Seasonal hauteur mid point break dancing.

998408663JoanneEdson_125638758_1AA9F05F7BCA41B29BC671319F20DCF4

Around this time of the season the combination of staple strength and mid-point break often becomes an issue for exporters putting mill consignments together, as it is this year. This article takes a look the interplay of these two wool characteristics and the effect they have on wool top specifications.

One of the key variables which drive the variation of fibre length in wool tops (coefficient of variation in hauteur or CVH) is the proportion of lower strength in the middle of the staple (mid-point break or MPB). CVH for a farm lot is calculated using the TEAM formula and is used by the buy side in greasy wool markets to filter out farm lots which do not suit the requirements of particular consignments.

Specifically it is high levels of MPB which causes problems for exporters constructing mill consignments either simply because they have trouble meeting the required consignment averages or the limits place on any one lot (AOL) preclude lots with a high calculated CVH. While micron remains the key driver of value in the market (especially in recent years) within a given narrow range of micron, merino combing fleece is then drafted into various potential consignments with the value of these potential consignments is generally inverse to the level of CVH – higher for lower CVH.

Figure 1 shows the monthly proportion of 70 to 100 mm length merino fleece wool which had a MPB of 75% or more. The level of high MPG ranges from around 23% to around 6%, and has a strong seasonal cycle, which means the proportion of merino fleece with a high level of MPB regularly ranges from a lot to a little. More often than not the level of high MPB peaks with a month or so of Christmas, near the middle of the wool selling season, with level reaching lows in the April to Jun period. The level of high MPB is currently on the rise.

Figure 2 adds the average monthly staple strength (shown on the right hand axis and inverted) for 70 to 100 mm length merino fleece to the level of high MPB. You will notice that the two series tend to be correlated with level of high MPB reaching a low when staple strength reaches a seasonal high. The reverse also holds with the level of high MPB reaching seasonal peaks (or close to it) often when the staple strength is low which is often around mid-season (Christmas plus or minus a month). From top maker perspective this means two factors heavily influencing CVH (staple strength and mid-point break) are correlated – they tend to be both good together or a problem together. We are currently going into the period where they both push up CVH.

Table 1 uses the TEAM 3 formula to calculate CVH for a range of combinations of staple strength mid-point break, assuming a constant fibre diameter of 19.5 micron and greasy staple length of 90 mm. The shaded numbers highlight where the calculated CVH is above 50, helping to show how the interaction of staple strength and mid-point break is important.

What does it mean?

Staple strength is not necessarily staple strength, as the level of mid-point break can influence the impact staple strength has on the wool top performance. Near the middle of the selling season (now to February) staple strength tends to be low (for the season) and mid-point break high (for the season) which is a problem for the construction of mill consignments. Wool with poor CVH tends to suffer greater discounts, and this is happening in the current market.

Have any questions or comments?

We love to hear from you!

Print This Post

Key Points

  • Staple strength tends to reach a seasonal low in the middle of the selling season while the level of mid-point break tends to reach a high.
  • These two wool characteristics are important in driving the level of CVH in wool tops.
  • The seasonal variation cycle can influence the magnitude of price discounts for wool with high CVH. 

Click on figure to expand

Click on figure to expand

Data sources: AWEX, ICS

Photo Credit: Joanne Edson

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!
Wool in shearing shed
Wool

Another week another slide

The EMI continued its recent downward trend, with a fifth week of softer prices. While the week closed with a slightly more positive trend, the

Read More »

Want market insights delivered straight to your inbox?

Sign up to the mailing list to get regular updates to new analysis and market outlooks

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
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.

Photo of a farmer surrounded by Merino sheep in dusty yards
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. 

Image of harvested grain pouring into a chaser bin
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.