The new year started on a very positive note last week with all fleece categories in the range of 20/50 cents dearer with the finer better quality types most affected and well sought after. After the Aussie dollar fell to 0.855 US cents prior to Xmas most exporters traded any existing stock into China and were generally keen to go into a long position last week. With supply fears evident buyers prefer to accumulate and sell on a prompt basis rather than forward sell and then buy on a volatile market with supply fears. Last week we saw healthy competition between topmakers/indent buyers and traders all keen to secure wool along with rising futures spurring the market along, however the exchange rate has now recovered to 0.895 and we have 72,000 bales offered Nationally this week which will surely test the market. China is reluctant to pay the new US dollar prices which are currently the highest for 17 years and are waiting anxiously for a possible correction this week, we believe most mills need wool for Feb/March shipment onwards and any downturn in prices will be shortlived. So we start 2008' with the price volatility and supply concerns that we ended 2007' in, suggest a correction this week of between 15/40 cents per kilo and then a solid market until Easter with the FX being the wildcard.