MERINO fleece prices regained some lost ground in auctions this week, but crossbred wool values slipped.

The Australian Wool Exchange said the market recorded a modest overall rise this week, ending its run of losses.

Brokers offered 26,325 bales nationally, 3171 bales fewer than last week, and 6.9 percent were passed in.

AWEX said there was an unusual selling pattern this series, due to a public holiday in Sydney, pushing their selling days to Wednesday and Thursday. Fremantle and Melbourne sold on the Tuesday, and Melbourne and Sydney sold on the Wednesday. Then Sydney had a standalone sale on the Thursday.

“On day one, the benchmark Eastern Market Indicator (EMI) gained 2 cents, ending its seven selling day run of losses.

“This was driven by general price increases in the Southern Micron Price Guides (MPGs), particularly in the finer microns,” AWEX said.

“On day two, the EMI lost 5 cents for the day, this time driven by losses in the finer microns in the north, with the northern indicator falling by 8 cents for the day.”

On day three with just Sydney in operation, AWEX said the market rose, and the Merino fleece MPGs added between 8 and 36 cents. The northern indicator rose by 11 cents, this rise pushed the EMI up 4 cents, AWEX said.

“This rise was enough to put the EMI into positive territory for the week.

“The EMI closed 1 cent higher at 1820 cents/kg c;lean.”

AWEX said the medium to broad Merino microns have lost more ground in recent weeks compared to the finer microns.

“This can be best explained by comparing the 18 and 21 micron MPGs in the southern region.

“After the first sale of the calendar year, the 18 MPG was 2157 cents while the 21 MPG was 1958 cents, a difference of 199 cents,” AWEX said.

“At the completion of this series the 18 MPG was 2505 cents while the 21 MPG was 1854 cents, a difference of 651 cents.”

Next week’s offering is forecast rise. There is currently expected to be 35,096 bales on offer nationally.

Chinese processor participation increased – AWI

Australian Wool Innovations said the market found some stability this week, as reduced supply and improving competition encouraged some buyers who had been sitting on the sidelines to re-enter the market.

AWI said currency movements had little influence on price discovery, with the Australian dollar and Chinese yuan largely unchanged.

AWI reported that Chinese processor participation increased progressively across the selling period, with some buyers reporting them needing wool to ship to fulfil current top orders, and not stock. “This helped narrow the competitive gap with traders and provided additional support to the market.

“Traders are reporting larger enquiries and conversion to forward contracts for the standard or straight China types and that seems to be reflected in the strength at the close of selling.”

AWI said underlying wool supply remains tight.

“Australian-sourced offerings are 12.2pc below last season, while first-hand offerings are down 13.5pc.”

AWI said the larger offering next week will provide an important test of whether the late-week improvement in demand can be sustained, particularly in the finer Merino categories.

Sources – AWEX, AWI.