A cautious opening eventually became a solid upward trend in the wool market this week. AWEX reported the strong close in the West on the first day provided the momentum for a solid final day in the East, culminating in a stronger market across the board.
The Eastern Market Indicator (EMI) was 14ȼ better, or plus
1.21% to sit at 1172 ȼ/kg. The lift in
the EMI looked like a surge when compared to the previous 2-week period where
incremental daily increases saw a total of just 17ȼ lift. The EMI expressed in US dollars also
improved, gaining 8ȼ to 763 USȼ.
It was the Merino section that led the market, with gains of
22ȼ to 34ȼ reported, most notably were the 17.0 to 20.0 MPG categories, where
in Melbourne the increases were generally positive by around 2.0%.
Crossbreds were at best “solid”, with minimal price movements,
while the Cardings Indicators improved 7ȼ & 9ȼ in Sydney & Melbourne,
with a 1ȼ gain in Fremantle.
The Pass-in rate fell to 4.4%, the lowest % AWEX has reported
since June 2021, and with a smaller offering just 35,644 bales were cleared.
This week on Mecardo, Andrew Woods provides an update (read
here) on strength premiums and discounts. These are subject to the supply
of low tensile strength wool, and the supply of point of break in the middle of
the staple. Consequently, there will be seasons when the price effect of staple
strength is quite high, compared to the current season where the effect is
minimal. The five- and ten-year medians allow us to look through these seasonal
effects to see what the longer-term impact on price is.
The week ahead….
Next week Melbourne sells on Wednesday & Thursday, while Sydney and Fremantle sales are listed for Tuesday & Wednesday. An increased offering is rostered, with 42,394 bales listed nationally, 22,824 of these bales are in Melbourne sales.
Click on graph to expand
Click on graph to expand
Data sources: AWEX, Mecardo
