THE combination of steady wool prices and lower grain prices has encouraged demand for Merino sheep from the Riverina.
The biggest crowd in several years turned out for last week's sale of about 28,700 mostly Merino ewes at Deniliquin last week.
While first-cross prices eased, Merino prices remained strong.
Elders Deniliquin auctioneer Jason Andrews attributed the result to a consistent wool market during the past six to eight months.
Mr Andrews said most buyers at the sale, while not necessarily wool growers, had been in the sheep industry for some time.
"A lot of people probably would have traded out of older sheep at premium rates pre-Christmas or have sold a pretty good wool clip and are trading into a few more sheep," he said.
"Also, there might be a few croppers that are starting to not want to have all their eggs in one basket.
"Prices (for last year's grain crops) were below expectation but their inputs have stayed the same."
Mr Andrews said he expected the wool market would continue to rise and fall this year in line with recent movements.
"I think it will peak and trough like a normal market, probably on similar levels to what we are at the moment," he said.
"If we get a big spike in the dollar somewhere, which I don't think we will, it could come off the pace a bit."
Mr Andrews said Merino ewes sold at last week's sale "went all over the place", with a significant proportion were bought by eastern graziers.
About 35,00 sheep - including 25,000 Merino wethers - will be sold at Deniliquin on tomorrow.