WOOL growers responded to lower auction prices this week by almost doubling the percentage of bales their brokers passed in across the country.

The Australian Wool Exchange said after two successive auction series of rises, and three without an overall fall, the market retracted this week.

“The national offering fell below 40,000 bales, with 39,229 bales available to the trade, the smallest sale since the beginning of March,” AWEX said.

Brokers passed in 8.7pc of the bales, up 3.5pc on last week’s passed-in rate.

AWEX said the majority of the losses were felt on the first selling day.

“The individual Micron Price Guides (MPGs) for Merino fleece dropped by between 9 and 66 cents.

“These losses combined with overall weakness in the crossbreds, skirtings and cardings resulted in an 18-cent fall in the AWEX Eastern Market Indicator (EMI),” AWEX said.

“The second selling day the market settled.

“In the eastern centres, the prices on offer were generally within 10 cents of those achieved during the previous day.”

AWEX said a stronger crossbred market – for 26-30 micron fleece wool — helped to minimise the downward movement of the EMI, that dropped by 2 cents for the day.

The EMI finished the week 20 cents lower, closing at 1152 cents/kg clean, a 1.8pc reduction.

“A weakened Australian dollar — the AUD lost 0.49 cents compared to the USD since last week — meant that the fall was larger in USD terms,” AWEX said.

“The EMI fell by US19 cents, finishing at US745 cents, a drop of 2.5pc.”

AWEX said in a positive sign for the following series, the market finished strongly in the west, with all Merino fleece MPGs recording positive movements (between 4 and 14 cents) to close out the series.

“Although a very similar amount has been offered this season — there have been 3940 fewer bales offered — compared to the previous season the total dollar amount sold is well down.

“There has been a total of $1902 million worth of wool sold this season, $167 million lower than the previous season,” AWEX said.

Fine and medium Merino wool most sought after – AWI

Australian Wool Innovation trade consultant Scott Carmody said the apparent urgency of buying of the last few sale weeks quickly dissipated upon opening.

“Buyer actions were very much subdued in comparison to the last few weeks, with the market largely reliant upon the larger exporters and manufacturers to soak up the quantity on offer,” he said.

“Since the close of selling the previous week, the major forex rate of AUD v USD had traded well into the mid-65s and above.

“This initiated a softening for prompt and close in demand for shipment and any chance of fresh orders for month out and beyond contracts quickly evaporated,” he said.

“Coinciding with the above was the completion of traders’ forward orders for April shipment.

“This allows exporters a few weeks of opportunistic buying for executing their next requirements which are their May shipments, hence purchasing pressure was released and the market price reacted negatively,” he said.

“As prices lowered, Chinese top makers and indent buyers increased buying.

“The fine and medium wool Merino sectors were again the most well-sought in a tougher environment for sellers,” Mr Carmody said.

“These wools were generally 5 cents cheaper at the broader end of 20.5 micron-plus and 20 cents cheaper for the 19 to 20.5 micron.

“The superfine Merino (<18.5u) were again hard to place and losses of 25 to 40 cents were commonplace,” he said.

“Crossbreds were slightly dearer with cardings and skirting types all 10/15 cents lower.”

Next week a similar size sale is expected. There are currently 41,475 bales on offer in Sydney, Melbourne and Fremantle.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.