AUSTRALIAN wool prices held generally firm in the face of the largest weekly offering this year, apart from losses in the finer micron categories.
The Australian Wool Exchange said the market opened the 2021/22 selling season solidly, with minimal overall price movements across the larger than normal offering.
Nationally, 51,260 bales were offered, bolstered in part by sellers wanting to offer in the new financial year and brokers passed in 12.6 percent.
“This was the largest amount offered this calendar year and significantly more (66.3pc) than the first sale of the previous season, when only 30,821 bales were offered.
“On the opening selling day of the season, buyers adopted a cautious approach and as a result the market generally softened,” AWEX said.
“The movements in the individual Micron Price Guides (MPGs) across the country ranged between +9 and -45 cents.
“The AWEX Eastern Market Indicator (EMI) lost 14 cents for the day.”
AWEX said the Western region sold last and showed signs of improvement late in the day.
“This stronger buyer sentiment carried into the second day, where the Micron Price Guides ranged between -6 and +21 cents and the EMI added 4 cents.
“On the final day, with only Melbourne in operation, the market continued to strengthen overall, with the EMI adding a further 7 cents,” AWEX said.
“The EMI closed the week at 1420 cents/kg clean, a minimal 3-cent drop.”
12.8 micron line tops sale at 8100c/kg
AWEX said when compared to the opening sale of the previous season — which concluded a week earlier on the 2nd of July — the EMI has added 304 cents, an increase of 27.2pc.
“Although this was the first sale of the season, there has already been a high price of note.
“On Tuesday, a line of 12.8 micron Merino fleece wool, sold for 8100 cents/kg greasy.
“This was the highest price seen at auction in over three years,” AWEX said.
Competition and global demand handles volume – AWI
Australian Wool Innovation trade consultant Scott Carmody said the first week of the new season heralded in some highly surprising sale results at the Australian wool auctions.
“Comparing the opening and closing price levels it appeared largely to be a week of inaction rather than action.
“The final result though was mostly unpredicted with many pre-sale thoughts centring around what magnitude of market losses were expected rather than the resilience of price levels,” he said.
“Heavy auction volumes had given rise to the initial negativity from auction buyers, but competition and global demand was able to handle the volume presented this week.
“Subsequently there was 12.6pc of the offering that failed to meet the price expectations of grower sellers,” he said.
“The higher percentages of wool held onto by growers this week was mainly in the skirtings and crossbred brackets.
“The largest offering was in Melbourne and that centre posted the lowest passed-in rates by some margin, a somewhat unusual situation,” Mr Carmody said.
Mr Carmody said the first two sales of this season will provide more than 100,000 bales for buyers before the annual three-week recess.
“Last season that figure was 66,000 bales offered and well below normal quantities for weeks 1 and 2.
“However, this is not an equitable comparison due to effects of low COVID-influenced workplace operations and relatively unattractive prices being offered 12 months ago.”
Mr Carmody said all wool prices weakened on the first day of selling, but the 10-25c/kg clean lower levels provided the auction rooms with more confidence rather than feeding the negativity.
“The second day bore this out as the initial price consolidation theme was followed by good gains on the better wools.
“The final day of selling though appeared to push the price trend upward as Melbourne sold solo to some very strong competition and interest,” he said.
“Exporting traders were largely dominant, but the largest Chinese top maker was keen to absorb mainly Merino fleece and provided the strongest of bidding competition.
“Chinese indents and European top making took the majority of the crossbred sector, and the largest cardings manufacturer assumed their usual spot at the top of the oddments lists,” Mr Carmody said.
Next week is the final sale before the annual three-week mid-year recess. As this is the last selling opportunity at auction for nearly a month, quantities remain high, with 51,327 bales currently expected to be offered nationally.
Click here to see the latest AWEX Micron Price Guides.
Sources – AWEX and AWI.