Wool prices remained relatively stable at this week’s Australian wool auctions, following on from the small gains extracted last week. The story of the week's sale results though was that wool prices expressed in the demand leading US dollar terms pushed 1.5% when measured by the EMI. Whilst local sellers don’t get that advantage just yet, it does present an indication that for this week at least, our overseas users managed to find a few more us cents to buy wool.

Selling started off very keenly, with 5 to 10ac gains across most types and descriptions. Exporters had reported a smattering of business available from predominantly Chinese interests, but again at very keen price levels and volume was not that large. All three selling centres operated on the Tuesday and the usually good sign of the last to finish selling for the day auction at Fremantle getting the most gains out of that renewed and slightly stronger buying interest.

The first auction day certainly looked like buyers finishing off containers to correct specs for either shipments due, supplying risk aversion to new contracts or building containers to potentially off load during the Nanjing Wool market conference happening next week in Puyuan, China.

The steam was taken out of the market overnight Tuesday, as enquiry dried up almost completely and conversion to new written contracts was near to nil. Overseas manufacturers and traders appeared to sit back to reassess the new price levels in both US dollar and Chinese yuan terms. This certainly spooked the spot markets on Wednesday as most wools reversed quickly back to the levels of the previous week’s close.

Australia’s largest wool exporting entity returned to the top of the Merino and cardings purchase lists this week. This activity certainly contributed to the better confidence of their competitors, whom sometimes look to that company’s actions to gauge direction. Competition from China’s top two top makers was evident and strong, but appeared to be more price sensitive than the trading operators.

Next week sees 34,000 Australian stored bales rostered. Again we will have the Eastern markets operating to two days, but WA selling just on Tuesday.