The Eastern Market Indicator (EMI) lifted 32¢ to close this week at 890¢, losing 7 cents on the final day but overall positive. The AUD was weaker down US$0.135 at US$0.722 which saw the EMI in USD terms also 12¢ higher, closing at 643¢. Fremantle followed suit this week with the Western Market Indicator rising 27¢ and now sitting at 922¢.
An offering of just 19,654 bales came forward, a decrease of 9,300 on last week. With a pass-in rate of 5.7% nationally, 18,543 bales were sold, 4,222 bales less than last week.
This week on Mecardo, Andrew Woods had a look at the down cycles in the wool market back to 1911. Taking a retrospective view as far as wool prices go, 1951 stands out as the peak price point along with high price levels during the First World War. The 2018 peak price took the deflated price back up to late 1988 levels, and now the 2020 downturn has taken the merino price back down to levels last seen briefly in 2009 and before that in 2000.
The current down cycle in merino prices (down 60%) is a large one but not yet as large as the four main down cycles of the 20th century, which fell an extra 10-15%. Unfortunately, this means historically there is some precedent for further downside in the coming months if demand does not improve. It was also noted that “on a brighter note” most of the downside appears to have already occurred for the cycle.
Now, the uncertainty centres on time, and how long before we can expect prices to start picking up.
The crossbred section recorded the largest gains in percentage terms, increases ranging from 25 to 65 cents.
Cardings followed the general market lead to improve in all centres, Melbourne having a 28-cent lift…
Market up on reduced offering
The Eastern Market Indicator (EMI) lifted 32¢ to close this week at 890¢, losing 7 cents on the final day but overall positive. The AUD was weaker down US$0.135 at US$0.722 which saw the EMI in USD terms also 12¢ higher, closing at 643¢. Fremantle followed suit this week with the Western Market Indicator rising 27¢ and now sitting at 922¢.
An offering of just 19,654 bales came forward, a decrease of 9,300 on last week. With a pass-in rate of 5.7% nationally, 18,543 bales were sold, 4,222 bales less than last week.
This week on Mecardo, Andrew Woods had a look at the down cycles in the wool market back to 1911. Taking a retrospective view as far as wool prices go, 1951 stands out as the peak price point along with high price levels during the First World War. The 2018 peak price took the deflated price back up to late 1988 levels, and now the 2020 downturn has taken the merino price back down to levels last seen briefly in 2009 and before that in 2000.
The current down cycle in merino prices (down 60%) is a large one but not yet as large as the four main down cycles of the 20th century, which fell an extra 10-15%. Unfortunately, this means historically there is some precedent for further downside in the coming months if demand does not improve. It was also noted that “on a brighter note” most of the downside appears to have already occurred for the cycle.
Now, the uncertainty centres on time, and how long before we can expect prices to start picking up.
The crossbred section recorded the largest gains in percentage terms, increases ranging from 25 to 65 cents.
Cardings followed the general market lead to improve in all centres, Melbourne having a 28-cent lift…
The week ahead….
The national quantity is up next week, with 33,558 bales listed, with Melbourne & Sydney selling on two days; Fremantle only the one day offering on Wednesday.
The flicker of hope in this week’s market will be tested with the increased supply next week.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: AWEX, Mecardo
Categories
Have any questions or comments?
Upward trend continues
The second week of sales for 2021 was described as exhibiting “keen competition” on the large offering. The positive market continued up to the last
VM levels changing
After three tough years in eastern Australia, good rainfall in 2020 has been a blessed relief for most regions. With a change in seasonal conditions
Australian wool exports to China – a successful partnership
The new year wool sales have opened, and again it is the dominance of China that is driving the early sales. This is no surprise
Change in Merino micron curves driven by changes in supply
Mecardo has published quite a few articles on micron premiums and discounts in Merino prices, as it leads to substantial changes in relative prices and
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
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.
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.
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.