The AWEX EMI gave back half of its previous week’s gains closing on 2068c – a loss of 48c.
The market opened in Sydney and Melbourne on Tuesday and the weaker trend was in play instantly with one of the first fleece catalogues passing in 35% of their offering.
Buyers were grappling with a higher currency exchange and repenting for their over-zealous purchasing emotions from last week, however in the closing hours on Thursday, the market showed more positive signals and closed the price gap set the day before.
10.8% of the 29,691 bale offering was passed in as the price dropped which was a little more than what was expected by the sellers.
It has certainly become a challenge to predict what the price of wool is going to be from one week to the next.
Merino Fleece generally lost 60-90c with the finer, the high and medium VM lots being hit the hardest.
Skirtings lost 40-70c without any measurable favour to style or VM.
Merino Cardings remained largely unaffected with Sydney posting an 11c rise in their MCI whilst Melbourne losing 24c.
Crossbreds lost 15-25c to round out the week.
Forward Price Report from Michael Avery (Southern Aurora Wool): Forward volumes suffered this week as the market participants tried to digest the volatility of the opening three weeks of the new season.
The largest single day rise for more than a decade, set last week, had the logical effect of pushing buyers away as downstream processors were unable to comprehend the new levels.
The depth of the retraction is difficult to ascertain but significant volatility is likely to be with us for an extended period.
Opportunities will be there for growers to hedge as exporters look to minimise their exposure in these uncertain times.
Levels indicated by buyers where they see business may be contracted show an initial base forming around 2100 to 2150 for 19.0 micron and 2000 to 2050 for 21.0 as we move into the New Year.
Although a significant discount to the spot market it is still above the 95th percentile for prices (over the last ten years) indicating we have moved into a much improved price dynamic. Whether this can be sustained is the challenge.
This week, Fremantle returns to the fold adding to the 34,960 bales rostered for sale. This should continue to be met with interest to meet the demand we have seen for Australian Wool over the past 18 months. It is certainly a great time to be in sheep and wool.
-Marty Moses, Moses & Son