of the crossbred fleece gaining just over 20c/kg clean.

The finer Merino fleece recorded the biggest jump, with most 18-micron and finer types climbing 20-25c/kg. The broader types increased 15-20c/kg in both the Southern and Western regions.

All Merino skirtings and cardings gained around 10c/kg, with 20c/kg increases on some better selected types.

Demand remains strong for the better styled wools that have high tensile strength and low mid breaks.

The national offering was 54,589 bales, which was a decrease of 3648 bales on last week. Once again, purchasing was from all sectors, including a strong commitment by some of the European buyers as well as topmakers.

The national passed-in rate was 10.2 per cent, with 5556 bales remaining unsold.

All centres will be selling next week, with just over 54,400 bales rostered nationally. The Northern region sale will be in Newcastle.

Meanwhile, Marks & Spencer will be selling Australian organic Merino wool jumpers next month.

The UK-based company is being supplied close to 140 tonnes of 19.5-micron organic wool by The Merino Company over the next year.

This may not be a huge volume of wool, but next month 11,000 organic wool mens "sweaters" will be in their many stores and will retail for just under 30 pounds or $70.

Marks & Spencer announced their "Plan A" earlier this year, a $450 million dollar plan over the next five years to be more sustainable in everything it does. (Source: Rural Press, Marius Cuming)

New IWTO Wool Preparation Category definitions

The International Wool Textile Organisation (IWTO) has accepted, at the Congress held in Edinburgh in May 2007, an Australian industry recommendation to tighten the IWTO Wool Preparation Category definitions.

The changes now link the Wool Preparation Category to national wool preparation standards and create two classes of Single Farm Grower Lots and Bulk Class Lots.

IWTO licensed laboratories, such as AWTA, are required to record the IWTO Wool Preparation Category (eg, Classed Grower (single farm) Lot, Bulk Class Lot, Interlot or Objectively Matched Interlot) on each IWTO Test Certificate and in electronic transmissions of certified test data.

The Wool Preparation Category is reported in full on the Test Certificate and in the Test Certificate Number Suffix, eg, "P", "B", "I" or "M" respectively. These changes will be effective from January 1, 2008. (Source: FAWO)

Southern region

In the south, all microns received good increases on all types, but especially the better types.

The 17.5 and 18-micron Merino fleece rose by close to 25c/kg clean for the week. The 19 to 20-micron fleece jumped 15-20c/kg, as did most of the crossbred fleece of 26-micron and broader.

Most of the Merino skirtings recorded gains of 18-20c/kg clean for the week, especially for the longer and low vegetable matter types.

Crutchings and locks were generally 10-15c/kg dearer when the market closed on Thursday.

A bale of 11.9-micron wool (0.1vm, 76.2pc Sch Dry Yield, 70mm, 35nkt), typed as ASF2E, was passed-in for 40,000c/kg greasy (52,493c/kg clean).

A bale of 12.4-micron wool was sold for 20,000c/kg greasy.

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