Wool clip on table

There was a cautious opening to this week’s market, and while some types gained support as the week unfolded, it was a mixed bag. Finer MPGs (17 & 17.5 MPG) ended the week higher (up 3 & 4ȼ respectively), with broader MPGs lower. Price falls in the Merino fleece sector produced this week's 4ȼ reduction in the EMI to 1,144 ȼ /kg clean. However, currency movements did play a role as the EMI in USD rose 2ȼ.

Brokers reported some exceptional sales in Melbourne for Tasmanian-based lots with RWS accreditation being keenly sought out for specialist orders.

AWEX reported large falls across the merino MPGs in Fremantle, with the Western Regional Indicator dropping 27 cents to 1,272 ȼ /kg clean with the Western Merino Carding Indicator bucking the trend and lifting 17 cents to 739 ȼ /kg clean.

Crossbred types were largely steady, however poorly prepared crossbred lots were ignored, the finer (26 – 30 MPG) lots slipped 2 to 5ȼ as the 32 MPG gained 3 ȼ.

The national offering increased this week with 40,520 bales from Australia topped up with 1,767 bales of NZ origin. The national pass-in rate increased to 9.7%, particularly noticeable in WA where 17.4% failed to meet sellers’ expectations.

Meat & Livestock Australia (MLA) reported that “The Australian wool market, measured by the Eastern Market Indicator (EMI), is outperforming all sheep and lamb indicators this year. The EMI has fallen 12% over the last 12 months; in comparison, the heavy lamb (the best-performing ovine indicator) has fallen 38%.” MLA went on to say that they expect this will result in a reversal of the flock demographics and expect the number of merino ewes to start increasing.

This week on Mecardo, Andrew Woods investigates how recent falls in livestock markets stack up against other historical price falls in a peak-to-trough analysis. With average micron merino prices down 40% on 2018 levels, this fall in the market is appreciably less than the mid-1970s and early 1991 (post reserve price scheme).
 

Next week

Next week’s sales will occur over three days due to public holidays, with 40,458 bales currently rostered for sale and a designated Superfine sale in Sydney.

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Data sources: AWEX,AWI,Mecardo

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