MOST Australian wool prices held relatively firm this week despite a higher $A-US exchange rate, as buyers secured supplies before the annual three-week recess.
AWEX senior market analyst Lionel Plunkett said the Merino fleece market performed very solidly and the benchmark Eastern Market Indicator recorded a slight fall for the week of 2 cents, closing at 1522c/kg clean.
Four weeks ago, about 35,000 bales were rostered for this week’s sales, but this increased, mainly with more wool (about 6000 bales) catalogued in Melbourne, although unseasonal dry weather, particularly in Western Australia, has led to many growers bringing their shearing program forward.
Brokers passed in 7.7 percent of the 46,463 bales offered. The value of wool sold this week was $73.22 million and a bale of 185kg 19 micron fleece was valued at $2206.
The number of bales and percentage offered in the NWD categories was: non-mulesed 3017 bales (6.5pc), ceased mulesing 716 (1.5pc), pain relief 9193 bales (19.8pc), with 33,537 bales (72.2pc) coming from mulesed sheep.
Mr Plunkett said due to the strengthening of the Australian dollar in $US terms, the EMI managed a healthy lift of 15 cents.
“Main competition was in the 17.5 micron and finer range and the 21 micron and broader range, generally pushing these types up by 10 to 20 cents.”
He said the skirting market had a very solid week.
“Generally, all types and descriptions sold at levels above those achieved last week, with buyer focus centred on the lower vegetable matter content lots or wools with excellent additional measurement results.”
Mr Plunkett said the crossbred sector will head into the break on a high note also.
“The entire crossbred micron range enjoyed general rises of between 10 and 20 cents.
“Once again it was the better prepared lines that attracted the strongest competition and hence the greatest price increases,” he said.
“However, this sale saw strong competition on the lesser style lots as buyers fought to secure quantity before the recess.”
The oddment market was the only sector of the market to suffer large corrections this week, he said.
“All types and descriptions experienced losses of generally 15 to 30 cents.
“This resulted in the carding indicators falling by an average of over 18 cents.”
Buyers keen, but price sensitive
Australian Wool Innovation’s weekly market report said the selling week commenced with buyers set to be much keener in their approach to purchasing, but still very much price sensitive.
“Most of the fresh demand appeared to be on all Merino fleece types broader than 19 micron and all Merino skirtings and crossbreds.
“The large availability of Merino fleece finer than 19 micron had buyers very wary and the carding sector looked to be in a lull,” AWI said.
“The much stronger AUD against the $US by around 1.5pc probably took a bit of impetus from the local market, as did the relatively large offering of over 46,000 bales, but the underlying strength of demand was the underwriting factor to the firm market results.”
AWI said the major buyers of last week continued their purchasing operations in mostly similar patterns to last week.
“The largest local trader/exporter and the largest Chinese indent buyer set the pace and others basically fell into line behind them just picking away at the offering only.
“As Fremantle joined in to selling though, another large local exporter exerted strength into the better types of the Merino market and completely swamped other orders in the market,” AWI said.
“This strength continued into the final day and saw a strengthening on most types as other traders pushed to complete outstanding positions.”
AWI said top makers were also far more active this week and this took care of the sale lots containing higher vm and wool descriptions of “off standard” described types.
“Their stronger activities was also responsible for the dearer (+10 to 20) Merino skirting market, as they looked for machinery fodder as the immediate global supply of wool in general goes into hiatus for at least a month as Australia and South Africa remain in sale recess mode.”
AWI said current overseas buying appears to be very much in tune with the Australian market.
“In the past, more often than not small sales would be attacked and prices rise to only see a fall in levels as volumes return or larger than expected volumes are offered without much notice.
“Accurate forecasting of volumes to our customers is vital and that can only help a stable market, and at these levels, most participants should be reasonably satisfied to see the volatility eliminated somewhat.”
Auction sales resume in the week beginning August 7 in Melbourne, Sydney and Fremantle.
Click here for the latest AWEX Micron Price Guides.
Sources: AWEX, AWI.