Market opens with falls across the board

The final sale before the three-week recess had an air of confidence with over 42,000 bales sold into a market that was fairly solid. The opening sale post the winter break was anything but solid, large falls across all categories as well as big grower withdrawals and pass-in rates.

Across the week, the Eastern Market Indicator (EMI) fell 56ȼ to settle at 1,372ȼ, a 3.9% reduction. The Australian dollar was weaker by US$0.01 compared to the previous sales at US$0.736, however this was unable to support the market with the EMI in US dollar terms down 55ȼ or 5.2% to 1,010ȼ. 

The west was also down in line with the EMI, with the Western Market Indicator (WMI) falling also by 56ȼ to finish at 1406ȼ.

A large offering was presented, which isn’t unusual following the winter recess, however after 7.3% of the roster were withdrawn 49,181 bales were offered. Overlaying the high pass-in rate of 33.2%, by the close of selling Thursday 32,839 bales were sold. This was 9,660 fewer than the 42,441 in the sale before the break.

Reports from exporters were that COVID-19 problems were again impacting wool processing mills in China, with the important region west of Shanghai significantly impacted.

No indicators were spared, and AWEX reported these falls were felt across the skirtings sections as well. The biggest falls were in the fine end, with the 16.5 MPG in Melbourne most impacted dropping 136 cents.

The crossbred indicators were also in reverse this week, giving up 21 to 38 cents. Notably the 30 MPG was down 25 cents in Sydney and 30 cents in Melbourne.

Cardings fell 30ȼ in Melbourne, 45ȼ in Sydney with Fremantle giving up 61ȼ for the week.

This week on Mecardo, Andrew Woods looked at the early season wool price performance in recent years (view article here). The 19 MPG has fallen by 22-23% during August/September of the past two seasons, however it has subsequently regained half or more of the fall in price by late September/October.

Forward prices are holding at present so any possible weakness in price is being called as short term by the forward market.

The week ahead….

Next week an offering of 41,284 bales are rostered, there will be concerns regarding the depth of buying orders based on this weeks results. Growers are expected to withdraw and wait and see when demand returns.

Have any questions or comments?

We love to hear from you!
Print This Post

Click on graph to expand

Click on graph to expand

Click on graph to expand

Data sources: AWEX, AWI, Mecardo

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!
Australian wool manufacturer
Sheep

Crossbred wool and acrylic

At the risk of flogging a subject to death Mecardo has another look at crossbred wool prices this week, in relation to acrylic staple fibre

Read More »
Wool

Slow start, then action!

AWI reported the first day of selling had buyers operating in an atmosphere “devoid of confidence”, which despite a weaker Au$ saw prices fall. However,

Read More »
Sheep in a yard
Wool

Vegetable matter discounts

Mecardo looked at vegetable matter (VM) discounts for broad merino in mid-August, when they had blown out to extreme levels. This article takes a look

Read More »

Don’t have an account with us? Join free.

You can have full premium access to all of our content with a monthly or annual subscription. 

Alternatively, create a free account to access our Insights blog and two free premium article a month!

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
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.

Photo of a farmer surrounded by Merino sheep in dusty yards
Research: Analysis of the Australian sheep flock

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. 

Image of harvested grain pouring into a chaser bin
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.