Following last week’s strong market it was expected that sale volumes would increase, and while this week’s offering remainedinline with previous forecasts next week’s volumes have risen significantly with 49,078 bales currently rostered for sale (an increase of 11,000 bales).
This sudden jump in volume coupled with a jump in the AUD spooked the trade from the outset, resulting in a quick pull-back with most micron price guides losing much of the gains made the previous week.
Thursday’s market did however improve later in the day as buyers became increasingly interested at the discounted levels.
Some positive signs emerged at the finer end, with the better types finding good support despite a slight reduction in lesser types of the same micron.
Overall merino skirtings were less affected by the weaker market with prices easing gradually each day, closing around 20 cents lower for the sale (approximately half the amount of their fleece counterparts).
The crossbred market was irregular with some microns marginally lower while others fell 30 cents.
Merino Cardings eased 15 cents, although a strong finish in Fremantle late on Thursday hinted at renewed interest”.
Despite the signs of improvement late in the week, next week’s market could still struggle under the weight of the larger offering, however with a supply shortage looming buyers may also take the opportunity to buy some stock.
Once we get past the additional volume, it is expected that prices should stabilise as demand is expected to remain good over the next few months with volumes of stock being ‘below normal’ throughoutthe processing pipeline.
Low wool production will also help provide a strong base for wool prices, with recent production forecasts showing a 7% declin ein production for this season (15/16) with a further reduction of 0.6% expected in the 16/17 season.