Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

January 27, 2006

Indicator approaches 700c/kg

THE eastern market indicator has continued its trend, finishing 18 cents per kilogram higher this week to close at 691c/kg - a rise of 2.7 per cent.

Once again, most gains were recorded in the finer Merino fleece categories, especially 18 micron and finer.

Of the 30,084 bales offered, 8.2pc was passed in - again much lower than usual.

Southern Region

Similar to the last two weeks, prices for 17-19 micron Merino fleece wool increased by 30-60c/kg. Wools of 21-23 microns fetched another 20c/kg, while 24 micron and broader types lifted 10c/kg.

The same trend continued with Merino skirtings, which gained another 10c/kg overall. The finer end again jumped by more than 40c/kg.

Crossbred types strengthened slightly, mostly by about 5c/kg. Cardings continued to gain 5-10c/kg.

For all the good news surrounding wool prices, there was also some sad news in the industry this week. About 60,000 sheep perished in last week's fires throughout Victoria. Some farms/studs lost almost all of their stock.

Obviously our thoughts go to all those who have been affected.

Next week's sales will be held in Sydney, Fremantle and Melbourne, with 63,263 bales on offer.

The industry is exercising a little caution despite the good recent price trend, although the fundamentals are looking more normal with good premiums being paid for finer wools.

Hopefully the trend can continue, but not necessarily rise too quickly. As we all know, a sharp rise can sometimes be followed by a sharp fall.

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