Merino sheep in Tasmania

The wool market reversed the eight consecutive days falling trend to post a strong result which remained in play for the duration of sales, in fact, the strongest support was noted at the end of the week. The positive sentiment pushed across all segments, with AWEX reporting crossbreds recorded a positive trend, skirtings following the fleece sections lead, and cardings reported as “in sellers favour”.

The Eastern Market Indicator (EMI) rallied, lifting 24ȼ to 1256ȼ/kg, however, a weaker Aussie dollar (-1.30ȼ), caused the EMI when expressed in US$ to remain steady at 834ȼ/kg (US).

Again reports from the market noted that the strongest rises were directed toward a limited offering of selective, specialty non-mulesed wool as well as best styled wool with preferred length & strength measurements. This is now a common theme, making suitable types keenly sought, however, lots with fault or poorly prepared are finding buyers harder to attract.

The Western market indicator also performed strongly mirroring the east coast sales, up 29ȼ to finish the week at 1408ȼ/kg.

In the Crossbreds section, 26 MPG rose sharply gaining 39ȼ, while the 28 & 30 MPG categories were again quoted as largely unchanged.

Cardings were generally steady, plus 4ȼ in Sydney, steady in Melbourne and up 7ȼ in Fremantle.

A similar volume to last week of 30,451 bales eventually found their way to the market, after 6.4% of the original rostered offering was withdrawn prior to sale. The pass-in rate fell on the back of a stronger market to 8.5% passed-in, resulting 30,451 bales clearing to the trade.

This week on Mecardo, Andrew Woods looked at exchange rates, specifically the US/Au$ cross rates, and how they impact the wool market. Often movements in the exchange rate can be seen to affect local Australian dollar wool prices, as during the past couple of weeks. However, it is a mistake to assume the relationship between wool prices and the exchange rate is a fixed, negative correlation. The relationship swings from strongly negative to strong positive and in-between where there appears to be none.

The week ahead….

Next week sales have rostered a similar offering of 38,295 bales for sale across the three selling centres, all selling on Tuesday & Wednesday.

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Data sources: AWEX, Mecardo

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