Diminishing sale offerings will exacerbate the issue of limited supply of superfine specialty types.
The AWEX EMI added 26c pushing into new EMI highs at Auction Sales in Australia last week.
The EMI now sits at 1546, continuing the frantic buyer activity on the superfine lots on offer.
It seems that the finer the micron, the better the price, which was a trend almost given up on by the industry until this recent 4 month surge in fine wool prices.
The best performances this week were in the 18.5 micron and finer categories, which posted from 60-100c gains for the week. The wool that fits the superfine specifications, that has been held in brokers’ stores, made up a percentage of the past months offering and I predict this week’s results may draw the remaining lots from this sacred wool vault.
In fact, as the fine wool is drawn to the market, coarse crossbred wool which has experienced an extremely large price fall over the past 6 months is slowly replacing the stocks held back from sale.
Diminishing sale offerings will exacerbate the issue of limited supply of superfine specialty types, so it’s hard to imagine the stand-still of the surge is between now and the end of March.
On the medium merino lots offered the story was less exciting, with a small rise posted for 20 & 21 MPG’s -however the closing trend in Fremantle (a few hours after the eastern markets had closed), showed a drop off in the buyer support with the 22 micron finishing the week 20c into negative territory.
The basis between the 18 and 21 MPG’s has pushed through the 700c barrier and poses the question of classing out a finer line in the merino clip as extremely commercial- yes you heard it- wool classers may get to exercise the fruits of their TAFE training- that is, of course, if they can remember how this is done.
Skirtings mirrored the fleece movements, whilst cardings prices inched ahead of the previous record highs posting 5-15 gains. The 25-26 crossbred types increased up to 30c for the week, whilst the coarser crossbreds remained unchanged. The crossbreds, cardings and medium Merino’s performance had the 1.5c upswing in the currency exchange, which may validate their detachment from the superfine and fine wool trend; however there were no complaints from the post-sale results today.
The 51,000 bale offering advertised for next week may be the last reasonable offering until mid-April, the week after the Easter break.
Hedging remained a great option for those spring and summer shearers who are becoming anxious about the market’s resilience to historic seasonal trends. ~ Marty Moses
Mike Avery Reports – Forward Marketing
A lighter volume week on the forwards, but interest levels are rising significantly as the cash market continues into uncharted territory. Forward prices followed the market up, with new highs for the spring. August 18.0 traded at 1950 and 19.0 at 1750, although, at a considerable discount to spot the outright prices are attractive, hedging level from an historical perspective.
Price action was mainly restricted to the spring and centred around 18.0 and 19.0 microns. All participants are anticipating a pull back. The timing and depth of the retracement is the key. Hopefully supply concerns will see any retracement short lived, and a base can be formed quickly. The challenge of predicting fair value is getting harder each week. Buyers are not seeing long term demand signals, as processors continue a just-in-time program at these levels. Better volumes in auction have buyers a little wary going into next week.
-Marty Moses, Moses & Son, Temora