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.
This week’s market continued to show stronger prices despite the increased bales on offer as sellers responded to the rising market. The Eastern Market Indicator
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
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.
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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.
Dollar clips the wool market
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.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: Nutrien Ag Solutions, AWEX, Mecardo
Categories
Have any questions or comments?
The market continues positive start to 2025
This week’s market continued to show stronger prices despite the increased bales on offer as sellers responded to the rising market. The Eastern Market Indicator
AWTA volumes – east looks normal and the west continues to downsize
It is not hard to find doom and gloom commentary about the wool industry, which is fairly typical of the wool and sheep industries swinging
Slump in supply supports pricing
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
New Zealand flock size and sheep and lamb offtake
Australia and New Zealand have been the big sheep meat exporters of the second half of the 20th century, with New Zealand punching above its
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
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.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.