AUSTRALIAN Merino wool prices continued to track downward this week in a continuing pattern of “two markets,” although crossbred lines bucked the trend, AWEX senior market analyst Lionel Plunkett said.
“One (market is) for the good style/higher yielding wools and one for the lesser style/lower yielding types,” he said.
“Due to the diminishing supply of the better wools, good style lots again attracted excellent buyer support, selling at levels very similar to those achieved at the previous sale.
“However, the inferior/lower yielding wools, were discounted as again buyers struggled to average them into their purchases,” Mr Plunkett said.
“The result of these discounts was overall reductions in the individual Micron Price Guides (MPGs) which in turn pushed the AWEX Eastern Market indicator lower for the fifth consecutive series.
“The EMI lost 16 cents, closing the week at 1947 cents a kg clean.”
The EMI in $US fell 21 cents to US1382 cents as the Australian dollars lost US0.48 cents to US70.97 cents. Brokers passed in 11.8 percent of the 37,405 bale offering, which was 5724 fewer than the previous week.
Mr Plunkett said due to seasonal conditions the amount of fleece wool yielding less than 60 percent dry continues to rise.
“AWEX compiled an analysis on yield going back to the 2002 season and the results highlighted some noteworthy facts.
“In previous drought years, the highest number of low yielding wools were found in mid-April, meaning these wools typically reach the market in Weeks 44 and 45,’ he said.
“This being the case, history shows us that the amount of low yielding wools will continue to rise over the next four weeks, continuing to put pressure on an already over supplied section of the market.”
Mr Plunkett said crossbred wools continue to defy the trend of the other sectors, again recording increases.
“Strong buyer activity helped to push prices up by 15 to 20 cents, the better prepared lines enjoying the largest increases.”
He said the oddments had another week of sharp falls, with the three indicators falling by an average of 36 cents. Quantities increase slightly next week, currently there are 38,212 bales rostered for sale in Sydney, Melbourne and Fremantle.
Click here for the latest AWEX Micron Price Guides.