Merino sheep flock wool at Tolarno

As we welcome the markets and our readers back from the wool market recess, the Eastern Market Indicator (EMI) has missed the jump, ending the week at its lowest point for the calendar year. Despite the finer end of the market hitting the ground running, vegetable matter and length are impacting broader microns.

The EMI fell this week by 11ȼ to 1289 ȼ/kg, which is a low point for the calendar year.  Exchange rates are also playing a part as the Aussie dollar trades at 67.02 USȼ and the EMI expressed in USȼ is down 14ȼ to 864 US ȼ/KG.

The East Coast returned from the recess to large volumes and a market that was, for the most part, trending down as a result.  Superfine wool in Sydney bucked the trend however, as 16.5 MPG finished the week 34ȼ higher at 2372 ȼ/kg, and 17MPG rose 12ȼ to 2342 ȼ/kg.  Broader microns did not find the same favour with buyers, as lots were heavily scrutinised for their vegetable matter (VM) content and length.  18 MPG in Melbourne fell 41ȼ to 1836ȼ/kg and 18.5 MPG in Sydney dropped 52ȼ to 1702ȼ/kg, the biggest falls of the week.

The Western market hit the ground running post-recess as all MPG categories saw price increases this week.  At the finer end, 18 MPG grew 6ȼ to 1829 ȼ/kg and 19MPG and 19.5 MPG were both up 26ȼ, ending the week at 1634 ȼ/kg and 1575 ȼ/kg respectively.  All considered, the Western Market Indicator finished the week up modestly with a 3 ȼ increase to 1442 ȼ/kg.

Crossbred wool continues to bounce along the bottom as 32MPG fleece in Melbourne increased 3ȼ  to 250 ȼ/kg and 28MPG in Sydney lost 7ȼ to 323 ȼ/kg.  As referenced this week in the monthly Mecardo Percentile article, Southern market crossbred wool prices sit in the bottom 10% of prices seen since 2010.

Eastern market cardings continued a downward trend, down 6ȼ in Sydney (838) and 15 ȼ in Melbourne (844).  Western Cardings followed suit, down 9ȼ to 839ȼ /kg.

Following a recess week, auction volumes were always going to be towards the pointy end as the market cleared 46,417 of the 52,951 bales offered. With the pass-in rate this week of 12.3% matching the pass-in rate for the season thus far, it’s fair to say the market took the vast volumes in their stride.

This week in Mecardo, Andrew Woods takes us through a longer-term view of Fine Merino prices.  Micron premiums have historically been volatile, and there is no reason to suspect this will change. However, the premiums seen in the market in recent seasons suggest that demand is starting to catch up with the strong increase in supply seen in the two decades from the mid-1990s onwards.

The week ahead….

We expect a relatively more timid offering as we get back into the swing of things next week, with an offering of 44,901 bales scheduled.  Sales next week will occur on Wednesday and Thursday as the nation takes pause on Tuesday to pay its respects on Anzac Day.

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Data sources: AWEX, Mecardo

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