Merino market upswing carries on in the East

Flock of merino sheep close up

The positive run continued in the Merino market this week in the east, however, the west failed to sustain the momentum and gave way. As the selling season approaches its tail end, wool volumes are gradually easing, contributing to the recent price improvements.

The Eastern Market Indicator gained 14¢ or 1.2% to settle at 1172¢/kg. With a rise in the AUD to 0.65 US¢, this put the EMI in USD terms at 764¢ which was a 2.8% lift on the week prior.

Both Sydney and Melbourne markets were stronger again this week, opening to an invigorated atmosphere in the sales rooms with traders having a solid go.  While activity was more subdued on day two, and some of the price gains were lost, overall, there were some solid price improvements in the east.

Sydney Merino fleece picked up between 17 and 45¢ for the 17 to 20 MPG’s. Fine wool MPG’s in Melbourne improved 16 to 33¢ on the week, but 19MPG slipped 5¢ lower. Crossbred wools sold firm to slightly weaker overall.

Day one in Fremantle didn’t quite have the same gusto as the eastern markets but prices did still improve up to 10¢. Good, stylish fleece sold well and received a premium but reoffers or anything with fault received limited interest. Losses across all Merino types and descriptions occurred on day two in Fremantle, leaving the WMI Western Market Indicator down 1¢ week on week and most Merino MPGs 5 to 15¢ lower compared to the week prior.

It was Merino Cardings that had the best run in the West, up 37¢ week on week to 765¢. Cardings also sold well in Sydney and Melbourne, lifting 3 and 12¢ respectively.

The offering of 41,788 bales was lower this week compared to last, and in the end, 39,624 bales sold. The national pass-in rate lifted to 5.2% this week, but this was largely driven by the west where the softer market saw a pass-in rate of 8.7%.

The mutton market is the other important piece of the equation for sheep producers and the volatility is another headwind at a time of weak wool prices. Mutton prices are inherently more volatile than lamb prices (read more) but the recent collapse and recoveries have been similar to earlier patterns during the past half a century, making the movements in the last 12 months not unfamiliar. 

Next week

Next week all centres are selling on Tuesday and Wednesday with 41,433 bales registered.

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Data sources: AWEX, Nutrien Ag Solutions, Mecardo

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