More of the same for wool

The Eastern Market Indicator fell back just 2 cents, while the conversion to USD on the back of a slightly easier USD/AUD exchange rate saw the EMI ease US$0.06. Not a lot of action, although the weaker USD price suggests demand was not any stronger week on week.

Finer types of 18 MPG and finer were cheaper in Sydney, however the late sales in Fremantle had the market chasing these types and by end of selling the west posted a good lift compared to last week. This lifted the Western Market Indicator (WMI) by 3 cents for the week.

This will make interesting watching next week, as any late change in Fremantle prices (and after the finish of east coast sales) is often a lead in for the following week market direction. There was also a net +2¢ cent improvement in the indicator in Melbourne, however this was due to increases in the 19 to 21 MPG offsetting easier prices in the 18 MPG and finer.

With all centres conducting two-day sales, the contrast in volumes makes interesting discussion when considering what the sales roster may look like in the future. Sydney offered 9,500 bales and with a 5.1% pass-in rate sold 8,900 bales. Fremantle offered 6,000, passed in 13.8% to sell 5,250 bales. Melbourne as per usual had the largest offering, 22,700 bales to pass in 9.2% for a clearance of 20,600 bales. Almost 60% of the bales sold were through the Melbourne selling centre, while Fremantle contributed just 14% of bales sold.

With the WA wool clip down this year by around 18% (AWTA test receivals to end November), a trend expected to continue into 2025/26 season, the pressure on all wool industry players in the west is significant.

This week on Mecardo, Andrew Woods analysed the year-to-date AWTA test data and noted how the change in supply of certain types will reflect in the price of those types. Eastern Australian volumes were down 6.6% in the three months to November which fits with the eastern flock size being down by 3% with lower fleece weights accounting for the balance. In the west wool volumes were down by 14% partly due to lower fleece weights but mainly due to lower sheep numbers. The extra fine merino wool, concentrated in the sub-17-micron categories looks likely to dampen the sub-16-micron part of the market which has been performing well. For crossbreds, the lower volume could help support prices lift higher in the New Year once the market is past the peak supply period.