AUSTRALIAN wool prices this week improved for the first time this season, in the first weekly rise since mid-June this year.

The Australian Wool Exchange said the price increases were heavily influenced by currency movement.

With Fremantle returning to the selling program and bolstering the national offering, 31,960 bales were offered and brokers passed-in 6.8 percent.

“With this being the last selling series for a month, buyer activity was robust.

“On the first selling day the benchmark AWEX Eastern Market Indicator rose by 4 cents,” AWEX said.

“The second selling day saw some large rises, particularly in the finer Merino fleece types, due in part to buyers taking this final opportunity to finish orders before the break.

“The individual Micron Price Guides (MPGs) for merino fleece added between 5 and 75 cents for the day.”

AWEX said the EMI gained 13 cents for the day, this was the largest daily rise in the EMI since April.

“The EMI closed the week at 1124 cents/kg clean, a weekly increase of 17 cents and the largest weekly rise in the EMI since Week 50.

“After not recording a rise for ten consecutive selling days, the EMI has now risen for the last three,” AWEX said.

“The 84-cent rise in the Northern 17-micron MPG was the largest weekly rise in any published MPG since December, when there was multiple three figure increases recorded.”

AWEX said currency movement played a large role in this week’s market movements, so much so that when viewed in US dollar terms the market lost ground.

“The EMI closed the week at US742 cents, a fall of US4 cents.”

European interest in best spec wools – AWI

Australian Wool Innovation trade consultant Scott Carmody said the last week of Australian wool auctions prior to the winter three-week recess has yielded some strong price gains in Australian dollar terms for grower sellers.

“Quite often the last sale before a significant recess produces some strong gains, which are more so based upon completion of outstanding orders and filling containers to the maximum.

“In somewhat an opportune moment for sellers, this week’s market also coincided with a significant drop in the value of the Australian dollar against all the major trading forex pairs,” he said.

“This aided the market holding and advancing whilst retaining a similarly sporadic demand scenario.

“It is invariably a better financial outcome for exporters and other buyers to pay above sale price and ruling market rates,” Mr Carmody said.

“The cost of holding wool locally over a month longer far exceeds the additional cents per kg paid in the sale room to get orders shipped.

“So some individual sale lots received some extraordinary gains above market rates and well above the pre-sale broker valuations provided to growers – a pleasing outcome in a tough year,” he said.

Mr Carmody said the best gains were at the finest end of the Merino sector, that spiked upwards of 65-80 cents.

“Some individual lots exhibiting the best of style strength and low VM (vegetable matter) readings sold far in excess of 100 cents above the average indicators.”

Mr Carmody said the largest European top maker exerted some buying intent within this segment, which forced all other competitors to up their ante as far as willingness to pay the spot price goes.

“The mid micron wools of 18 to 21micron all fetched a 20-30 cent gain for the week.

“With the WA market in Fremantle only selling on the first day on Tuesday, that centre failed to get the advantage of the final day push and the prices received were still positive and were in the range of 5 to 20ac better than the previous closing quotes.”

Mr Carmody said crossbred wools did not miss out on the end of season push as most of the wools sold 10-20 cents dearer.

“The broadest edge of broader than 30 micron was the exception by drifting slightly as that area continues to be affected by the lack of classing/preparation and type of wool, with the composite infusion difficult for buyers to place with any great confidence.”

Mr Carmody said China’s largest two top makers plus a strong indent dominated the Merino segment once again, but a smattering of European top making buying also assisted.

“The largest local exporter remained largely on the sideline, but the second largest trader and all other usual purchasers were active.”

The trade now heads into the annual three-week mid-year recess. Sales will resume in Week 8, beginning Monday the 19th of August.

Click here to see the latest AWEX Micron Price Guides.

Sources – AWEX, AWI.