Late surge, but wool prices finish lower

Sheep Central, October 31, 2014

Wool sales Landmark1 MelbourneWool prices finished lower this week, after a shaky start and a surge later in the week, AWEX senior market analyst Lionel Plunkett said.

Mr Plunkett said the AWEX-EMI closed seven cents below last week, on 1029c/kg, though the damage was lessened significantly by the rally on the final sale day.

The US$ EMI closed at 902c/kg, down five cents, with the Australian dollar trading at US87.65 cents, down 0.07 cents. The national pass-in rate this week was 14.5 percent.

Mr Plunkett said the strong finish to the week pushed the AWEX-EMI over the line so that it finished the month in positive territory.

“October posted a six cent increase this year in what is typically a fairly positive month.

“Over the past decade only three Octobers have closed in the red with six ahead and one unchanged”.

Sales open with NZ wool in Melbourne

Mr Plunkett said as with last sale, the market opened up on Tuesday to an NZ-only sale out of Melbourne.

“Indications for this catalogue were reasonably positive in the limited 18-and-broader microns but were less so in the ultrafine range where there was mixed results,” Mr Plunkett said.

“The irregularity proved a telling barometer for the following Australian-stored wool on Wednesday. “Prices were as much as 40 cents cheaper for the lower spec types (part-tender & high mid-break wool) in most microns.”

The better types eased 10-20 cents, with the discounting increasing over the course of the day, Mr Plunkett said, with the market making a strong turnaround on Thursday after a subdued start.

“Momentum increased over the day and saw the Wednesday losses recovered to a large degree.

“Melbourne and Fremantle, both of which suffered the largest falls on the previous day, rallied 10-20 cents,” he said.

Low mid-break types attracted the most support and continued to firm through to the close, with Merino skirtings following the lower-style fleece types down, finishing 20 cents cheaper. Merino cardings and crossbreds closed around five cents cheaper for the week.

Best style and strength fine wool in Sydney supported

Landmark’s risk manager-wool Anthony Boatman said the Sydney sale on Wednesday with fine wools with better style and strength specs maintaining support.

“While the lower styles and high mid‐breaks were again heavily discounted, easing up to 30c, and bringing the quoted indicators down by around 10 cents for the 19 micron and finer categories.

“Medium wools were also quoted softer, easing around 5 cents,” he said.

“Crossbred fleece recorded losses around 5-10 cents, as did locks, stains and crutchings.”

He said prices across the medium wools improved from Wednesdays closing levels in the better market on Thursday.

“The majority of categories picked up 1-5 cents, although the good offering of low mid‐break wools amongst the 19.5 micron categories saw these wools quoted up 16 cents higher.

“Crossbred categories mostly maintained their levels, while the oddments continued to drop a few cents.”

Melbourne market rebounds on Thursday

Mr Boatman said the Melbourne sales did not continue on with the positive closing sale of last week, instead opened with losses of around 10-15 cents across most of the Merino fleece offering.

“The 23 micron categories were worst-affected, with losses of over 20 centres recorded for the limited offering.

“Volumes of most other categories were quite high however, with over 13,000 bales offered for the day.”

Mr Boatman said crossbred fleece was also generally softer, easing around 5 cents, and oddments dropped 5-10 cents.

The market rebounded well on Thursday as fine through to broad wools gained around 15 cents across the board, and the 17.5-19.5 micron categories closing almost 20 cents higher, he said.

Crossbred fleece generally maintained similar levels to Wednesday, as did most oddment categories.

Fremantle prices recover on Thursday

A relatively small offering in Fremantle of less than 4000 bales on Wednesday did not assist the market, with reductions across the board, Mr Boatman said.

“Fine wools were least-affected, easing 5-10 cents, while the high proportion of high mid‐break wool sent the 19.5-21 micron categories down 20-25 cents.

“Other categories were down 10-15 cents.”

Mr Boatman said on Thursday, prices generally improved by 10-15 cents across most of the offering.

“The 18 micron categories did not improve on the previous day’s levels, however, the 20 micron categories were at the other end of the scale, recording gains of over 20 cents,” he said.

“Oddments remained soft throughout Thursday’s trade, with locks and crutching dropping a further 5-10 cents.

Sources: AWEX and Landmark.


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