HEFTY volumes put pressure on the wool market last week but things are set to turn around as the size of the sales begin to return to more normal levels.
In total there were 53,763 bales on offer last week, similar to levels the week previous.
The Western Market Indicator dropped by 28 cents a kilogram on Wednesday but made most of that ground back on Thursday.
It finished 7c/kg cheaper overall, closing at 1157c/kg.
Larger falls were experienced in other centres with the Eastern Market Indicator (EMI) dropping 20c/kg to finish at 1111c/kg.
The offering this week is much smaller, 47,600 bales, which is expected to give prices a lift.
According to the National Australia Banks (NAB) latest Rural Commodities Wrap the outlook for wool is strong and strengthening.
That is based on the stronger market performance at the end of 2013 and an expected tightening of supply in the first half of this year.
NAB head of agribusiness for South Australia and WA Matt O'Dea, said wool recorded six consecutive weekly gains from early November until the Christmas recess.
"In the first week of wool auctions this year, the EMI has held its ground at around 1130 cents/kg, this is despite a strong offering of 53,000 bales," Mr O'Dea said.
"Looking at export demand, China remains the single largest market for Australian wool, accounting for over three quarters of all exports in 2012-13.
"Looking ahead, in the near-term we believe that the momentum in the demand for Australian wool exports will continue, supported by a generally improving global economic environment, historically low interest rates and a softer Australian dollar, which benefit wool exports."
Williams sheep producer Janet Liddelow offered 75 bales in last week's sale and said she was happy with the result at the end of the day.
Ms Liddelow received a top price of 912c/kg for a 10-bale line of 18.5 micron wool.
While some lots were passed in, most were sold after the sale.
The Ilfracombe clip was shorn in December and yielded 72 per cent.
Ms Liddelow said it was very sound and a good length following favourable seasonal conditions.
"I am also impressed with the micron, although we try to breed finer micron wool we select for bigger-framed sheep," she said.
"Normally our wool is around the 20 micron mark."
The Liddlelows run 2000 breeding ewes and had recently changed their shearing time.
Ms Liddelow said they had bought shearing forward from January to December.
"We try to get in before it gets too dusty and by shearing in December we can get the sheep in stubbles without wool, so it works better for us," she said.
The Liddlelows are long-time clients of John and Heather Higham, Culbin Park stud, Williams.
John Clarke, Brookdale stud, Arthur River, offered 211 bales in last week's sale.
Shorn in November, the wool had an impressive staple length with many lines over the 100mm mark.
It was Mr Clarke's 52nd wool clip sold through Elders.
The micron ranged from 16 to 19.5, which Mr Clarke said was on the finer end of what was expected.
"We traditionally range from 18.8 to 19 micron," he said.
"We select for the type and frame of the sheep and its wool quality and don't focus so much on the micron.
"So to get some of the micron so low is interesting."
Mr Clarke was happy with how the sale progressed and said most of his lots sold above expectations.
Two of his finer lots were particular favourites among buyers bringing in 905 cents a kilogram for 16 micron wool.
"I don't classify myself as a genuine fine wool grower so the prices for those lots are good for us," Mr Clarke said.
"Genuine fine wool producers would be chasing more than that.
"But overall I am very happy with how things went."