The AWEX Eastern Market Indicator fell another two cents to 1090c/kg, with the Australian dollar at US77.97 cents and the US-EMI up 14 cents to US850 cents.
AWEX senior market analyst Lionel Plunkett said an expected offering of almost 60,000 bales fell short by a considerable margin when 52,871 bales were eventually offered. Brokers pass-in 12.1 percent of the offering.
“Growers showed some reluctance to sell into the weakening market when 10pc of the catalogued total was withdrawn prior to sale, the highest in ten months,” Mr Plunkett said.
“A Melbourne-only sale on Tuesday continued the trend evident late in the previous week.
“The Micron Price Guides were all around 20 cents cheaper, mirroring the result of the previous Thursday.”
Strong support selected NZ types
However, Mr Plunkett said a stylish NZ catalogue demonstrated that strong support was still a reality for selected types.
“Spinners and exceptionally sound best style types all found good competition and sold to premiums over Australian wool.
“Prices levels tended to consolidate over the remainder of the week although mixed signals appeared on Thursday, the final sale day.”
Mr Plunkett said both east coast auction centres showed a firming attitude, especially in the medium-broader range where there was a lift of 10 cents, while Fremantle lost some ground late in the day at their small offering.
Merino skirtings had varied results, but generally added to last week’s increases with further gains at this sale, he said.
“Crossbreds continued to attract interest although the speed of their ascent has slowed in recent weeks.
“This sale there was generally a rise of 5 cents.”
Mr Plunkett said Merino cardings were also steadier this week after a strong rise last sale, closing with only slight movements.
“Less than 50,000 bales are forecast for next week with subsequent weeks expected to recede as we move towards autumn,” he said.
Tale of two markets – crossbreds and cardings
Fox and Lillie Rural technical and marketing manager Eamon Timms said selling wool at the moment was “a tale of two markets”.
“The crossbred and carding wools are in favour – demand is completely outstripping supply.
“There is enough interest around for the Merinos, but things are a little bit restricted because of Chinese New Year this week,” he said.
He said the market was soft at the start of the week, and dearer on Wednesday and again on Thursday.
“Given the volume of wool that is being thrown at the market it is quite a credible result.”
Mr Timms said the volume of wool creating cashflow issues for exporters was part of the reason the market slipped on Tuesday, though it found support by Wednesday.
“I think in a couple of weeks’ time, we will see the market improve a little bit and get some positive momentum.”
Melbourne market stabilised after slow start
Landmark wool risk manager Anthony Boatman said the wool market began the week with a continuation of the lower trend dominating the market over the past few sales.
However, it stabilised in later sales as buyer confidence returned to the auction rooms.
The AWEX EMI was quoted down 5 cents on Tuesday, then a further 2 cents on Wednesday, before picking up 5 cents on Thursday to close the week at 1090 cents.
“Melbourne sales opened on Tuesday on a negative tone with prices for the lower spec lots dropping by around 20 cents, pushing the fine through to medium micron categories down generally between 10-20 cents,” he said.
“The better style lots on offer were able to maintain support, and sold at similar levels to last weeks close.
“Crossbreds also maintained support, and remained unchanged, while the oddments eased back a few cents.”
He said sellers resisted the lower levels, with a 25 pc pass-in rate recorded.
Wednesday’s sale was more stable as levels were generally maintained across the board from Merino to crossbred fleece and prices were kept within around 5 cents of Tuesday’s levels, Mr Boatman said.
“Oddments sold well, picking up what was lost during the previous sale.”
On Thursday, market confidence returned and prices clawed back some of the losses.
“While gains were marginal, within 5 cents of Wednesday’s levels for the fine wools, the 19.5 and coarser categories sold at levels 10 cent higher than the previous day’s close,” he said.
Crossbreds and oddments sold unchanged to Wednesday’s prices
Sydney market followed Melbourne’s lead
Mr Boatman said the northern market opened on Wednesday and followed the lead of Melbourne’s opening sale.
“Prices for the 17.5 through to 19.5 micron wool dropped 10-20 cents and the finer categories were quoted down 25 cents.
“Medium wools were less affected, and were little changed in comparison to the fine wools.”
Mr Boatman said crossbred wools sold well, with gains for the 26 and 28 micron categories, and a mostly unchanged result for the broader lots. Oddments were firm to unchanged, he said.
“The market turned around on Thursday with gains of 5-10 cents across most of the Merino fleece catalogue.
“The better types were irregular. However, the lower spec lots found increased demand and pushed the indicators higher.”
Mr Boatman said prices for crossbred fleece wools also increased, with gains of around 5 cents recorded. Oddments remained mostly unchanged.
Fremantle’s 17.5-18.5 micron wool open firmer
Mr Boatman said in Fremantle, the 17.5 through to 18.5 micron wools sold firmer on limited numbers during Wednesday’s opening sale.
“The 19 micron and coarser categories however mostly sold cheaper, although within 5 cents of the previous week’s closing prices.
“Oddments sold well on a low offering, with locks and crutchings lifting 10-15 cents higher.”
He said the 18 micron lots handed back their gains on Thursday, losing 10 cents along with the 18.5 and 19 micron categories. The 19.5 and coarser sold softer to unchanged. Oddments eased back 10 cents.
Source: AWEX, Landmark, Fox and Lillie Rural