The substantially weaker US dollar (USD) against the Australian dollar (AUD) had most buyers expecting a sharply lower market this week at Australian wool auctions, but this was far from the outcome. The local prices held on exceptionally well, perhaps highlighting the current buying strength from regions outside the US-dollar-using powerhouse of China. The Indian and European purchasing contribution continues to be influential considering the relatively low volumes/supply on offer for this time of the selling season.

As prices remained firm on the AUD basis, demand from China did eventuate with some clients choosing to lift the 20/25usc required to match the market price. This offshore buying was again sporadic but local exporters were trading warily, so some enquiry did appear to go unfulfilled. This action was not surprising as the local buyers and exporters were not wanting to be caught in a short position during a time when the market was going against not only expectations but against standard economic logic.

Again, the finest Merino wools at less than 19.0 micron were the most affected, negatively. The price gaps continue to concertina down towards the broader type price levels. A general 25ac lower price was offered for the wools in that super fine wool sector. Conversely, all sale lots of Merino broader than 19 micron achieved better prices all week. In addition, a strong push at the close of selling saw these wools finish the sales 25ac dearer and under strong competition, and best comp seen for a month of auctions.

Buying within the Merino fleece sector was dominated by traders, as the forex rates appeared to take the purchasing impetus away from the China indents and China top maker buying. First stage processor buying was more apparent in the Merino skirting and also the crossbred wool offering, but the cardings sector was commanded by these manufacturers.

A looming logistics issue may impact upon wool markets as Australia's largest tugboat operator announced an intention to lockout port workers this Friday.  If in place, no shipping vessels will be towed in or out of 17 Australian ports serviced by this company which will cause significant delays. Unfortunately, the container ports of Sydney, Melbourne and Fremantle are in that 17.

Next weeks schedule has 35,000 bales to be offered on Tues/Wed.