Mecardo Stronger Au$ pushes market lower

The fourth week of an easing pattern continued for the wool market this week, with again a below average clearance. The stronger Au$ was the main cause of lower prices to growers, while again demand focused on the medium merino 20 & 21 MPG types lifting them higher.

The Eastern Market Indicator (EMI) fell, down 9ȼ to 1232ȼ/kg, however, with the Aussie dollar almost 2.0ȼ higher, the EMI when expressed in US$ increased by 27ȼ to 833ȼ/kg (US).

AWEX reported broader MPGs remain in favour with many recording positive weekly price gains although buyers actively sought quality lines across the MPG range. Stylish lots with low CVH attracted strong competition.

18 MPG and finer were all quoted lower, with 17 MPG giving up 55 & 37ȼ in Sydney & Melbourne respectively. On the other hand, the 20 MPG was up 15 & 24 ȼ in Melbourne & Fremantle, with the 21 MPG lifting 41 & 18 ȼ in those centres.

The Western market indicator held firm in the face of the stronger Au$, with a larger portion of 20 & 21 MPG wool offered, easing just 2ȼ to finish the week at 1379ȼ/kg.

In the Crossbreds section, a mixed result was observed, 26 MPG fell again losing 13ȼ, while the 28 & 30 MPG categories gained 7 & 9ȼ in Melbourne.

Cardings had another easing week, down 9ȼ Sydney, down 15ȼ in Melbourne and back 14ȼ in Fremantle.

A similar offering of 33,179 bales eventually found their way to the market, after almost 9,000 bales of the original offering were withdrawn prior to sale. With a further 12.5% passed in, 29,018 bales were cleared to the trade, 2,322 more than last week.

This week on Mecardo, Andrew Woods looked at the price cycles of the wool market, especially as the deterioration in the economic backdrop to the greasy wool market points to the risk of recession in some of the major economies associated with wool processing and consumption.