WOOL prices pulled out of a four-week dive at the Western Wool Centre (WWC) last week, ahead of no local auctions this week so brokers and buyers can attend Wool Week functions in Melbourne.
Small price increases across all Merino fleece micron segments and the Merino cardings indicator marking time at 895 cents per kilogram clean for last week - week seven of the annual selling program - was the first positive weekly price movement at the WWC since week 50 of the previous season's program, back in mid-June.
However since mid-June there had also been four weeks when the WWC did not trade.
Demand for the wool on offer last week was helped by the fact there was not much of it available - not at the WWC or nationally, compared to recent weeks - which helped stabilise prices on the first trading day last week and then push them up on the second.
The prices turnaround had actually started on the second day of trading the previous week, when the finer fleece segments of 18-19.5 microns started to gain in late trading, but not enough to wipe out losses for the week.
On the first trading day last week, those late gains of the previous week were generally consolidated in mixed trade.
The 18 and 18.5 micron fleece indicators lost 2c and 1c respectively, the 19 and 19.5 micron indicators marked time and the 20 and 21 micron indicators each added 1c.
The Western Market Indicator (WMI) also stayed put at 1449c/kg.
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"There were only 2813 total bales on offer, the smallest sale day (at the WWC) since November," said Australian Wool Exchange (AWEX) technical controller Andrew Rickwood noted in his regional market summary.
"The small offering attracted excellent buyer support and the prices that were achieved were very similar to those achieved at the previous sale."
On the second day, after 318 bales were withdrawn before the first auction call, buyers were looking at just 2301 bales from which to make their selections.
"This small selection has again attracted strong support, as buyers fight hard over the limited amount of wool available," he said.
"This strong demand has resulted in the market generally increasing across all types and descriptions."
Second day price increases ranged from 1c (19 micron fleece) to 21c (21 micron fleece) and the only loss on the day was Merino cardings which shed 1c.
The WMI gained 10c to finish the week at 1459c/kg, compared to the benchmark Eastern Market Indicator which did not move from 1342c/kg for the second week.
Fleece price rises across the week largely reflected the second day's trading, ranging from 1c (19 micron to 1638c/kg) to 22c (21 micron to 1328c/kg).
The impact of small local auction offerings was reinforced by a national offering coming down 10,577 bales to 44,786 bales, so buyers had less wool to choose from right across Australia - a far cry from three weeks ago when the national offering was initially projected to exceed 60,000 bales the first week back from the annual three-week sales recess.
According to AWEX statistics, in the first four trading weeks of the current national wool selling program, 204,219 bales have gone through the auction system, an increase of 20,350 on, or 11.1 per cent more than, for the corresponding sales last season.
The AWEX statistics confirmed local brokers' assertions that last week's prices would be helped by a return to more normal offering sizes for this time of the season.
"We were sure there were some smaller offerings coming," said Westcoast Wool & Livestock auctioneer Danny Ryan.
"There's simply been too much wool on offer and buyers had seen too much of it before," said AWN State wool manager Greg Tilbrook.
While 23.1pc of last week's WWC fleece offering had been put up for auction previously and rejected by buyers, the small size of local auction offerings forced some buyers to reconsider the reoffered wool.
The wool market was also helped by currency movements, with the Australian dollar early last week diving back to US69c after spending more than a week above US70c and climbing as high as US71c.
International wool buyers and processors generally pay for Australian wool in US dollars, so the lower the Australian dollar sinks in relation to the US dollar, the cheaper their purchases become.
Possibly a reflection of the sudden drop in size of the national offering last week, the WWC buyers' list on the first trading day was topped by the two largest national wool buyers, Techwool Trading - largest buyer who is normally in the WWC top three buyers - and Endeavour Wool Exporters - second largest wool buyer but not normally in the WWC top three.
In third place was Chinese indent buyer Meliwa.
On the second day's WWC buyer's list Techwool (top) and Endeavour (third) were joined by the largest Chinese indent buyer Tianyu.
With no WWC sales this week the national offering is down to 40,116 bales and the main Melbourne wool selling centre will trade for only two days, instead of three, for the first time this season.
WWC wool auctions last week joined Melbourne and Sydney wool selling centre auctions with net turnover so far this season exceeding net turnover from the first four selling weeks of last season.
Prior to last week's auctions WWC wool sales net turnover was down $1 million on last season's equivalent turnover, according to AWEX.
But the more positive results last week took WWC net turnover for this season so far to $43m, up $3 million on last season.
The Melbourne and Sydney centres' turnover had been ahead of last season's since the second week of the current season.
AWEX figures show that the first four weeks of wool sales nationally this season have generated net turnover of $275m, an increase of $49m on the same period last season.
