Big fall after recess

The bale offering grew by 18% compared to the last sale week prior to recess to 37,702 and the pass in rate remained high at 16.3%.

This is quite a steep level, but sellers had become more and more resistant to the easing market before the recess period. The pass in rate had been elevated above the 12-month average of 6.9% for 5 of the last 6 weeks prior to the season break. There were 31,541 bales sold this week.

All local market indicators took a dive this week with Sydney down by 56¢ to 1877¢, Melbourne declined by 65¢ to 1768¢ and Fremantle fell by 64¢ to 1998¢.

In Sydney, all fine and medium merino price guides declined significantly with 17 MPG declining by 88¢ to 2475¢, 18 MPG fell by 83¢ to 2410¢ and 20 MPG declined by 96¢ to 2025¢. Crossbred wool 28 MPG was 12¢ lower at 793¢, and cardings fell by 40¢ to 1160¢.

In Melbourne, prices were also down for merino wool with 17.5 MPG down by 63¢ to 2424¢, 18.5 MPG slipped by 63¢ to 2318¢ and 21 MPG dove by 109¢ to 1988¢ – the biggest fall for the week. Moving to crossbred wool, 26 MPG fell by 30¢, 28 MPG was stable at 790¢ and cardings was down by 82¢ to 1056¢.

In Fremantle, 18.5 MPG saw a 71¢ drop to 2291¢, 19.5 MPG fell by 79¢ to 2119¢ and 21 MPG was down by 107¢ to 1999¢. the price of cardings in the west was the only positive on the board this week, up by 6¢ to 1154¢.

This week in Mecardo, Andrew Woods explores the median seasonal price patterns for a variety of MPGs over the past 10 years as a guide for what prices could potentially do for the rest of the year.  Given the uncertainty about demand present in the supply chain, a median fall in price during the spring of 5% would be a “soft landing” for greasy wool prices (article available here).