With much lower supply already flagged last week for the wool market, prospects looked favourable heading in. The result exceeded expectations with all micron categories improving week on week and the Eastern Market Indicator (EMI) jumping 30¢ to 1225¢/kg, it’s highest value since May 2023.
A 22% decline in the offering was just what the doctor ordered, and buyers were eager from the jump to push bids higher. Sellers were not willing to look a gift horse in the mouth, and the majority of wool cleared as the pass in rate fell drastically to just 3% this week with 31626 bales selling.
In Sydney merino MPG gains ranged from 22¢ – 55¢ with 18MPG rose 51¢ to 1618¢/kg. Melbourne’s gains ranged from 28-59¢ as 19MPG gained 43¢ to 1512¢. The good fortunes for wool also headed west over the Nullarbor as the Western Market Indicator gained 35¢ to 1394¢/kg and gains ranged between 30-59¢. 21MPG in Fremantle increased 30¢ to 1468¢/kg.
Crossbred wool gains were more modest with 28MPG best on ground with a 14¢ price rise to 427¢/kg.
The impact of meaningful supply easing was felt this week, but for longer term prospects, the best outcome for wool prices is when there is synchronised economic growth from the major global economies of the US, China and the EU. This Week on Mecardo, Andrew Woods provided an update on the economic situation of these regions to ascertain any signals of sustainable price increases for wool. German and Chinese economic data continues to underwhelm, but US bond yields look promising for some respite in wool pricing in the coming 12 – 18 months (Read more here).
Wool auctions this week capitalised on a 0.62 AUDUSD exchange rate like clockwork. However, the exchange rate has pushed back to US 63¢ late this week. Initial reactions would be for prospects to look less favourable next week in response, but if markets are expecting the US dollar to weaken further in the future (and our exchange rate strengthens), this week’s momentum could consolidate. The key right now for export buyers is to avoid being on the wrong end of an Aussie dollar rally.
The week ahead….
Higher supply and a higher Aussie dollar for next week might spoil the party of this week’s great result (and has done in previous weeks).
The market, however, must account for continued volatility in the US dollar as trade disputes roll on, some buyers might be keen to buy now if they suspect that the beginning of 2025 was the low for the exchange rate.
Sydney and Fremantle are selling Tuesday and Wednesday, Melbourne, Wednesday and Thursday.
This week the wool bale offering was lower, with a Western Australian public holiday pausing auctions in Fremantle for the week. The offering of 23,413
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.
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.
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.
Wonder week for wool
A 22% decline in the offering was just what the doctor ordered, and buyers were eager from the jump to push bids higher. Sellers were not willing to look a gift horse in the mouth, and the majority of wool cleared as the pass in rate fell drastically to just 3% this week with 31626 bales selling.
In Sydney merino MPG gains ranged from 22¢ – 55¢ with 18MPG rose 51¢ to 1618¢/kg. Melbourne’s gains ranged from 28-59¢ as 19MPG gained 43¢ to 1512¢. The good fortunes for wool also headed west over the Nullarbor as the Western Market Indicator gained 35¢ to 1394¢/kg and gains ranged between 30-59¢. 21MPG in Fremantle increased 30¢ to 1468¢/kg.
Crossbred wool gains were more modest with 28MPG best on ground with a 14¢ price rise to 427¢/kg.
The impact of meaningful supply easing was felt this week, but for longer term prospects, the best outcome for wool prices is when there is synchronised economic growth from the major global economies of the US, China and the EU. This Week on Mecardo, Andrew Woods provided an update on the economic situation of these regions to ascertain any signals of sustainable price increases for wool. German and Chinese economic data continues to underwhelm, but US bond yields look promising for some respite in wool pricing in the coming 12 – 18 months (Read more here).
Wool auctions this week capitalised on a 0.62 AUDUSD exchange rate like clockwork. However, the exchange rate has pushed back to US 63¢ late this week. Initial reactions would be for prospects to look less favourable next week in response, but if markets are expecting the US dollar to weaken further in the future (and our exchange rate strengthens), this week’s momentum could consolidate. The key right now for export buyers is to avoid being on the wrong end of an Aussie dollar rally.
The week ahead….
Higher supply and a higher Aussie dollar for next week might spoil the party of this week’s great result (and has done in previous weeks).
The market, however, must account for continued volatility in the US dollar as trade disputes roll on, some buyers might be keen to buy now if they suspect that the beginning of 2025 was the low for the exchange rate.
Sydney and Fremantle are selling Tuesday and Wednesday, Melbourne, Wednesday and Thursday.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Data sources: AWEX, Nutrien Ag Solutions, Mecardo
Categories
Have any questions or comments?
Another big drop in volumes
This week the wool bale offering was lower, with a Western Australian public holiday pausing auctions in Fremantle for the week. The offering of 23,413
Ultrafine wool update
It is a year since Mecardo last looked at the very fine edge of the merino micron distribution in terms of price and volume. Quite
Supply plummets, boosting prices
The Eastern Market Indicator (EMI) jumped this week as buyers bid strongly in a tighter supplied market. The EMI was up 54¢ to finish at
International sheep meat supply and lamb price
Sheep meat prices (a weighted average of lamb and mutton) in 2026 are tracking at their best levels in deflated terms at least since 1980,
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
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.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.