The wool market opened to a weaker tone as a stronger Au$ pressured buyers, although AWEX noted that Ceased Mulsed (CM)/ Non-Mulsed (NM) wool at times received strong premiums. Across the week another relatively stable result was reported, providing a confident outlook in the face of bi-lateral and global uncertainty.

The Eastern Market Indicator (EMI) eased slightly, falling 13¢ this week to finish at 1,306¢. A similar result was posted in US dollar terms with the Aussie dollar fluctuating during the week to finally settle back at US$0.77, pulling back the EMI 11 US¢, to finish at 1008¢.

At Fremantle sales, the Western Market Indicator (WMI) posted a similar result, retracing 5¢ for the week to settle at 1,350¢.

While the market had a cautious start, by the end of the week, with only Melbourne selling on Thursday, a change of direction was reported led by low VM wools. Overall, there was little change in the MPG’s however, as the lift in better wools only offset the decline in high VM types. The large weekly offering attracted solid support, across a range of exporters.

The Crossbreds had another difficult week, with AWEX reporting 8 to 30 cent falls, with the 30 MPG falling 27 cents on top of last week’s 25 cent fall.

Cardings followed suit finishing lower in all centres with the Cardings indicator down 8¢ in Fremantle, 20¢ in Sydney & 22¢ in Melbourne. Low yielding cardings were the principle drivers of the indicators downward direction.

The offering increased by 2,213 to 49,771 bales this week after 4.8% of the original offering was withdrawn. With a 12.0% pass-in rate, 43,808 bales were cleared to the trade, 3,500 bales more than last week, with the average weekly bales sold for the season to date now 33,851.  This is 6,700 more than the weekly average for last season.

Of note is that for the same week in 2020, just 21,315 bales were sold, and the EMI was 11% lower. In the face of all the challenges the market has performed well.

This week on Mecardo, Andrew Woods took a look at the gross sales value of 21 micron at Australian auctions, which have been relatively consistent in the two decades to 2019, albeit with some cyclical variations.

The stability in gross sales value shows how the trend lower in Australian production of 21 micron has underpinned the trend higher in price. The gross sales value proffers a view of demand, which price cannot as it is too influenced by supply.

Commodity Conversations

The week ahead….

Next week there is a reduced offering listed, with 45,929 bales listed for sale across the three principal selling centres. All centres will sell on Tuesday & Wednesday only. Cautious optimism for the offering next week on the back of a solid Melbourne sale on Thursday.

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Data sources: AWEX, AWI, Mecardo

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