Shorn wool in heap in shearing shed

The wool market moderated this week after its recent rally, with the Eastern Market Indicator (EMI) easing 5 cents to 1,245 cents. The other indicators also cooled with the Northern Market Indicator (NMI) held at 1,282 cents, the Southern Market Indicator (SMI) at 1,220 cents, and the Western Market Indicator (WMI) at 1,400 cents. Reporting suggested that the decline reflects softer demand that occurred later in the week, particularly for finer Merino fleece, signaling potential caution among buyers after the recent gains in the market.

This week’s micron price guide highlights a divergence between finer and coarser wools. Finer Merino wools (16.5 to 19.5 microns) experienced consistent declines across the board, with 19.5 microns dropping the most, by 17 cents to 1,527 cents, and 16.5 microns quoted at 1,810 cents. The 17.5-micron category fell 12 cents to 1,675 cents, while 18.5 microns dropped 6 cents to 1,566 cents.

In contrast, crossbred wools (26 to 30 microns) showed resilience, with 26 microns rising 3 cents to 615 cents and 30 microns gaining 12 cents to 377 cents in the south. The Merino Cardings (MC) indicator lifted higher in the south and west while holding steady at 739 cents in the Melbourne sales, indicating stability in this segment despite the seasonal shift.

Auction offerings totalled 39,048 bales this week, with the national pass-in rate steady at  7.02% as growers resisted the easing market. Sydney’s pass-in rate was notably lower than in other centres at 5.4%.

This week in Mecardo, Andrew Woods (see article here) analysed the factors driving Wool’s recent winning streak. He attributed the gains to a weaker Australian dollar against the US dollar since September. While noting an increase in the supply of 17-micron-and-finer wool this season, he highlighted a decline in 18-micron-and-broader volumes, which has pushed broader Merino prices higher since spring.

Next week

Next week’s wool sales will see all centres operating on Tuesday and Wednesday, with a total of 41,492 bales expected to be offered.

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Data sources: AWEX, AWI, Mecardo

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