Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

November 4, 2005

Market falls despite stable currency

THE eastern market indicator dipped 14 cents per kilogram this week – its biggest fall in recent weeks – to close at 652c/kg.

Passed-in rates climbed to 16.7 per cent – the highest seen in some time. This suggests the sudden downturn took many by surprise.

The price fall is a concern because it was not linked to currency. Unlike in the past, both the currency and the market weakened together – this rarely happens.

Southern Region

Most Merino fleece types fell 10-30c/kg, with 18.5-micron wools most affected.

Merino skirtings fell 15-20c/kg and crossbred wools decreased 10-20c/kg, with 25-28 micron types most affected.

Cardings followed a similar trend and were about 10c/kg cheaper.

Sales will be held in Melbourne, Fremantle and Newcastle next week, with 53,000 bales on offer.

While the easing in the market this week was a surprise, no significant improvement is anticipated. Prices are expected to settle with the smaller offering.

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