MERINO wool prices rebounded at auctions this this week, but crossbred fleece values slipped lower.

With the increases in Merino prices, including for previously discounted types, the AWEX Eastern Market Indicator lifted 28 cents to 1550c/kg clean.

Brokers passed in 3.6 percent of the 38,217-bale offering as strong buyer competition helped push the market back into positive territory. The EMI in US$ terms lifted 23 cents to US1214c/kg clean.

AWEX said most types and descriptions gained 10 to 30 cents on the first day of selling this week.

“As in recent weeks, wools exhibiting favourable additional measurements results, attracted significant premiums, but lesser style and spec wools also felt the effect of the rising market as buyers fought hard for quantity.

AWEX said buyer competition was also intense on the second day as they attempted to secure their share of the quickly rising market.

“Some price increases were extreme, but in general terms the rise in price was 20 to 30 cents.

“The EMI added a further 15 cents to the previous day’s rise, closing the week at 1550 cents, an overall increase of 28 cents for the week.”

AWEX said the skirting market followed a very similar path to the fleece, prices rising over both selling days, resulting in general increases of 20 to 50 cents for the week, again lower vm wools under the most buying pressure.

The crossbreds were the only sector to not record gains this week. These wools lost further ground after recent losses, 25-30 micron wools all lost ground, generally, 10 to 20 cents.

AWEX said the oddment market continued its upward trend of the previous few sales. This week, another limited selection again attracted excellent support, resulting in the three carding indicators posting an average increase of 16 cents.

US dollar advantage lost this week – AWI

Australian Wool Innovation’s weekly market report said the currency advantage gained by those buying in US dollars) last week was short-lived as the 2pc gain was counterbalanced this week with the US$ EMI lifting by the exact amount and closing at 1214c/kg clean.

“The US$ v A$ foreign exchange rates barely moved (just 0.24pc higher) on a week to week basis so stronger interest was the key factor in the market and it was mainly Chinese (US$ user) orders that drove the market along.

“The results of the Merino sector surprised many as Chinese wool interests were officially on their National Holiday week from October 1 and were not expected to return until Monday October 9,” the report said.

“Buyers were initially looking to this selling week to tidy up a few outstanding orders, but as the sales progressed, fresh enquiry from the Chinese who were perhaps not entirely committed to a holiday enabled some advantageous new business to be written.

“The volumes required for relatively prompt shipment outstripped the willingness of forward selling exporters to take on further risk and so the indent operators stepped into the market operating on buy orders from the Chinese users unable to get price set from their suppliers,” AWI said.

“The week’s results showed how reactive today’s wool markets are to any change in sentiment, however small.

“The introduction of just a few new containers (108 bales each) of orders of the same or similar type into the market can change things up, and the usual consequence is a 20 or 30 cent rise almost immediately transferred into the sale rooms,” AWI said.

“The same can be said when individual types enquiry and orders dry up momentarily and falls of similar magnitude will result.

“For wool growers selling on a fortnightly to monthly comparative basis, the market now appears to be in a general 60ac swing from high to low. Whether this is a reliable trend or pattern is too early to tell.”

AWI said sale lots exhibiting high PobM (position of break middle) tender (less than 23N/kt) and high CVH (55pc +) super fine wools had the strongest of gains this week.

“For those lots finer than 17.5 micron many verged on being 80 cent dearer for the week.

“In general terms, the market on all Merino wools, both fleece and skirtings, gained between 40 and 60 cents.”

Cardings continued their month-long strengthening and added a further 20ac, whilst crossbreds languished and fell away a further 10 to 15ac.

AWI said most of Australia is still suffering from extremely dry conditions, with virtually no rain falling across the wool-growing districts the past week.

“As of this week we have sold 36,000 bales (A$75 million value) more than this time last year.

“With production forecast to remain same as last year, it is inevitable that at some stage volumes hitting the market will dwindle and that is likely to occur sooner rather than later.”

AWI said although about 40,000 bales will be offered next week, strong market signals are in play, highly competitive auction sales were expected.

Click here for the latest AWEX Micron Price Guides.

Sources: AWI, AWEX.