The wool market rebounded in US dollar terms this week, coming off a two-week lull where it sat at the lower end of the recent trading range. A year ago, the AUD hovered at similar levels to where it is now, yet wool prices are roughly 10% lower.
The Eastern Market Indicator (EMI) picked up just 1¢ on the week, settling at 1,135¢/kg. The Western Market Indicator also lifted 2¢ to 1,275¢/kg. A rise in the AUD didn’t turn away buyers this week. With the AUD ending the week 0.7US¢ stronger, the EMI in USD terms landed up 9¢ at 754¢/kg.
In Sydney the Merino market strengthened this week, with high clearance rates as 16.5 to 20MPG’s gained between 13 and 27¢ on last week. Crossbred prices were stagnant at last week’s levels. Sale results were more mixed in Melbourne and Fremantle, but generally most Merino MPG’s ended the week slightly higher. 17.5MPG in Melbourne declined 9¢ over the week, falling closer in line with prices in Sydney. This was the largest week on week loss for the Merino fibre segment, but Merino cardings in Melbourne lost 16¢ on the week.
A smaller offering helped to keep competition alive despite the stronger dollar. 35,436 bales were offered to the trade this week, down from 38,476 the week prior. With a pass in rate of 6.3% nationally, 33,189 bales were sold. This was a decline of 5% week on week.
It is somewhat comforting to know that wool is not in this price cycle alone. Another luxury good, fine wine has also experienced weaker demand and prices since 2023. As shown in this week’s analysis by Andrew Woods (read here), the price of Merino wool and a fine wine index correlate fairly well, presumably responding to similar macroeconomic signals.
The week ahead….
Next week 39,319 bales are currently rostered for sale, with a one-day sale in the West on Tuesday as just 6,233 bales are on offer.
A reader has asked whether synthetic fibre prices have settled down, implying there is an equilibrium price level for these fibres. That implication is not
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Lean supply fuels competition despite a rising dollar
The Eastern Market Indicator (EMI) picked up just 1¢ on the week, settling at 1,135¢/kg. The Western Market Indicator also lifted 2¢ to 1,275¢/kg. A rise in the AUD didn’t turn away buyers this week. With the AUD ending the week 0.7US¢ stronger, the EMI in USD terms landed up 9¢ at 754¢/kg.
In Sydney the Merino market strengthened this week, with high clearance rates as 16.5 to 20MPG’s gained between 13 and 27¢ on last week. Crossbred prices were stagnant at last week’s levels. Sale results were more mixed in Melbourne and Fremantle, but generally most Merino MPG’s ended the week slightly higher. 17.5MPG in Melbourne declined 9¢ over the week, falling closer in line with prices in Sydney. This was the largest week on week loss for the Merino fibre segment, but Merino cardings in Melbourne lost 16¢ on the week.
A smaller offering helped to keep competition alive despite the stronger dollar. 35,436 bales were offered to the trade this week, down from 38,476 the week prior. With a pass in rate of 6.3% nationally, 33,189 bales were sold. This was a decline of 5% week on week.
It is somewhat comforting to know that wool is not in this price cycle alone. Another luxury good, fine wine has also experienced weaker demand and prices since 2023. As shown in this week’s analysis by Andrew Woods (read here), the price of Merino wool and a fine wine index correlate fairly well, presumably responding to similar macroeconomic signals.
The week ahead….
Next week 39,319 bales are currently rostered for sale, with a one-day sale in the West on Tuesday as just 6,233 bales are on offer.
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Data sources: AWEX, ICS, Nutrien Ag Solutions, Mecardo
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Fibre prices
A reader has asked whether synthetic fibre prices have settled down, implying there is an equilibrium price level for these fibres. That implication is not
Price stable as offering declines
A lower bale offering helped the Australian wool market set a very modest overall price rise, with the Eastern Market Indicator (EMI) up by 1¢
Merino supply and price
Supply is the topic of the moment in discussions about the greasy wool market, or more accurately low supply and its impact on price. Supply
Sellers unwilling to part with wool at current market
This week prices fell in the Australian wool market and pass in rates remain high as volumes have been slowly creeping back up to 30,000
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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.
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.
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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.