The second week of sales for 2021 was described as exhibiting “keen competition” on the large offering. The positive market continued up to the last day of selling, and impacted all types and microns. The standout was again the fine end, with AWEX noting that premiums were paid for better processing measurements particularly low CVH (Variation in Hauteur Length) wools.

The Eastern Market Indicator lifted 30 cents for the week, to close at 1202¢. This is now the first time the EMI has been above 1200 cents since October where it popped above 1200 for a week, otherwise we need to look back to May 2020 for this level.

The AUD continued to rally sitting at US$0.777 which saw the EMI in USD terms finish 27 cents stronger at 934¢. Fremantle, after a strong performance last week, fell marginally by 3¢, settling at 1219¢.

The fine end of the merino section continued to be the strongest performer, with 18.5 MPG & finer lifting between 67 and 156 cents in Melbourne.

Again, we had the fine wool premiums continue to build, the 17 MPG premium over 19 MPG now sits at 610 cents; the last time the premium was higher than this was in the first week of May 2018 where the premium 626 cents.

This premium is likely to stabilise now around 700 cents in US$ terms as this has been the extent of past premiums (with the exception of 1998 & 2011). 

Crossbred types hovered at recent levels; however, it was noted that poorly prepared clips struggled, at times unable to attract buyers. Across the board the rises were in the range of 1 to 12 cents predominately in the 28 to 32 MPG’s, while 26 MPG fell 8 cents.

Cardings had a strong week with Melbourne quoted up 56 cents, followed by Fremantle up 39 cents and Sydney plus 29 cents.

AWEX reported that the 44,254 bales were offered, 8.5% withdrawn and 7.6% passed-in resulting in 40,883 bales sold, 5,695 less than last week. This is in excess of 40,000 bales for the opening two sale weeks lifting the average clearance to just under 30,000 bales per week for this season.

This week on Mecardo, Andrew Woods looked at the effect the improved seasonal conditions in 2020 in eastern Australia is having on VM levels.

This was starting to be reflected in higher VM levels in the December quarter, and resulted in increased discounts for higher VM as a consequence.

The seasonal pattern in VM levels tells us they will increase through to next spring. What happens after that depends on rainfall between now and then. The supply of higher VM wool is set to continue increasing through to late 2021.

The week ahead….

Supply looks to already be easing as the build-up over Christmas appears to have been offered, so the extent of the strong demand, especially for fine types should continue.

A slightly reduced offering of 43,000 bales is rostered, with Melbourne, Sydney & Fremantle selling over two days.

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Data sources: AWEX, Mecardo

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