Markets

Quality wool prices firm up despite currency movements

Sheep Central, December 11, 2015

Wool sales Landmark1 MelbourneWOOL prices sustained a stronger Australian dollar this week, with the AWEX Eastern Market Indicator lifting four cents to 1251c/kg clean.

In wool sales in Melbourne, Sydney and Fremantle, with the $A at US72.95 cents, and the EMI in US dollar terms up 1 cents to US913 cents, brokers passed in 7.1 percent of the 45,873 bales offered.

AWEX senior market analyst Lionel Plunkett said there were expectations of a season-high offering of almost 50,000 bales, but by the end of the week only 45,873 bales had been put before buyers.

“The series opened to a Melbourne-only roster on Tuesday consisting of a mixed selection including a Tasmanian catalogue, mainland Australian wool, and a selection of New Zealand types.

“It was a lacklustre start as buyers appeared to err on the side of caution and prices trended lower,” he said.

Mr Plunkett said the broader types were the most affected, easing 10-15 cents for a limited quantity, but the dip was short-lived, with prices rebounding on the following day before steadying off on Thursday.

“The renewed interest late in the week was mainly in the broader microns where their 20-cent rise took them above the levels from the previous sale.

“Also in demand were the better spec types, mainly those with low mid-breaks & high-strength readings which has been a common theme over the past few months,” he said.

Merino skirtings also received good support during the sale and generally closed ahead of the previous week.

Mr Plunkett said the largest crossbred selection since January generally closed the week 5-10 cents lower.

“A firm finish on Thursday managed to limit their losses following an unconvincing start to the sale.

“The Merino Carding Indicators paused this week on their march towards record highs; Sydney recorded the largest movement with an 8-cent dip.”

Stronger $A fails to derail market

Australian Wool Innovation’s weekly market report said a feature of this week for wool traders came largely from outside the sale room, as the major currencies used in the industry fluctuated wildly.

“The Euro was a standout mover, as the week on week comparisons showed a differential of over 4pc against the $A.

“Also, after trading at the low to mid .72s against the $US for the majority of the week, the $A strengthened dramatically on Thursday to be a full cent higher, but this higher dollar failed to derail the generally strong wool market as mostly forward sellers were active,” the report said.

The AWI report said not too much change is expected prior to the three-week recess for the Christmas period, but small price squeezes in specific types may occur as exporters fight to fill commitments.

The expected offering next week is 44,669 bales, including a near-capacity allocation of Skirtings, Crossbreds, & Oddments in the Melbourne sale, AWEX said.

Click here to see this week’s AWEX Micron Price Guides.

Sources: AWEX, AWI

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