Nutrien Ag Solutions wool shearers.

The wool market has held steady for the most part this calendar year, especially when compared with other agricultural commodities. However, a difficult return from the long weekend In the east has the wool market coughing and spluttering to the season’s finish line.

The Eastern Market Indicator (EMI) this week has dropped 34ȼ to 1174ȼ/kg. This 2.8% reduction week on week now brings the EMI to a level that is 20% lower than this time last year. This decline is consistent in US dollar terms, as the EMI expressed in US$ sits 22% lower year on year at US 799 USȼ.

The long weekend turned into a long week for Merino fleece on the east coast with both centres encountering a challenging market.  Buyer sentiment was not strong to begin with and a daunting supply of higher VM (Vegetable matter) wool, particularly in the finer micron categories, impacted pricing.

In Sydney, 17.5MPG dropped 149 ȼ to 1748 ȼ/kg its lowest point since December 2020.  Broader categories in the northern market did not experience as steep a drop, with 20MPG dropping 37ȼ to 1356 ȼ/kg.   Down south, market sentiment towards finer merino fleece was similar but falls not as steep with Melbourne 17MPG lowering by 80ȼ to 1960ȼ/kg, the first time it’s finished the week below 2000 ȼ/kg since January 2021.  The Melbourne 20MPG dropped 19ȼ to 1382ȼ/kg.  

The west came back from a sales break and immediately found its back against the wall. The Western Market Indicator (WMI) dropped sharply by 52ȼ to sit at 1314 ȼ/kg, a 3.8% decline from the previous sale.  More specifically, 18.5 MPG was down 85ȼ to 1544ȼ/kg and 21MPG dropped 58ȼ to 1289 ȼ/kg.   The WMI is 16% lower than the same time last year as Fremantle now enters recess. 

Cardings in Sydney fell 10ȼ to 739ȼ; dropped 11ȼ to 724ȼ in Melbourne and rose 4ȼ to 703ȼ in Fremantle. A limited crossbred offering saw little change to fortunes. 28MPG in Sydney ended the week at 303 ȼ/kg (up 3ȼ) and 313 ȼ/kg in Melbourne (down 4ȼ).

Bales sold this week reached 30,544.  As market fortunes immediately turned on sellers to begin the week, they opted to not be caught in the drop with the national pass-in rate up significantly to 23.3%. Both sale days saw the Fremantle pass-in rate over 30% as sellers continue to be patient and stick to the value they’ve placed on their fleece. 

This week for Mecardo Andrew Woods takes a deeper dive into the impact of pasture growth rates on merino fibre diameters (read here). On the back of a few wet years, the odds are that this upcoming spring will be drier, suggesting that merino fibre diameters will shift finer in 2024.

Next week

Fremantle enters recess next week after its tough return to sales this week.  For Sydney and Melbourne, the offering is shaping up to 33,463 bales.  

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Data sources: AWEX, AWI, Mecardo

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