It was a similar story to what we have seen for much of the past 12 months in the wool market this week, with fine wool attracting solid demand and price increases, while the rest of the offering produced softer prices. The stronger finish in Melbourne was more widespread across the micron ranges, however fine MPG’s continued gaining momentum across the day.

The Eastern Market Indicator gave up 9¢ to finish at 1291¢. A similar result was posted in US dollar terms with the Aussie dollar up 1 cent to US$0.771, dropping the EMI 6 US¢, to finish at 996¢.

At Fremantle sales, the WMI fell 18 cents for the week settling at 1318.

The strength of the market again came from the finer types with all MPG’s 18 and finer rising, as well as the 18.5 MPG in Melbourne, while all broader types were lower. The finer the micron the larger the rise this week. As an example, the 17 MPG was 56 cents dearer in Melbourne & up 30 cents in Sydney, while the 22 MPG was down 30 & 57 cents respectively.

The Crossbred offering met with resistance for less well-prepared lines, on Thursday in Melbourne this lifted the Crossbred pass-in rate to 27%.

Cardings again were relatively stable although AWEX reported Fremantle cardings lifted 13 cents.

An increased offering of 46,256 bales came forward this week, and with a national pass-in rate of 14.2%, 39,706 bales were sold this week. 531,238 bales have been sold in the first 13 selling weeks of 2021, averaging just over 40K each week. This time last year, 416,532 bales had been sold by the 13th selling week.  

Average bales sold per week for the season to date is at 33,030, up nearly 6000 more than the weekly average for the 2019/20 season.

This week on Mecardo, Andrew Woods took a look at wool stock levels held by farmers. The stock held today has little relationship to the level of stock overhang of the 1990s and its depressing effect on the merino market for the best part of a decade. There are some significant differences this time around, including strong cashflows from livestock, low wool production (compared to record wool production in 1990) plus wool stock levels are nowhere as high as they were in the 1990s in either absolute or proportional terms. This article shows that stock flows back into the market will be restrained for the time being as price levels are not attractive in relation to passed in values for many categories.

Commodity Conversations

The week ahead….

Next week there is another reasonably large offering, with 45,544 bales on offer across the three principal selling centres. 24,238 bales are listed for Melbourne, 10,241 for Sydney and 11,065 for Fremantle. There are no sales Thursday this week, only Tuesday and Wednesday.

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Data sources: AWEX, AWI, Mecardo

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