Good news this week coming from the wool market as the sharp declines of the opening two weeks after the winter recess were halted.
The smaller selection attracted buyer support from the outset although sellers were still unwilling to fully embrace the market resulting in a large pre-sale withdrawal, a high pass-in rate and a smaller than normal clearance.
Across the week, the Eastern Market Indicator (EMI) lifted 15ȼ to settle at 1,350ȼ, a 1.1% increase. The Australian dollar was again slightly weaker at US$0.724, which resulted in the EMI, in US dollar terms, lifting 8ȼ or 0.8% to 978ȼ.
There were no sales in Fremantle so the Western Market Indicator (WMI) remained at 1351ȼ.
Again, the offering was reduced and after 9.5% of the roster were withdrawn only 28,243 bales were offered. With a further 14.7% of the offering passed in, over the two-day sale in Melbourne & Sydney 24,100 bales were sold. This was in line with the 24,618 sold last week.
The price increases were felt across all merino MPG’s, however, it was the fine end that showed the greatest improvement. 17 MPG in Melbourne was up by 89 cents, while the 21 MPG showed a more subdued lift of 20 cents.
The crossbred indicators were largely unchanged to “in sellers’ favour”, with AWEX reporting that 26 to 30 MPG traded within 7 cents of last week’s levels.
Cardings fell 1ȼ in Melbourne, and 7ȼ in Sydney across the week.
This week on Mecardo, Andrew Woods takes a shot at explaining the 30 MPG price and where it may head in the future (view article here). A good explanation of the strong performance of crossbred wool prices in the 2011-2019 period would help assess where the market is likely to go from current levels. Based on the price ratio to non-wool staple fibres and the US dollar price there does not look to be any downside for the 30 micron, with the question then becoming how long until some upside?
The week ahead….
Next week an offering of 40,554 bales are rostered, with Fremantle joining Melbourne & Sydney selling on Tuesday & Wednesday only.
While it is not expected that this offering will all make it to sale, the lift in supply will test this market.
In mid-2022 Mecardo looked at the international supply of sheep meat (albeit from a limited number of countries) showing how lower supply had positively correlated
Sydney and Fremantle markets made up for lost time with big improvements across both the broad and merino fleece categories this week. The lower Aussie
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Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.
Wool market halts price slide
Across the week, the Eastern Market Indicator (EMI) lifted 15ȼ to settle at 1,350ȼ, a 1.1% increase. The Australian dollar was again slightly weaker at US$0.724, which resulted in the EMI, in US dollar terms, lifting 8ȼ or 0.8% to 978ȼ.
There were no sales in Fremantle so the Western Market Indicator (WMI) remained at 1351ȼ.
Again, the offering was reduced and after 9.5% of the roster were withdrawn only 28,243 bales were offered. With a further 14.7% of the offering passed in, over the two-day sale in Melbourne & Sydney 24,100 bales were sold. This was in line with the 24,618 sold last week.
The price increases were felt across all merino MPG’s, however, it was the fine end that showed the greatest improvement. 17 MPG in Melbourne was up by 89 cents, while the 21 MPG showed a more subdued lift of 20 cents.
The crossbred indicators were largely unchanged to “in sellers’ favour”, with AWEX reporting that 26 to 30 MPG traded within 7 cents of last week’s levels.
Cardings fell 1ȼ in Melbourne, and 7ȼ in Sydney across the week.
This week on Mecardo, Andrew Woods takes a shot at explaining the 30 MPG price and where it may head in the future (view article here). A good explanation of the strong performance of crossbred wool prices in the 2011-2019 period would help assess where the market is likely to go from current levels. Based on the price ratio to non-wool staple fibres and the US dollar price there does not look to be any downside for the 30 micron, with the question then becoming how long until some upside?
The week ahead….
Next week an offering of 40,554 bales are rostered, with Fremantle joining Melbourne & Sydney selling on Tuesday & Wednesday only.
While it is not expected that this offering will all make it to sale, the lift in supply will test this market.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: AWEX, AWI, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.