Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

October 27, 2006

Wool prices kick again

THE eastern market indicator jumped a massive 27 cents per kilogram this week to close at 782c/kg.

Very low passed-in rates were again recorded. Of the 60,000 bales on offer, only 5 per cent was passed in. We rarely record passed-in rates this low - an obvious indication of a promising market.

It was middle to broad Merino fleece types that again increased the most.

Southern region

All Merino fleece recorded substantial gains this week, but it was 21-24 micron types that jumped the most. Wools of 22 microns climbed almost 90c/kg.

Merino skirtings strengthened by a further 10c/kg, with faulty types again the big improvers.

Crossbred fleece wools fetched an extra 10c/kg overall, with wools finer than 28-micron recording the biggest premiums.

Carding wools continued to rise, with most types improving 5-10c/kg.

Similar to last week, sales will be held in Melbourne, Fremantle and Sydney next week. A total 62,000 bales has been rostered for sale.

The concern over wool shortages due to the drought is obviously driving the good market results.

Could the market trend follow that of four years ago when prices continued to go through the roof, or will a correction come after two weeks of escalating price rises?

It is difficult to predict at this stage. The market is experiencing a volatile period.

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