The Sydney pass in rate for the week averaged 2.1% in an indication that buyer demand is strong at this level of supply and sellers are happy to part ways at the current market pricing.
With the southern market enjoying the public holiday break,demand was strong in Sydney on Monday, with the broader categories achieving 20ȼ
plus gains for the day. Tuesday saw a
softer market, chipping away at the gains from the previous days. Even still,
Sydney ended the week in a stronger market than it began the week; 18.5mpg
improved 13 ȼ to 1509 ȼ/kg and 20mpg rose 6 ȼ to 1365ȼ.
The Melbourne market did not improve this week which has
contributed to the overall decline in the Eastern Market Indicator, which lost
5ȼ to 1167ȼ/kg. Similarly, the Western
Market Indicator finished 10ȼ lower to 1298ȼ/kg.
Per AWEX market commentary “Over the seventy selling days
that have since transpired [from the start of the selling season}, the EMI has
risen on twenty-nine occasions, fallen on thirty-five and been unchanged on the
other six”. We know that at specific micron levels that the premiums of finer wool have declined but overall market
sentiment is the very definition of drifting along. Considering the increase in
weekly sales volumes (on average) the resilience of the wool market at this moment is very reassuring. Particularly when we consider the wider market wool
operates in.
As investigated by Andrew Woods this week on Mecardo (read here), Apparel fibres (including wool) continue to work their way through a
cyclical downturn. The very nature of a cycle means that downturns are
eventually superseded by cyclical upturns, when that happens apparel prices
including wool will get a lift in demand and hence prices.
Next week
The wool market will have more volume to work through next week, with the offering to reach 45K bales per AWEX estimates, this is typical of this time of year (See Figure 2).
In the absence of a demand driver in the global economy attention will shift to supply. After a few weeks of declining auction volumes, total supply to auction for the season is now tracking behind last seasons year to date total which helps. However, the level of supply at the micron level will be critical, fine wool supply has been elevated (relative to last season) and pricing has reflected that.
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In mid-2022 Mecardo looked at the international supply of sheep meat (albeit from a limited number of countries) showing how lower supply had positively correlated
Sydney and Fremantle markets made up for lost time with big improvements across both the broad and merino fleece categories this week. The lower Aussie
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In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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Cheaper Tuesday halts market gains
Next week
The wool market will have more volume to work through next week, with the offering to reach 45K bales per AWEX estimates, this is typical of this time of year (See Figure 2).
In the absence of a demand driver in the global economy attention will shift to supply. After a few weeks of declining auction volumes, total supply to auction for the season is now tracking behind last seasons year to date total which helps. However, the level of supply at the micron level will be critical, fine wool supply has been elevated (relative to last season) and pricing has reflected that. /span>
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Data sources: AWEX, AWI, Mecardo
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Sydney and Fremantle markets made up for lost time with big improvements across both the broad and merino fleece categories this week. The lower Aussie
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.