AUSTRALIA’S wool prices corrected this week, as a Western Australian offering of 4807 bales help lift national supply.
At the last auctions in Fremantle, Melbourne and Sydney this financial year, brokers offered 31,784 bales, 10,880 more than last week.
The AWEX Eastern Market Indicator fell 17 cents to 2056c/kg clean, and the pass-in rate more than doubled to 6.1 percent as some growers opted to hold wool until the next financial year. The EMI in $US fell 13 cents to US1513 cents/kg.
AWEX senior market analyst Lionel Plunkett said some of the heat left the market this week, after the large increases experienced over the previous few sales.
“The finer microns were the hardest hit in the softer market, resulting in 18.5 micron and finer generally falling by 20 to 40 cents.
“The 19.5 to 20 micron wools were less-affected and were 10 to 20 cents easier,” he said.
“A limited offering of 21.0 micron and coarser managed to record increases for the sale, generally 5 to 10 cents.
“These increases pushed the individual Micron Price Guide for 21 micron further into record territory in all three centres,” he said.
Mr Plunkett said it was worth noting that the Western region recorded general increases of 40-80 cents for the series, because they did not sell in the previous week, when large gains were recorded in the Eastern states’ markets.
Mr Plunkett said despite the small reduction in the EMI this week, the indicator has risen 531 cents for the season, an increase of nearly 35pc, and the is largest seasonal increase in the EMI since 2011.
“In the 2017/18 season, over 3.4 billion dollars’ worth of wool was sold to the trade.”
Crossbred wool also lost ground
Mr Plunkett said the crossbred sector also lost ground this week, generally between 5 and 20 cents, with the 30 micron and coarser wools least-affected.
A limited supply of oddments were generally 5 to 10 cents easier, he said.
Lack of forward contract buying softens market – AWI
Australian Wool Innovation’s weekly market report said for the third week in a row, the mills in China have generally been somewhat restrained in their purchasing and remained pretty well coy in their intent.
“The larger indent operator remains active, but the lack of any significant forward contract buying has pushed the market into a softer period for the time being.
“The more active players in the market were the large trading exporters who dominated the buying lists daily,” AWI said.
AWI said the markets this week may have been impacted to a slight degree by some gains in rostered quantities from the original forecasts.
“Last week 16pc of additional quantity was added to national rosters, which mostly occurred in the Sydney centre.
“This seemed to provide angst to some operators, but this situation has happened pretty consistently for years now.”
AWI said what is significant though this year is that, even with that additional quantity, Australia is offering 15.5pc less bales next week than at the same sale last year.
“In addition, the following week, which is the final sale prior to a three-week recess in sales, we also have 21.6pc less bales to be offered than the “Week 2” sales of July 2017.”
“Next week is the first week of the new selling season and is traditionally seen as a buying opportunity for exporters to complete outstanding contracts at more advantageous buy in levels.
“The larger volumes usually allow for more beneficial purchasing, but with comparatively lesser bales than normal to be auctioned, the chances are likely very slim this year for that to happen,” AWI said.
The first sale of the 2018/19 season is typically one of the larger sales, as sellers wanting to sell into the new financial year enter the market. Currently, there are 43,232 bales rostered for sale.
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