WOOL prices fell further this week, despite auctions finishing on a more positive note on Thursday.
The AWEX Eastern Market Indicator fell 13 cents to 1290c/kg clean, with brokers passing ion 8.7 percent of the 47,139 bale offering, the third largest of the season.
With the Australian dollar trading at US76.68 cent, the EMI in US dollar terms fell 9 cents to US989 cents.
AWEX senior market analyst Lionel Plunkett said as the USA election was followed by volatility in stock, currency and bond markets, perhaps coincidentally the wool market was also characterised by variable movements.
The AWEX EMI initially dipped 20 cents, before recovering 7 cents on Thursday to close a net 13 cents lower for the week.
“The increase on the final day was the first rise in the EMI in six consecutive trading days,”Mr Plunkett said.
“Prices fell heavily on the first day, with some inferior types dropping by as much as 60 cents. “Generally however most fleece types were discounted by between 20 and 30 cents.”
Mr Plunkett said the second day of selling had a dramatically different tone, with buyer interest increasing and the fall in prices halted.
“Most types and descriptions were generally 10 to 20 cents dearer, including the average/inferior types.”
Buyer interest in crossbreds continues to diminish and they tracked lower again, with some microns losing between 20 and 30 cents for some microns, he said. In the last 14 months, the 30 Micron Price Guide has fallen 38pc.
Mr Plunkett said the skirting market tracked the fleece market, down 20 to 30 cents on the first day and then 15 to 20 cents dearer on the second. With 19.0 micron and finer enjoying the largest gains on day two, he said
“A large selection of oddments around the country made it the largest offering since January.
“It was the only sector to fall over the two selling days, with most types and descriptions generally losing 15 to 20 cents compared to the previous sale.”
Next week about 50,000 bales are rostered for sale in Melbourne, Sydney and Fremantle.
Southern Aurora Wool reports risk is on the table
The forward market started the week surprisingly well following falls of around 40 cents in most qualities the previous session. 21 microns traded good volumes for late November and December at just under cash at 1360 cents. With the world’s attention focused on the US elections, risk was definitely on the table. Financials, commodities and the $A all suffered as news of a likely Trump victory came through. The wool auction was already under pressure and gave up a further 20 cents to settle on the key support level of 1350 cents with concerns that the seasonally supply flush could test 1350 cents. Forwards anticipated the support holding and finished the week well bid around those levels and the auction closed with a positive tone.
Next week’s auction will be pivotal to medium term price action in the forwards. The support level broke last spring and saw prices retract to 1214 before returning to hold the 1300 to 1400 throughout the New Year. Interest in options continued with 1340 strike options being offered at 38 cent for the early autumn.
Nov 21 micron 1360 10 tonnes
Dec 21 micron 1360 47 tonnes
Feb 21 micron 1357 2.5 tonnes
April 19 micron 1490 5 tonnes
Total 64.5 tonnes
Click here for the latest AWEX Mincron Price Guides.
Sources: AWEX, Southern Aurora Wool.