Flock of merino sheep close up

A smaller offering with a reduced percentage of low vegetable matter (VM) wool has pushed the Eastern Market Indicator upward this week. Further price support was found from gun-shy Western sellers and Eastern market buyers scrambling for low VM.

The Eastern Market Indicator (EMI) ended the week at 1310ȼ/kg, up a modest 8 ȼ ( 0.6%) week on week. When expressed in US dollars, the EMI has swung back with a 13ȼ increase to 874 USȼ/kg.  

With lots with low vegetable matter becoming harder to come across, bidding has been healthy for those that are found on the auction floor. Sydney had a positive week for the most part, with some of the finer categories down slightly, 17.5MPG was down 8ȼ. In Sydney, 19.5 MPG was best on ground this week up 53ȼ to finish the week at 1595ȼ/kg. Further South to Melbourne, prices were up at the finer end of the spectrum.  17MPG saw a 30ȼ increase to 2230 ȼ/kg.   

The Western Market Indicator (WMI) had another modest increase of 7ȼ to 1479ȼ/kg.  WA wool sellers haven’t been shy to withdraw lots prior to sale, with 9.3% this week withdrawn, perhaps contributing to the appreciation of pricing out west of late.

No change this week in crossbred markets, 28MPG tracked sideways to 335ȼ/kg in Melbourne.

Cardings were down this week, a 10ȼ decline to 821 ȼ in Sydney, an 8ȼ reduction ending at 826ȼ Melbourne, and 9ȼ down to 810ȼ  in Fremantle.

34,720 bales were sold this week nationally, which is a new low mark for the calendar year.  With the pass-in rate at 10.6%, the decline in sales volume reflects the level of pre-sale withdrawals as opposed to buyer disinterest.  For the 2nd consecutive week sales volumes were below the season’s weekly average (37k bales).

This week on Mecardo, Andrew Woods provides us with an update on the German IFO indices and the implications of the recent positive uptick for Merino prices.  The late rebound in 2022 Merino prices was matched by a small improvement in the German Manufacturing Index. A return to neutral economic sentiment is an improvement, but expectations are not yet bullish.

The week ahead….

Expectations volume-wise are much higher than the previous few weeks with 48643 bales scheduled for sale next week.  Sydney, Melbourne, and Fremantle will have sales on Tuesday and Wednesday.

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Data sources: AWEX, Mecardo

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