The Australian wool market extended its winning streak this week, with the Eastern Market Indicator climbing 16¢ to finish at 1,693¢/kg ahead of next week's Chinese New Year recess. With 37,301 bales offered and 35,417 sold, the passed-in rate this week was 5.1%.
The Northern indicator rose 20¢ to 1,737¢/kg clean. For the fine merino types, the 17.0 MPG jumped 40¢ to 2,298¢, while the 17.5 MPG added 39¢ to close at 2,267¢ and the 19.0 MPG lifted 30¢ to 2,091¢. Merino cardings in the north firmed 4¢ to 896¢/kg.
In Melbourne, the indicator added 12¢ to finish at 1,663¢/kg. The 17.0 MPG rose 18¢ to 2,276¢, while the 18.0 MPG gained 26¢ to 2,191¢ and the 19.0 MPG lifted 12¢ to 2,083¢. The 26 micron crossbred category rose 9¢ to 878¢, while the 28 micron fell 10¢ to 705¢. Merino cardings in the south jumped 45¢ to 914¢/kg.
The Western market also rose, climbing 16¢ to finish at 1,894¢/kg. The 17.0 MPG lifted 26¢ to 2,261¢, while the 18.5 and 19.0 micron categories strengthened by 30¢ and 23¢ to 2,139¢ and 2,075¢ respectively. AWEX reported that Oddments surged, with locks jumping 100 to 120¢ on day one. Merino cardings in the west rose 34¢ to 980¢/kg.
Currency movements continue to shape the market. In USD terms, the EMI rose 27¢ to 1,205¢/kg, its highest point since July 2019. AWEX noted that the EMI has risen on 19 of the 22 selling days since 4 November, gaining 276¢ or 19.5% in local currency and 272 US¢ or 29.7% in greenback terms. This meant that, Year-on-year, the EMI sits 501¢ or 42% higher, despite the Australian dollar trading 13.1% stronger than the same period last season.
This week in Mecardo, Andrew Woods examined the 20 to 22 micron price ratio to non-wool staple fibres (see article here). He found that falling supply has driven the price ratio close to 2018 highs around 9, with volume down 40% since then. He noted volume accounts for nearly two thirds of price ratio changes. Analysing deflated USD prices from the mid-1990s, he identified a slightly rising trend to 2010 before prices jumped to a higher level through to 2020. With current supply at extreme lows, the price ratio is likely to reach new levels above the 2018-2019 highs.
The week ahead….
Next week the market heads into recess for Chinese New Year, with sales resuming in the week beginning Monday 23 February.
An uptick in supply couldn’t halt Eastern Market Indicator (EMI) progress, as the EMI improved again this week. This week the United States Dollar (USD)
Crossbred wool prices have endured a torrid time since 2020. Unlike merino, crossbred prices did not bounce back strongly in 2021 following the initial impact
This week the wool bale offering was lower, with a Western Australian public holiday pausing auctions in Fremantle for the week. The offering of 23,413
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Market momentum persists ahead of Chinese New Year
The Northern indicator rose 20¢ to 1,737¢/kg clean. For the fine merino types, the 17.0 MPG jumped 40¢ to 2,298¢, while the 17.5 MPG added 39¢ to close at 2,267¢ and the 19.0 MPG lifted 30¢ to 2,091¢. Merino cardings in the north firmed 4¢ to 896¢/kg.
In Melbourne, the indicator added 12¢ to finish at 1,663¢/kg. The 17.0 MPG rose 18¢ to 2,276¢, while the 18.0 MPG gained 26¢ to 2,191¢ and the 19.0 MPG lifted 12¢ to 2,083¢. The 26 micron crossbred category rose 9¢ to 878¢, while the 28 micron fell 10¢ to 705¢. Merino cardings in the south jumped 45¢ to 914¢/kg.
The Western market also rose, climbing 16¢ to finish at 1,894¢/kg. The 17.0 MPG lifted 26¢ to 2,261¢, while the 18.5 and 19.0 micron categories strengthened by 30¢ and 23¢ to 2,139¢ and 2,075¢ respectively. AWEX reported that Oddments surged, with locks jumping 100 to 120¢ on day one. Merino cardings in the west rose 34¢ to 980¢/kg.
Currency movements continue to shape the market. In USD terms, the EMI rose 27¢ to 1,205¢/kg, its highest point since July 2019. AWEX noted that the EMI has risen on 19 of the 22 selling days since 4 November, gaining 276¢ or 19.5% in local currency and 272 US¢ or 29.7% in greenback terms. This meant that, Year-on-year, the EMI sits 501¢ or 42% higher, despite the Australian dollar trading 13.1% stronger than the same period last season.
This week in Mecardo, Andrew Woods examined the 20 to 22 micron price ratio to non-wool staple fibres (see article here). He found that falling supply has driven the price ratio close to 2018 highs around 9, with volume down 40% since then. He noted volume accounts for nearly two thirds of price ratio changes. Analysing deflated USD prices from the mid-1990s, he identified a slightly rising trend to 2010 before prices jumped to a higher level through to 2020. With current supply at extreme lows, the price ratio is likely to reach new levels above the 2018-2019 highs.
The week ahead….
Next week the market heads into recess for Chinese New Year, with sales resuming in the week beginning Monday 23 February.
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Data sources: AWEX, AWI, Mecardo
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Dollar drop supports market
An uptick in supply couldn’t halt Eastern Market Indicator (EMI) progress, as the EMI improved again this week. This week the United States Dollar (USD)
Crossbred wool prices
Crossbred wool prices have endured a torrid time since 2020. Unlike merino, crossbred prices did not bounce back strongly in 2021 following the initial impact
Another big drop in volumes
This week the wool bale offering was lower, with a Western Australian public holiday pausing auctions in Fremantle for the week. The offering of 23,413
Ultrafine wool update
It is a year since Mecardo last looked at the very fine edge of the merino micron distribution in terms of price and volume. Quite
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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.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.