Another large offering proved too much for the Merino market to handle without a loss this week. However, the market on balance remains higher than the average trading range of the December quarter.

The Eastern Market Indicator (EMI) lost 17¢ over the week to settle at 1196¢. As noted by AWEX, the first day of selling this week saw the EMI register the largest daily fall in five months. The AUD also took a turn this week, losing 1.7¢ to 65.52US¢. This dragged the EMI in USD terms down 4%.

In Fremantle losses in the range of 10-24¢ were felt across the Merino fleece sector. The Western Market Indicator declined 8¢ week on week to end at 1317¢/kg. This is 10% below the same time 12 months ago.

At the finer end of the market, 16.5 to 18MPG in Sydney declined 40-60¢/kg while results were more varied in Melbourne, with the 15.5MPG shedding a heavy 72¢ over the week. Losses were more tepid in Melbourne for the 20 to 22MPG, declining between 4 and 9¢/kg over the week. Looking at the 21MPG in USD terms shows us that the market continues to travel sideways within a trading range that it’s been floating in since 2021, clearly waiting for an improvement in economic news before breaking through.

While we are seeing that the crossbred price is constrained by limited expenditure increased volumes, there was a general lift across the market this week. 28 to 32MPG improved around 5-10¢. Cardings also held firm, with slight improvements in both Melbourne and Fremantle.

An offering of 49,905 bales was put to the market this week and with a pass-in rate of 7.9%, this saw 45,942 bales sold. The total number of bales sold over the first two weeks of 2024 amounts to 3% more than the same period in 2023. 

Next week

A reduced offering of 41,733 bales is registered for next week, with selling days on Tuesday and Wednesday in all centres. The smaller offering and cheaper AUD may be enough to stimulate some more demand in the week ahead.

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Data sources: AWEX, Mecardo

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