The AWEX EMI closed on 1,290c at auction sales in Australia, posting a fall of 13c for the week.
Selling wool in a week that saw the world blindsided by the US presidential election, posed new challenges.
As the market opened on Wednesday, and the heavily backed candidate hopes turned sour, as the polls revealed an eminent swing towards Donald Trump and his eventual victory later in the day.
On the same day the AUD currency exchange plummeted 1.8c before slowly regaining later that night and the following day; the Australian stock market posted substantial losses with the shock election result as was experienced around the world.
Like downward currency and the Stocks reaction, the EMI lost 20c on Wednesday before recovering on Thursday, resulting in roughly half of these losses at the close.
I suggest we consider recording the 9th of November as the day the wool market was “Trumped” and hopefully as we move through November the market will regain some of the confidence lost in the blink of an eye.
Another contributing factor spoken about in the past few weeks is the quantity, and after last week’s listing of over 50,000 bales, just 47,139 bales made it to the sale rooms.
Whilst this offering is the third largest for the season the impact of over 4% being withdrawn presale, and 8.7% being passed in may have contributed to Thursday’s reversal of the Trump day blues.
Merino Fleece types fell across the MPG range between 4 and 19c with the largest price pressure being felt on the inferior types. The Skirtings tracked the fleece types and Crossbreds moved lower once again.
Crossbreds have posted a string of poor performances relative to the Merino MPG’s and carding markets.
The 30 MPG has fallen 342c or 38% since September 2015 where it peaked just under 900c. Whilst wool is not the key profit driver for a prime lamb enterprises these massive adjustments may sway decisions in land usage in the future.
The Cardings also fell foul to the pressures of the week as well as weathering the largest carding offering in 2016, posting losses of 14-28c.
On the forward market front, bids evaporated early in the week as the participants watched the various markets react across the world.
Of course many exporters would have had a currency position against forward sales of wool and the violent swing in currency would have produced tears and laughter in the sale afternoon, as the world paused to contemplate the election result.
Forwards anticipated the support holding and finished the week well with bids around cash levels, a result of the positive tone of the closing market.
Next week’s offering of 50,031 bales signals the last of the larger offering for November with estimates of 43,000 and 44,000 bales to follow. The positive closing trend gives me hope that there will be a better week ahead.
-Marty Moses, Moses and Son, Temora