Cape Wools' Merino indicator sheds (South Africa)

Wool prices softened for a second consecutive week as the market receded from its recent high levels and Cape Wools' Merino indicator shed 3% compared with last week to close a t R65.28/kg (greasy).

Although the overall indicator has given up some of its recent gai ns, it still is 13% up on the opening level.

Buyers say a downward correction was expected following the sharp increase in prices, which saw the indicator gaining 18% in the six weeks from October to the second week in November.

A marginal weakening of the rand was also insufficient to stem thi s downward correction. The rand, at R7.05, was 0.7% weaker against the US dollar, but was 0.2% stronger against the euro at R 9.44 compared with last week's exchange rates.

The offering comprised 8 542 bales of which 94% was sold. Major bu yers were Modiano SA (3 199 bales), Standard Wool SA (1 956 bales) and Stucken (1 137 bales).

Average prices for good top -making (MF5), sound, long fleeces (less than 1% seed content) were as follows: 19 microns gained 1.4% to R87.29/kg; 19.5 microns dropped 2.7% to close at R76.84/kg ; 20 microns were 3.2% cheaper at R68.98/kg; 20.5 microns shed 3.6% to close at R66.57/kg; 21 microns were down by 2.2% to R 65.88/kg; 21.5 microns were 2.8% cheaper at R64.26/kg and 22 microns dropped 3.8% to R62.49/kg.

Approximately 11 500 bales will come under the hammer at next week’s sale. The final sale before the Christmas recess has been scheduled for 8 December.