This week saw auction day wool results see-saw but eventually arrived at a stop fairly balanced after the exchange rate again influenced buyer behaviour throughout the week.
The Eastern Market
Indicator (EMI) has been reasonably steady in the last fortnight thanks to
easing week-to-week supply at auction.
A 1¢ decline in the EMI to 1098¢/kg but a 12¢ gain in the EMI expressed
in US$ tells us that the balance between demand and supply is very sensitive at
the moment.
This season’s
offerings have been behind schedule; with 23% less wool making it to auction so
far this season than at the same time last year. This level of scarcity would
typically be enough to push indicators higher for much longer, but current
demand isn’t strong enough to capitalise on the lower volumes. This week saw 27,556 bales sold with a pass
in rate nationally of 6%.
Sydney saw
improvement in the 18-19 micron range with 18.5 micron increasing 12¢ to 1414¢/kg.
Melbourne auctions
were, for the most part, softer this week, with declines steepest at the finer
end of the spectrum. 16.5 MPG declined 21¢ to 1702¢/kg and 21MPG dropped 7¢ to
1243¢/kg. The western market indicator
WMI improved 3¢ after all indicators in Fremantle improved week on week. 18MPG rose 11¢ to 1438¢/kg and 19MPG improved
10¢ to 1352¢/kg.
Crossbred types
fared better, with 26MPG in Sydney finishing the week 10¢ higher to 562¢/kg and
32MPG increased 11¢ to 278¢/kg in Melbourne.
This week on
Mecardo, Andrew Woods investigated our main competitor for merino wool exports,
South Africa (read more here). The South African merino clip has
managed to differentiate itself from the Australian clip in recent seasons by
not being from mulesed sheep and having half of the clip accredited to RWS.
Typically auction prices between Australia and South Africa are similar but in
recent seasons, the South African average prices have moved to a consistent
premium to the equivalent Australian price.
Next week
Next week’s offering is expected to be 17% higher week on week to 34K bales.
Low wool prices, along with dry seasonal conditions, lead to poor sentiment. Given the current low wool prices (and apparel fibre prices generally) the question
The wool market responded to a slightly higher Au$ with a weaker auction market. The market is now meandering without any strong demand, despite volumes
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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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.
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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Easing supply steadies but doesn’t stimulate market
The Eastern Market Indicator (EMI) has been reasonably steady in the last fortnight thanks to easing week-to-week supply at auction. A 1¢ decline in the EMI to 1098¢/kg but a 12¢ gain in the EMI expressed in US$ tells us that the balance between demand and supply is very sensitive at the moment.
This season’s offerings have been behind schedule; with 23% less wool making it to auction so far this season than at the same time last year. This level of scarcity would typically be enough to push indicators higher for much longer, but current demand isn’t strong enough to capitalise on the lower volumes. This week saw 27,556 bales sold with a pass in rate nationally of 6%.
Sydney saw improvement in the 18-19 micron range with 18.5 micron increasing 12¢ to 1414¢/kg.
Melbourne auctions were, for the most part, softer this week, with declines steepest at the finer end of the spectrum. 16.5 MPG declined 21¢ to 1702¢/kg and 21MPG dropped 7¢ to 1243¢/kg. The western market indicator WMI improved 3¢ after all indicators in Fremantle improved week on week. 18MPG rose 11¢ to 1438¢/kg and 19MPG improved 10¢ to 1352¢/kg.
Crossbred types fared better, with 26MPG in Sydney finishing the week 10¢ higher to 562¢/kg and 32MPG increased 11¢ to 278¢/kg in Melbourne.
This week on Mecardo, Andrew Woods investigated our main competitor for merino wool exports, South Africa (read more here). The South African merino clip has managed to differentiate itself from the Australian clip in recent seasons by not being from mulesed sheep and having half of the clip accredited to RWS. Typically auction prices between Australia and South Africa are similar but in recent seasons, the South African average prices have moved to a consistent premium to the equivalent Australian price.
Next week
Next week’s offering is expected to be 17% higher week on week to 34K bales.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Data sources: AWEX, AWI, ICS, Mecardo
Categories
Have any questions or comments?
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The wool market responded to a slightly higher Au$ with a weaker auction market. The market is now meandering without any strong demand, despite volumes
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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.
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.