The wool market this week improved across the board, although 17.5 MPG and finer in Sydney posted minor losses. AWI report that the supply of wool to auction is being “managed” extremely well to match the current demand.
Bidding from local export
traders dominated the wool sale, resulting in a decrease in the pass-in rate to
4.8%. The Eastern Market Indicator lifted
7¢ to 1169¢/kg. This was the first rise for four weeks and was also noted in
the Fremantle market, where the WMI rose 17¢ to 1271¢/kg.
After experiencing
some volatility post-US election, the Au$ ended the week stronger. This
resulted in the US$ EMI level posting a 13¢ gain to close at US$ 749¢/kg.
AWI reported that
the first-stage topmakers were out-bid by local exporter traders. This may
become significant as with only six weeks until the three-week Christmas break,
topmakers will need to secure enough stocks to maintain mills. With the supply
of wool somewhat constrained compared to last year, this could induce a period
of activity by the topmakers causing a lift in the market.
Crossbred wool in
Northern and Southern markets saw modest price gains, with 28MPG increasing 7¢
to 402¢ at the Auction in Melbourne.
The best performer
in the cardings market was Fremantle, posting a 20¢ lift, with Melbourne also
positive rising 7¢, however, Sydney was down 4¢.
With a clearance
rate of 95.2%, 33,695 bales were sold, 1,492 fewer than last week but 2,335
more than the weekly average for this season.
In the previous
week, Andrew Woods asked the question “Is wool consumption or wool production
driving changes in supply?” (read more here). Wool consumption as a proportion of
total fibre consumption has been falling, as a growing population seeks
expanded sources of fibre. However, ‘Wools ain’t wools’ – not all categories of
wool have shrunk in recent decades, with 19 micron and finer categories
increasing in volume. The potential for wool consumption does not seem to be a
limiting factor given the staple fibre market in total is around 60 million
tons per year and total wool production (everything included) is around one
million tons. The limit on consumption is the volume grown.
Next week
Next week’s national offering is expected to sit at 36,573 bales, with all centres selling on Tuesday & Wednesday.
The increased offering of wool bales stirred a range of outcomes this week, particularly affecting the finer micron wool segments. On balance, the Eastern Market
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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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Managed supply lifts wool market
Bidding from local export traders dominated the wool sale, resulting in a decrease in the pass-in rate to 4.8%. The Eastern Market Indicator lifted 7¢ to 1169¢/kg. This was the first rise for four weeks and was also noted in the Fremantle market, where the WMI rose 17¢ to 1271¢/kg.
After experiencing some volatility post-US election, the Au$ ended the week stronger. This resulted in the US$ EMI level posting a 13¢ gain to close at US$ 749¢/kg.
AWI reported that the first-stage topmakers were out-bid by local exporter traders. This may become significant as with only six weeks until the three-week Christmas break, topmakers will need to secure enough stocks to maintain mills. With the supply of wool somewhat constrained compared to last year, this could induce a period of activity by the topmakers causing a lift in the market.
Crossbred wool in Northern and Southern markets saw modest price gains, with 28MPG increasing 7¢ to 402¢ at the Auction in Melbourne.
The best performer in the cardings market was Fremantle, posting a 20¢ lift, with Melbourne also positive rising 7¢, however, Sydney was down 4¢.
With a clearance rate of 95.2%, 33,695 bales were sold, 1,492 fewer than last week but 2,335 more than the weekly average for this season.
In the previous week, Andrew Woods asked the question “Is wool consumption or wool production driving changes in supply?” (read more here). Wool consumption as a proportion of total fibre consumption has been falling, as a growing population seeks expanded sources of fibre. However, ‘Wools ain’t wools’ – not all categories of wool have shrunk in recent decades, with 19 micron and finer categories increasing in volume. The potential for wool consumption does not seem to be a limiting factor given the staple fibre market in total is around 60 million tons per year and total wool production (everything included) is around one million tons. The limit on consumption is the volume grown.
Next week
Next week’s national offering is expected to sit at 36,573 bales, with all centres selling on Tuesday & Wednesday.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: Nutrien Ag Solutions, AWEX, ICS, AWI, Mecardo
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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.
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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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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.