Wool Market Reports

Wool prices improve for smallest seasonal auction offering

Sheep Central, May 31, 2024

WOOL prices improved  in all categories at Australian auctions this week for what was the smallest offering this season.

The Australian Wool Exchange said after 4.7 percent of the original offering was withdrawn prior to sale, there were just 31,383 bales left available to the trade.

“This was the smallest sale of the season and the smallest since Week 51 (June) last year,” AWEX said.

Brokers passed in another 5.3 percent of the offering during the week.

“With minimal currency movement — the Australian dollar lost 0.16 cents compared to the US dollar since last week’s close — the price increases were driven more by increased buyer demand.

“The main buyer interest continued to focus on good/best style wools with favourable additional measurement results,” AWEX said.

“However, due to the limited offering most Merino fleece types generally sold at slightly higher levels than in the previous series.

“Across the country, the movements in the individual Micron Price Guides (MPGs) for Merino fleece ranged by between minus 2 and plus 26 cents.”

AWEX said the Merino skirtings tracked a similar path to the fleece, with small improvements generally recorded.

“The crossbred sector had a solid series, with all MPGs recording increases, ranging between 5 and 22 cents.”

AWEX said the highlight was the 26 micron MPG in the south that added 22 cents for the week, equating to a 4.2pc rise.

“The oddments had a relatively unchanged week, and the three Merino carding indicators (MC) rose by an average of 1 cent, helped by a 5-cent rise in the western region,” AWEX said.\

The AWEX Eastern Market Indicator (EMI) climbed by 7 cents for the series, closing the week at 1137 cents/kg clean.

Some positive change in buying sentiment – AWI

Some signs of positive change to sentiment were seen at this week’s Australian wool auctions, Australian Wool Innovation trade consultant Scott Carmody said.

“All types on offer came under increased buying pressure with the major local traders heading back to dominance on the auction purchasing lists.

“All buying sectors were involved, with the atmosphere in sale rooms more buoyant than seen for the last month or so,” he said.

Mr Carmody said slightly better foreign exchange (forex) rates definitely assisted the improved price returns for growers, but also playing on manufacturers decision making would be the lower volumes being offered.

“The next three weeks will see the average sale week down to less than 30,000 bales per week, with the Western Australian wool selling centre at Fremantle not offering next week (week49) and also sitting out Week 51 due to volumes not being sufficient enough to hold a commercial sale.

“Additionally, the Merino wool types being offered are very diverse, with quite a few clips in the 18.5 to 21 micron range containing heavier (2.5-5pc-plus) vegetable matter (VM) levels,” he said.

“This allows top makers and traders the ability to buy or trade away from the mainstream types to look for value.

“These heavier VM clips are finding good support at the moment, as the type of VM within the fleeces is considered relatively easily combed,” Mr Carmody said.

“This is not only lessening the percentage of the weekly supply of 0.1-2pc VM of sale lots, but placing upward price pressure on these lower VM clips.

“The standard and most common type contracts emanating from China are still requiring VM levels to average 1pc for fleece types,” he said.

“The main volume customers from India are also requiring similarly specified 1pc VM levels to be hit for completed orders.”

Mr Carmody said within the Merino fleece sector, the general price gains were to the order of 10 to 20 cents/kg clean.

“Of note though was the emergence of premiums being added onto the better specified and more stylish superfine (less than 19micron) sale lots traditionally suited to the European market.

“The few lots offered this week were selling around 140ac clean/kg above the normal run of the mill types.”

Fremantle will not hold an auction next week and the national offering is forecast to fall below 30,000 bales. There are currently 27,499 bales expected to be on offer in Sydney and Melbourne. AWEX said even If this full quantity is realised it will be the smallest sale since September 2020 (Week 13), where interestingly, in this very small sale the Merino fleece MPGs added between 94 and 185 cents for the series.

Sources – AWEX, AWI.

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