Prices at the finer end easing and broader categories firmer was a characteristic of both the Sydney and Melbourne markets this week, as has been the case (for the most part) this season. With all micron categories declining recently, it becomes easy to lose sight of the underling trends driving the market and become fixated on the immediate outcomes. However, with an unchanged EMI this week, it provides an opportunity to pause to assess what direction the wind is blowing.
As detailed by Mecardo previously, the shift in supply towards
a finer average micron in early 2024 has been contributing to the steeper price
declines in finer micron categories. This
financial year, 17MPG in Melbourne has lost 140 ȼ/kg; 21MPG in Melbourne is 12ȼ
higher in the same period. In Figure 1 we can see the 17 MPG in Melbourne
approaching the 21MPG and the basis between the both has come in considerably
in the last 12 months as a result, (a decline 475ȼ or 52% lower).
This week In Sydney, 17MPG lost
5ȼ to 1757ȼ/kg and In Melbourne, 17MPG lost 9ȼ to 1755ȼ/kg. 20MPG in Sydney
improved 6ȼ to 1348ȼ/kg and 21MPG in Melbourne gained 2ȼ to 1321ȼ/kg.
Demand for wool has been a bear that refuses to be poked. Signs
of economic recovery that the wool trade has been searching for, are yet to
appear. In an easing market, bidders will still be eager to secure stock, but a
momentum shift is needed to push prices up. This week’s demand was steady with a
consolidation of volumes sold (just a 1.7% decline Week on week) and an
unchanged pass-in rate (steady at 9.5% nationally).
Whilst total wool supply doesn’t necessarily impact the relative
performance of individual micron categories, auction offerings have been ahead
of schedule this season, contributing to an easing market. This could be about to change, a month ago
total season offerings were 6.7% higher year on year, this week the number is
just 1.6% higher than last year. Further
to this, offerings and volumes sold are typically higher at this time of year
(see Figure 2).
Next week
With the foot off the gas momentarily for auction volumes, it will be interesting to see if this has an impact on the rate of the fine wool premium declines. It is likely that premiums will still receive some downward pressure as we move forward, but the peak periods of this pressure are likely to dissipate after Quarter 2.
Sydney’s designated superfine sale will be watched keenly to identify whether fine wool premiums continue to decline steeply or are approaching a steadier state.
The higher Australian dollar has prompted questions about the likely impact on local extensive agricultural commodity prices. Mecardo has covered this topic before. The relationship
The Australian wool market extended its winning streak this week, with the Eastern Market Indicator climbing 16¢ to finish at 1,693¢/kg ahead of next week’s
Greasy wool prices have increased markedly this season, in the absence of any substantial improvement in macroeconomic indicators or major apparel fibre prices, the usual
The Australian wool market recovered from the losses recorded in the previous series, with prices lifting across both selling days. The Eastern Market Indicator rose
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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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.
Wool market catches its breath
Next week
With the foot off the gas momentarily for auction volumes, it will be interesting to see if this has an impact on the rate of the fine wool premium declines. It is likely that premiums will still receive some downward pressure as we move forward, but the peak periods of this pressure are likely to dissipate after Quarter 2.
Sydney’s designated superfine sale will be watched keenly to identify whether fine wool premiums continue to decline steeply or are approaching a steadier state.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: AWEX, AWI, Mecardo
Categories
Have any questions or comments?
Will a rising Australian dollar impact commodity prices
The higher Australian dollar has prompted questions about the likely impact on local extensive agricultural commodity prices. Mecardo has covered this topic before. The relationship
Market momentum persists ahead of Chinese New Year
The Australian wool market extended its winning streak this week, with the Eastern Market Indicator climbing 16¢ to finish at 1,693¢/kg ahead of next week’s
Broad merino price, volume and price ratio
Greasy wool prices have increased markedly this season, in the absence of any substantial improvement in macroeconomic indicators or major apparel fibre prices, the usual
Wool market finds its footing
The Australian wool market recovered from the losses recorded in the previous series, with prices lifting across both selling days. The Eastern Market Indicator rose
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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.
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.