The Australian wool market continued its decline for the 2nd consecutive week. The benchmark Eastern Market Indicator (EMI) declined by 8 cents to close at 1,184 cents, as the week started with a softer tone.
Supply pressure did contribute to the slight easing in the market as the pass-in rate (8.2%) again surpassed the season average (7.7%). An uptick in supply was always going to halt further upward momentum in pricing, but the 38,455 sold bales this week was still 15% above the weekly average of bales sold. Considering the current macroeconomic conditions and how the market has recently reacted to large offerings, this is a great result, with buyers willing to come to the party on ideal lots at current price levels.
In Sydney, 16.5 MPG improved 15c to 1767c/kg, 19MPG rose 10c to 1478c/kg, but 17.5 MPG lost 36c. The Southern market again saw steeper price declines at the finer end of the spectrum, with 17MPG losing 30c to 1648c/kg and sensing the market turn on the finer end, Merino fleece pass-in rates down south reached 11%. The Western Market Indicator (WMI) improved 5c to 1343c/kg.
Crossbred wool declined across both markets, with 26MPG in Sydney declining 52c to 562c/kg.
This week on Mecardo, Andrew Woods took a look at futures prices to gauge the potential for upside in wool prices in the next two to three years (read more here). Historically, wool market price cycles like to halve and double. If we make an assumption that we are currently in the low of the price cycle, then extending a 50-100% price rise across two to three years as an average begins to see multi-year forward prices look more attractive.
Next week
Next week’s auction has 41,029 bales rostered for sale, with all three centres selling on Tuesday and Wednesday.
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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Vast volume clears
Supply pressure did contribute to the slight easing in the market as the pass-in rate (8.2%) again surpassed the season average (7.7%). An uptick in supply was always going to halt further upward momentum in pricing, but the 38,455 sold bales this week was still 15% above the weekly average of bales sold. Considering the current macroeconomic conditions and how the market has recently reacted to large offerings, this is a great result, with buyers willing to come to the party on ideal lots at current price levels.
In Sydney, 16.5 MPG improved 15c to 1767c/kg, 19MPG rose 10c to 1478c/kg, but 17.5 MPG lost 36c. The Southern market again saw steeper price declines at the finer end of the spectrum, with 17MPG losing 30c to 1648c/kg and sensing the market turn on the finer end, Merino fleece pass-in rates down south reached 11%. The Western Market Indicator (WMI) improved 5c to 1343c/kg.
Crossbred wool declined across both markets, with 26MPG in Sydney declining 52c to 562c/kg.
This week on Mecardo, Andrew Woods took a look at futures prices to gauge the potential for upside in wool prices in the next two to three years (read more here). Historically, wool market price cycles like to halve and double. If we make an assumption that we are currently in the low of the price cycle, then extending a 50-100% price rise across two to three years as an average begins to see multi-year forward prices look more attractive.
Next week
Next week’s auction has 41,029 bales rostered for sale, with all three centres selling on Tuesday and Wednesday.
The Sydney sale is a designated superfine sale.
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Click on graph to expand
Click on graph to expand
Data sources: AWEX, ICS, Mecardo,
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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.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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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.