Merino fleeces 40-80c/kg dearer at auction

Wool-bales

Crossbreds (after a terrible result last week) added 40-60c with poorly prepared lots attracting noticeably large discounts.

The AWEX EMI closed at 1887c – up 54c at auction sales in Australia last week.

The 28,273 bale offering immediately opened with new vigour after the alarming falls experienced over the past 3 weeks of sales in Australia.

The renewed interest became more widespread as the week progressed, however the meagre offerings outlook coupled with a new appetite for all wool types resulted in a solid recovery adding about 1/3 of the 159c lots over the past three weeks.

Merino Fleece were generally 40-80c dearer with some isolated best style and well specified lots adding over 100c for the week.

Skirtings followed the fleece by adding 40-60c across the entire range.

Crossbreds (after a terrible result last week) added 40-60c with poorly prepared lots attracting noticeably large discounts.

Cardings also enjoyed the benefit of the new price trend, posting a smaller but much needed 10-30c gain.

Forward Price Report from Michael Avery (Southern Aurora Wool): The positive week in the wool auctions saw better participation in the forwards. Activity was restricted to the 21.0 micron index with maturities spread from August to December.

A total of 77t (approx. 620 bales) traded with prices ranging from 2165 cents in August to 2050 in December.

These levels represent fair value considering the 21 micron traded down to 2133 last week. Although below the peak spring hedging levels achieved in February this year that ranged between 2100 and 2150 a price level of 2050 is in the 75 percentile band for the last 4 years.

Volatility will likely be our bed partner for the remainder of the season. Currently running at over 14% the balance of low supply and sporadic demand will see marked fluctuations in prices over the coming weeks.

This should give growers opportunities to set attractive forward levels.
To date, less than 1 percent of the volume anticipated to go through auction in the July to December period has been hedged forward. In the current high risk environment, it is an issue for the wellbeing of the whole pipeline to address.

Commentary: It’s quite extraordinary that, at the flick of a switch, the market is back. Despite what the MPG’s say, we received more money this week than the pass in price of a fortnight ago which indicates the magnitude of the lack of confidence over the past three weeks.

I think all buyers and sellers shared the elation generated across the industry when the recovery was signalled sometime on Wednesday afternoon.

With many parts of the state still firmly embedded in drought and heading into winter feeding full rations, the balance between supply and demand may be tested. My prediction is for more positive prices for a few weeks yet.

-Marty Moses, Moses & Son

UPCOMING SALES / EVENTS
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