The wool market, much like many other businesses in Australia, was not firing on all cylinders after the Melbourne Cup. Wednesday's bidding was less than ideal, dampening market sentiment. However, a Thursday turn of foot saw significant improvement across the board, helping to restore balance by the end of week.
East Coast wool markets on balance tracked sideways as the Eastern Market Indicator (EMI) lost 2ȼ to 1167ȼ/kg, in US dollars, the EMI improved 9ȼ to 723ȼ/kg. Demand for wool remains consistent week-on-week, as clearance rates dropped only half a percentage point and sales volumes were within 2% of the seasonal weekly average of 38K bales. 18MPG in Sydney improved 10ȼ to 1522ȼ/kg and in Melbourne, broader categories performed best as 21MPG rose 23ȼ to 1298 ȼ/kg but 17MPG lost 17ȼ to 1685 ȼ/kg.
The supply of Merino fleece that has a low incidence of vegetable matter continues (vm) to remain elevated when we compare it to last season. 52% of the Merino fleece clip this week exhibited <1.0%vm, last season averaged 45% and for this season the average has been 47%. With the supply of low vm wool higher currently, bidders have more ideal lots to choose which can impact auction-day demand
West Australian wool markets bounced back this week, assisted by a 5.9% decline week on week of the offering. All categories improved but the broader fleece led the way with the 21MPG improving 20ȼ to 1299ȼ/kg.
The crossbred wool categories declined again this week, as MPGs from 26 to 30 all saw double-digit declines, with Sydney 28MPG losing to 20ȼ to 350ȼ/kg. This downward pressure was mentioned in this week’s wool analysis, as Andrew Woods investigated Auction sales volumes. Crossbred demand in terms of gross sales value has improved but volume sold is well up and putting downward pressure on price. The further long-term upside for crossbred wool will be heavily reliant on reduced supply, which in theory will eventuate after this season’s significant level of lamb and sheep turnoff.
Next week
Next week’s offering is projected to be 45 419 bales with sales on Tuesday and Wednesday in all centres.
That offering would be 6% higher week on week which will add some supply-side pressure, however, the scheduled WA offering for the 2nd week running will be 5% lower.
In mid-2022 Mecardo looked at the international supply of sheep meat (albeit from a limited number of countries) showing how lower supply had positively correlated
Sydney and Fremantle markets made up for lost time with big improvements across both the broad and merino fleece categories this week. The lower Aussie
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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.
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Turn of foot just in time
Next week
Next week’s offering is projected to be 45 419 bales with sales on Tuesday and Wednesday in all centres.
That offering would be 6% higher week on week which will add some supply-side pressure, however, the scheduled WA offering for the 2nd week running will be 5% lower.
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Data sources: AWEX, AWI, Mecardo
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Sydney and Fremantle markets made up for lost time with big improvements across both the broad and merino fleece categories this week. The lower Aussie
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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.
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.
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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.