Merino sheep in sunset

The wool market has eased slightly this week after a fortnight of good price rises. In a tale of two sales, fine wool found support while broader categories and cardings succumbed to the stronger Aussie dollar.

The Eastern Market Indicator (EMI) eased 4ȼ to 1166ȼ/kg while in US dollar terms it continued to improve lifting another 8ȼ to US 776ȼ/kg.   Generally, the MPGs were cheaper, however, finer than 17.5 micron received stronger competition, especially in Melbourne, where the best result was a 26ȼ/kg lift for the 17 MPG.  The Western Market Indicator gave back all last week’s gains to post a 27ȼ fall to settle at 1289ȼ/kg.  

Crossbred types were cheaper, noticeably 25 & 26 MPG fell 23 & 20ȼ, while cardings were steady in Sydney, but 20ȼ lower in both Melbourne & Fremantle.

For the second week, the market cleared over 40,000 bales. While AWEX reported that 5.7% of the original offering was withdrawn before the sale, 46,908 bales were offered. With a 9.5% pass-in rate, 42,459 bales were sold. This lifted the average for the season to 38,507 bales per week, well above the 36,500 average of the previous two years.

AWEX also reported that there has been an 8.5% increase in bales offered this season, while the total value of wool traded is $971 million, up $7.0 million on last season.

An interesting observation is that Melbourne & Fremantle sales values are up $9 million & $11 Mill respectively, while Sydney is minus $13 million, highlighting the larger falls in the fine merino types this year.

This week on Mecardo, Andrew Woods looks at how the makeup or quality of the Australian wool clip varies through the season, and between seasons (read here). The supply chain at times can turn up at auction generally assuming volumes and quality will be on par with that of recent years. That leaves the demand side of the market open to supply shocks.

Next week

Next week 47,917 bales are currently rostered, another large offering that will further test the market. Melbourne has 28,000 bales listed and will sell over Tuesday, Wednesday & Thursday, while Sydney & Fremantle are selling Tuesday & Wednesday.

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Data sources: AWEX, AWI, Mecardo

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