Last week's sales saw the market confirm the predictions of both Westcoast Wools managing director Luke Grant and Wool Agency's wool manager Andrew Johnson in last week's Farm Weekly.

The Western Market Indicator (WMI) opened up at 43 cents a kilogram higher, from 1197c/kg at the close of sale 24 last year.

Unfortunately this was followed by a loss of 24c on Thursday, although the WMI still ended the week 19c higher at 1216c/kg.

Sales were certainly helped by the US exchange rate appreciating steadily during the break, as it managed to avoid the extreme fluctuations that occurred in the weeks leading up to the market hiatus over Christmas.

Primaries wool representative Greg Tilbrook said coming off a break and with the uncertainty in Europe the sale results were good.

"The slight drop on the second day wasn't necessarily to be expected, but for the week we still finished in a very positive position particularly the finer microns," Mr Tilbrook said.

"This was certainly good to see because they had been lagging in the past."

Mr Tilbrook didn't agree that the results were partly due to the US exchange rate performance and thought it was more reflective of the supply issue because fleece weights were down in general.

"By the time we hit late February and March it will be interesting to see where we are at," he said.

"The offerings do look like they seem to be dropping after the Australia Day week so that may help to keep prices at current levels."

Elders wool sales manager Danny Burkett agreed and said the strong start had added to the increase in prices seen in the last sale prior to Christmas.

"The market increased in the east which continued through Wednesday across all centres and all microns," he said.

"While Merino fleeces did give back some of the gains on last Thursday's market, overall it was a positive start to the season considering there were nearly 50,000 bales up for grabs.

"On the open of the second sale for 2012 on Tuesday, the market in Melbourne was being quoted cheaper by 25 cents clean.

"This is not as bad as it reads because it was a 60,000 bale offering.

"If the closing quotes are similar to this it bodes well for the coming month.

"To put it in dollar terms there is just shy of $80 million worth of wool on the market.

"If the largest buyer for the week takes 10 per cent of the volume then they will have just shy of $8m out in the market place, in that short period of time.

"This is certainly nothing to sneeze at when the cost of credit is high and international financial woes fill the headlines."