Buyer sentiment changes as Merino and crossbred wool posts solid rises

The lower volumes on offer coupled with some short term covering may present an opportunity for producers to sell into a more positive market in the short term.

The market posted solid rises across the Merino and Crossbred MPG’s however it was the merino 17.5-22μ MPG’s that were the big improvers.

There was a noticeable change in buyer sentiment in the rooms as competition increased from the large Australian traders who pushed the Chinese processors and Indent operators on a wider range of lots.

The AWEX EMI closed on 1271c – up 36c at auction sales in Australia this week.
The welcome correction in the EMI signalled the first weekly price increase in 3 months and the first rise in the EMI for 6 weeks.

The combination of a 2.86c fall in the AUD/USD exchange (a 32 month low) coupled with the smaller weekly offering, pushed the clearance rate to 95.2% of the 32,107 bale offering.
Merino Fleece experienced strong competition in 17.5 and broader on Tuesday with the solid demand pushing prices up 20-30c for the day. Due to the predominantly higher VM offering, gains for the 19.5 micron and coarser were slightly less in Sydney than the FNF Melbourne selection. Wednesday’s experience was a continuation of the positive trend, however the rises on the finer end slowed slightly whilst the medium and strong lots continued their upward push. Better style and specified lots were keenly sought after.

Crossbred experienced a solid opening supported by an increase in competition from its historic low price base with some positive price movements on well prepared and suitable specified wools in 26-30 micron range.

Merino Cardings posted mixed results over the three selling centres averaging a 1c rise nationally. Sydney posted an 8c rise whilst Melbourne was 1c cheaper and Fremantle gave back 6c for the week.

Crossbred oddments attracted increased competition in selected lots, remembering the large percentage of the coarser end of the Crossbred oddments are barely covering the selling costs.
This week there is expected to be 37,122 bales on offer in Fremantle, Melbourne and Sydney. Bidders returned to the forward contracts with small quantities trading at close to cash in the near months.

Whilst the global economies struggle with post Covid-19 inflation, the situation remains negative for discretionary spending in general which will suppress wool prices for the short term.

For this week, I believe the lower volumes on offer coupled with some short term covering may present an opportunity for producers to sell into a more positive market in the short term.

~ Marty Moses, Moses and Son