Sheep being shorn for wool

While the opening 2023 sales results varied depending on quality, it was a general feeling of satisfaction that despite global uncertainty the wool market posted a solid opening this week. It was noticed that where there was better style (quality) wool, the market indicators pushed higher. This was notable in Sydney & Melbourne especially, where a greater offering of “better wools” was listed.

The Eastern Market Indicator (EMI) continued to improve, gaining 6ȼ to 1333ȼ/kg, and despite a stronger Aussie dollar (+0.63ȼ to US$0.69), the EMI when expressed in US$ also improved a further 13ȼ to settle at 921ȼ/kg (US). On the back of fewer “best style” wools, the Western market indicator eased giving up 19ȼ to finish the week at 1467ȼ/kg.

Crossbreds opened weaker before stabilising with the 28 MPG in Melbourne back 50ȼ to 595, while the 30 MPG retreated just 1ȼ for the week. Cardings were reported as steady, improving 2ȼ in Sydney, up 4ȼ in Melbourne and softer by 1ȼ in Fremantle.

To open 2023 sales, a three-day sale was scheduled, with Melbourne selling on its own on Thursday, and in a positive pointer for the new year, Thursday proved to be a solid end to a good week. A much larger volume of 50,509 was offered for sale, the third largest offering this season and the largest for 5 months. After 5.1% of the original rostered offering was withdrawn prior to sale, the pass-in rate was higher at 11.2% of this week’s offering.

As a result, 44,814 bales were sold, 6 bales less than last sale. Of note is that the first 4 weeks of the selling season and the last 2 weeks are the only sales where more than 40,000 bales have been cleared to the trade in the selling week. This is well up on the seasonal average of 34,000 bales per week.

This week on Mecardo, Andrew Woods takes a look at the AWEX eastern 21 MPG compared to a weighted (by volume) average price for non-wool staple fibres (cotton, which is the largest, acrylic, polyester and viscose). While the modelling is of hindsight, it shows the importance of volume on price levels relative to staple fibre prices generally for broader merino wool, and further, the influence of price levels in the general apparel fibre market. These factors set the base price level, upon which secondary factors apply their influence to greasy wool prices.

The week ahead….

Next week Melbourne again sells on Tuesday, Wednesday & Thursday, while Sydney and Fremantle will offer on Tuesday & Wednesday. Again a large offering is rostered with 51,203 bales currently listed.

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Data sources: AWEX, Mecardo

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