Wool bales in a shed

While prices could be stronger, there is much to be said about the volumes that are flowing through the system. For April, in the 16.5 to 21.5 MPG range (where the bulk of merino wool sits), just 9,300 bales (or 9.3%) of the 100,000 bales offered were passed in. By contrast, in the 23 to 26 MPG, 21% was passed in (although on much lower volumes of wool offered), while in the stronger Cross Bred lots 11.3% was passed in out of the 13,642 bales offered.

The Eastern Market Indicator (EMI) lifted for the week closing at 1302 ȼ/kg, up 12 ȼ/kg on last week’s level.   Whilst the Australian dollar was marginally stronger (up to 0.661 USȼ), the impacts were minimal on the wool market, as the EMI saw a 4ȼ increase when expressed in $US, finishing the week at 860 USȼ/kg. 

The Western Market Indicator (WMI) rose strongly for the week, it closed the week at 1472ȼ/kg, an increase of 30ȼ on last week’s level. In the west, on the final selling day, 23% of the fleece lots were withdrawn before the sale, influencing the stronger demand for the remaining wool offered.

Crossbred markets were steady this week, with little change across the MPGs. The 28 MPG fleece in Melbourne was unchanged at 335 ȼ/kg, while the 30 MPG lifted just 2ȼ to 307 ȼ/kg.

Eastern market cardings were quoted slightly weaker 7ȼ and 10ȼ in Sydney (831¢) and Melbourne (834¢) respectively.  The west lost ground, down 20ȼ to finish the week at 819¢.

A smaller offering of 38,505 bales was offered this week. With a pass-in rate of 9.2% resulted in the weekly clearance of 34,967 bales: a decrease of 11,450 bales compared to last week.

This week on Mecardo Andrew Woods looks at the reason why the AWEX EMI should be used sparingly to monitor prices for specific micron categories. The message in this article is the same as it was in the February article. The Australian wool industry is blessed with good, reliable micron price guides (MPG) which are a better tool to monitor market levels than the EMI, which is only a general overarching indicator.

The week ahead….

Next week again more than 40,000 bales are scheduled for auction. All three centres will sell on Tuesday & Wednesday.

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Data sources: AWEX, Mecardo

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