Auction volumes to begin the calendar year have been elevated but market activity on both sides looks to be easing as we approach a period of seasonal supply and demand growth.

Just 8,431 bales were offered in the Northern market this week which contributed to the relatively low 7% pass-in rate.  Bidding held firmer at the broader end of the offering with 17MPG losing 61ȼ to 1807ȼ/kg and 18MPG improving 16ȼ to 1632ȼ/kg.  Fine wool buyers might have their eye toward the designated superfine sale next week.

In Melbourne, Merino fleece demand was mixed with desirable wool holding firm but the pass-in rate for Merino fleece averaged 14.4% for the week, as reports cite less than ideal measurements amongst the offering. 18MPG lost 30ȼ to 1,608ȼ/kg and 21MPG eased 5ȼ to 1317 ȼ/kg.

Out West, the Western Market Indicator (WMI) sits at 1301 ȼ/kg, a 5ȼ reduction week on week. Finer micron category supply dominated the offering, resulting in the decline of Merino fleece categories but a minor appreciation in price at the broader end. 18MPG lost 28ȼ to 1,569ȼ/kg and 21MPG improved 3ȼ to 1326ȼ/kg. 

Auction offering volumes have been declining the last few weeks, and the market has depreciated since the beginning of the calendar year.  Whilst it would appear the foot is off the gas for wool markets for now, the data indicates that wool is still in a great spot.  The 2023/24 seasons offering is 5.9% higher than the same time last season.  Despite supply being ahead of schedule, buyers have not been shy to come to the party, as the pass-in rate is averaging just 8.3% for the season (12.3% in 2022/2023).  The average weekly bales sold are sitting at 39K bales, almost 2,000 higher than last season’s weekly average. 

Next week

Volumes are already ramping up next week ahead of a seasonal period of elevated supply (Figure 2.) as 44K bales are scheduled for auction next week.

Sydney has a designated superfine sale next week.

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Data sources: AWEX, AWI, Mecardo

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