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Unfortunately, the second week of the new selling season saw the momentum of the first carry-through. A rally in the AUD/USD on the back of soft US inflation data didn’t help, but sellers put their foot down, lifting the pass-in rate to 13.6% of the offering.

With discounts right across the board for Merino types, the Eastern Market Indicator (EMI) lost 18¢ or 2% over the week, ending at 1,107¢/kg. The exchange rate didn’t work in sellers’ favour, further stifling the enthusiasm of buyers. The AUD lifted to an average of 0.677 USD on sale days, the highest point since January. Consumer Price Index data for June has prompted expectations for the Federal Reserve (Fed) to start reducing interest rates in the US from the September meeting which drove the USD down. In USD terms, the EMI finished the week at 747¢ which is back at the levels of early May.

 

Well-measured lots with reasonable yields continue to attract competition but this is counterbalanced by discounts for poorer quality lots. The market came under the most pressure in Melbourne, with 18.5MPG wool losing 50¢ on the week to 1394¢. 17 to 18MPG also fell heavily, down around 35-40¢ by the close of the sale. In Sydney however, it was the 18 and 18.5MPG’s that held reasonably well, only down 5 to 10¢ on the week.

 

The weaker market also spread to Fremantle with the Western Market Indicator down 15¢ on the week to 1247¢. The WMI is currently 7% lower year-on-year in AUD terms.

Crossbred wool results were mixed this week. In Sydney, losses in Tuesday’s sale were recovered on Wednesday, leaving the 28MPG unchanged at 380. In Melbourne, clip preparation and stylish lots were rewarded and this was reflected in the 26MPG gaining 3¢ over the week. 28 to 32MPG each declined slightly.

It certainly wasn’t overwhelming supply to blame for the poor results in auctions this week. 31,147 bales were offered to the trade and with 13.6% passed in, just 29,753 bales sold. This was 13% fewer bales than last week and a 26% decline year-on-year.

Next week

No sales in Fremantle next week mean another lighter offering is on the forecast. 30,518 bales are expected to come forth between Sydney and Melbourne. At what point tighter wool supply steps in to turn a corner in the market is the question on everyone’s mind. Whether the AUD/USD remains at its new level or not will no doubt impact.

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Data sources: Nutrien Ag Solutions, AWEX, Mecardo

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Wool

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The Australian wool market has continued its relatively positive start to 2025, with the Eastern Market Indicator (EMI) rising again this week. Sellers benefitted from

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