CROSSBRED wool prices moved still higher in auctions this week, reflecting solid demand for lower-cost raw wool, according to Australian Wool Innovation.

Combined with positive movement in some fine wool Merino categories, the Australian Wool Exchange said the market has recorded an overall positive movement this week.

Brokers offered 29,844 bales, 139 more than last week, and 4 percent were passed in.

“With the stronger market over the previous few months bolstering the offering with wool coming from hold, the total amount of wool offered this season is tracking above the forecast figure,” AWEX said.

“Season to date there has been 1,390,723 bales offered, this is 46,516 below the previous season, a drop of just 3.2pc.”

AWEX said with all three centres operating on the first day, the market behaved erratically.

“Across the three regions, the movement in the Merino fleece Micron Price Guides (MPGs) ranged between plus 19 cents (18 micron MPG in Fremantle) and minus 17 cents (18.5 micron MPG in Sydney), but the movements were predominantly negative.

“In a similar pattern to the previous week, strength in the crossbred and carding sectors softened the blow to the benchmark Eastern Market Indicator (EMI) which fell by just 2 cents/kg clean.”

AWEX said due to currency movement the drop was larger in US dollars (USD), the US EMI dropped by US21 cents.

“On the second day of selling just Sydney and Melbourne were selling and the market adopted a much more positive tone.

“By days end, the movements in the merino fleece MPGs were between unchanged to plus 28 cents,” AWEX said.

“The EMI climbed by 6 cents, closing the week 4 cents higher at 1880 cents/kg clean.”

AWEX said the crossbred sector was by far the best performing of the series.

“This is best highlighted viewing the crossbred MPGs in the south, which added between 20 and 34 cents.
AWEX said the carding sector also had a positive week.

“General rises in the locks, stains and crutchings helped to push the three Merino Carding Indicators (MC) up by an average of 17 cents.”

Trade moving to a ‘partially covered’ state – AWI

Australian Wool Innovation said with the Western Market Indicator eased modestly by 3 cents to 2086 c/kg.

“While the AUD softened slightly during the week, historically it remains at relatively elevated levels, continuing to present headwinds for the wool trade in USD denominated returns, with the EMI falling by US21 cents and the WMI by US29 cents.

“The headline again this week was the continued strength in the crossbred and cardings sectors, which remained the best performing areas of the market.

“Across the southern and northern selling centres, crossbred Micron Price Guide percentile rankings are now sitting at or above the 99th percentile over the past five years, highlighting the elevated pricing levels currently being achieved in these categories,” AWI said.

“Strong competition for broader microns and carding types continues to reflect solid demand for lower-cost raw wool.”

AWI said the market remains broadly well supported; however, buying activity continues to operate within an increasingly selective environment.

“Industry sentiment suggests the trade has moved from a critically underbought position earlier in the year to a more partially covered state.

“Combined with the recent market strength, buyers are now placing greater emphasis on specification rather than overall volume,” AWI said.

“Price spreads between higher and lower specification wool are becoming increasingly evident as buyers place stronger premiums on well-presented and better specified lots, as they look to manage tightening trading margins.”

Next week’s offering is expected to fall to 27,334 bales, with Fremantle selling Tuesday and Melbourne and Sydney selling Tuesday-Wednesday.

Sources – AWEX, AWI.