Markets

Wool prices fall, but good spec types hold their ground

Sheep Central, October 2, 2015

wool bales1WOOL prices drifted lower this week, with support strongest for better spec style and high tensile strength lines.

The AWEX Eastern Market Indicator closed down 11 cents to 1217c/kg clean. The EMI in US dollars was down 1 cent at 859 cents, with the Australian-US dollar exchange rate on US70.55 cents, up 0.54 cents. Brokers passed in 11.5 percent of the offering.

AWEX senior market analyst Lionel Plunkett said there was a weak lead-in at the beginning of selling this week, which generally flowed through into the remainder of the series resulting in modest losses of around 10 cents clean.

“However, there was an encouraging close when most of the 16.5 to 19.0 range gained 5 cents at the small Sydney-only catalogue on Thursday,” he said.

“Another promising sign over the three days was the support for the better types (Best style/40nkt) which continue to be favoured by buyers.

“The losses for these types were more restrained than the remainder of the fleece sector,” Mr Plunkett said.

He said lower spec types tended to underperform their corresponding Micron Price Guides, falling by as much as 20 to 30 cents.

“Sale lots with a combination of undesirable attributes, including high mid-break and low strength, incurred sizeable discounts.

“Overlong types (>100mm) were also increasingly marked down,” he said.

Merino skirtings were reasonably steady for the week with short/seedy types around 10 cents cheaper. Crossbreds tracked lower each day, finishing 20 to 30 cents lower, Mr Plunkett said.

“Merino cardings softened 5 cents for the sale.”

Mr Plunkett said two public holidays threw up an unusual sale schedule this week. Although all three selling centres were in operation on Wednesday, Melbourne and Sydney sold in isolation at different times; Melbourne early in the week and Sydney on Thursday.

The offering of 38,762 bales this week was in line with previous weeks, as bale totals oscillate between 33,000-39,000, Mr Plunkett said.

“Volumes have been well below last year, especially recently; the last four weeks were almost 13% lower than the corresponding period from last season.”

At 42,937 bales, week is forecast to be the largest sale since early July.

Source: AWEX.

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