No warmth for this weeks wool market

Sheep in paddock photo by Jessa Bottrill

Unfortunately, the second week of the new selling season resulted in a continuation of the opening weeks' sentiment. The market struggled with the twin issues of a slightly stronger AUD/USD and a larger offering trying to digest the build-up of volume over the recess. Sellers were unimpressed, lifting the pass-in rate to 11.7% of the offering, with Fremantle failing to clear 20.8% of its offering.

The Eastern Market Indicator (EMI) closed 26 cents lower at 1,087¢/kg clean, pushed lower by a weaker Merino fleece sector, particularly on Tuesday. The EMI is now sitting at the lowest level since October 2020.

 

While the 17 MPG performed strongly on the opening day, it was unable to hold this momentum and had given back the gains by the end of the week. There were significant falls in the 30 to 40¢ range across the Merino offering in all centres.

 

The weaker market also spread to the one-day sale in Fremantle with the Western Market Indicator down 25¢ on the week to 1,223¢.

Crossbred wool results were probably the least affected this week. In Melbourne, the 28MPG remained unchanged at 375¢. However, 26 & 30 MPG retreated 10 & 9¢ respectively. Again, AWEX reported that “well-prepared” and “long” crossbred types attracted keen support.

Cardings lost 11¢ in Melbourne & Fremantle while holding steady in Sydney.

Originally 41,377 bales were rostered, however by sale day only 32,677 bales came forward; and with 11.7% passed in, just 32,677 bales sold. This was 5,900 fewer bales than last week.

Andrew Woods this week looked at the shifting market share of Cotton (read more here).  In price percentile terms cotton is tracking along with the bulk of the apparel fibres and feedstocks but Cotton stocks are high (as a ratio to use) and so too is the cotton price ratio to polyester staple is high. What appears to be changing is the falling market share of cotton, which is correlated to the above phenomenon of higher stocks and price ratio. 

Next week

A further 33,380 bales are listed for next week with all three centres selling.

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Click on graph to expand

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Data sources: Nutrien Ag Solutions, AWEX, Mecardo

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