AUSTRALIA'S wool and dairy prices are showing some buoyancy, but grain continues to slide with little hope on the horizon.
Despite the high Australian dollar, the Eastern Market Indicator for wool rose another 30 cents last week to 876c/kg clean, its sixth successive weekly rise.
Dairy is also climbing, with skim milk powder reaching a high of US$2520, up from US$2380 three weeks ago.
But wheat has dropped $100 a tonne since the start of the year.
Dairy prices have been rising over the past few months off the back of renewed confidence in global economic recovery and recent whole milk powder price hikes on the globalDairyTrade online auction system.
Last week's indicative Oceania export price ranges of $US2200-2480 a tonne for butter, $US2280-2520 for skim milk powder and $US2700-3100 for cheddar are creeping higher.
Three weeks ago butter was ranging from $US2120-2300 a tonne, SMP was $US2130-2380 and cheddar was selling for $US2660-2930.
Dairy Australia trade analyst Norman Repacholi said the gradual price recovery reflected a number of signals including the recent International Monetary Fund growth forecast increases, a sign of improving economic conditions, which has helped demand as well as the price of whole milk powder.
But a rising Australian dollar and good harvests in the major grain-producing parts of the world have put downward pressure on grain prices.
Co-operative Bulk Handling wheat trading manager Chris Brown said a substantial US corn crop would also weigh heavily on the feed sector and wheat prices.
"The winter wheat is off and the spring wheat is 80 to 90 per cent harvested," Mr Brown said. "The yields are exceeding what was projected."
Last week's rise in the Eastern Market Indicator for wool put it at a 14-month high of US770c/kg.
But Techwool Trading manager Rod Franklyn said the market was being driven by concerns over dwindling supplies and that the rising Australian dollar was having only a small impact.
The seriousness of the supply situation was emphasised in the latest Australian Wool Testing Authority wool test data.
In the September quarter AWTA tested only 490,420 bales, or 9.5 per cent down on the same period last year.
The slump was most dramatic in Western Australia with a 20.4 per cent fall. Victoria was down 6.2 per cent while NSW, the nation's largest wool state, was down 5.8 per cent.
But while wool prices were heading in the right direction, superfine wool prices continued to struggle in the absence of significant orders from Italy's specialist processors.
