Markets

Growers hold wool as dollar climbs and market indicator hits lowest level in six months

Sheep Central, April 22, 2016

Wool sales Landmark1 MelbourneWOOL prices fell for the second consecutive week this month, sending the AWEX Eastern Market Indicator to its lowest level in six months.

Wool brokers responded by passing in 15.2 percent of the 42,082 bales offered in Sydney, Melbourne and Fremantle – the highest pass-in rate in two years.

The EMI closed down 24 cents this week to 1217c/kg clean as the Australian dollar appreciated to US78.07 cents, putting the EMI in US$ terms at US950c/kg, down 1 cent.

AWEX senior market analyst Lionel Plunkett said the currency appeared to play a significant role with the Australian dollar jumping almost US1.5 cents over the past seven days and it hitting a ten-month high at 78.26 US cents midway through the sale.

“The sale opened up with a continuation of the trend from the previous week.

“Prices fell as much as 30 cents clean with a rout that was fairly consistent across the micron range, apart from superfine types in Melbourne which managed falls which were not as substantial,” he said.

“There was a firming bias over the course of the day which managed to limit the discounts and conveyed some positivity for the next day.”

Mr Plunkett said although there were mixed results on Thursday, the market generally flattened out.

“Melbourne still eased back slightly, but Sydney and Fremantle both registered increases for sections of the fleece catalogue.

“Rises of 5 cents were recorded, mainly on the back of solid support for the more stylish 40nkt types,” he said.

“The lower prices resulted in 10 percent of the catalogue being withdrawn prior to sale, the largest rate in two years.”

Mr Plunkett said Merino skirtings initially lost 20 cents before firming on the final day.

“Crossbreds continued to track lower, losing another 15 cents this week.

“In Sydney, the Merino Carding Indicator plunged 61 cents on the back of near-equal falls each day, while Melbourne and Fremantle were more moderate with a drop of 20 to 30 cents.”

National totals are set to hover around 40,000 bales for the next two weeks before dipping to 36,000 bales in three weeks’ time, Mr Plunkett said.

Source: AWEX

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