Whilst the fine and superfine wools seem to be floundering over the past few months, the 19.5µ and coarser FNF fleece have been notably sought after with the star performer being the 21 MPG which has risen 77c in 8 weeks.
This resurgence from the market for the medium merino is heavily weighted to the FNF types that fit the Chinese specifications. The week had a few surprises with the first being the First Republic Bank being seized by regulators on Monday.
This is the second largest bank failure in US history. The First Republic Bank promptly sold off all of its deposits and most of its assets to JP Morgan Chase bank in a bid to quell further turmoil.
This added increased pressure on the Australian mortgage holders with the RBA lifting the official cash rate on Tuesday for the 11th time in a year in an attempt to quell the elevated inflation rates. Considering these two fairly substantial factors, the wool market performed extremely well and it is thought that there is growing confidence amongst buying and the exporting sectors to acquire suitable inventory for the upcoming months.
| The AWEX EMI closed on 1310c – up 8c at auction sales in Australia this week. From the relatively small 38,838 bales offered, 89.4% cleared to the trade as most of the MPG’s held or increased in price for the week. Whilst the AUD was reported as gaining value, the unexpected announcement of another rise in the official cash interest rate from the RBA created some uncertainty in financial markets and there is a possibility that the announcement may have thwarted the wool market from performing to its true potential. Merino Fleece demonstrated price improvements on the FNF fleece types for the 18.5 µ and broader types whilst the 16.5-17.5µ MPG’s gave back a few cents. Over the past few week’s, quality of the offerings between the selling centres had created some disparity between the MPG’s, as the seasonal effect on the offering being the key detractor. One noticeable trend was seen where freshly shorn adult and weaner fleece lots were outshone in price by lots coming onto the market that were shorn last spring, displaying better specifications and lower VM. The competition came from the large exporters competing aggressively with the large Chinese Top Makers and indent operators. Merino Skirtings mimicked the fleece on lots displaying best style and specifications, and of course having low VM. Skirting types outside of these specifications were irregular, and at times cheaper. Crossbred combing wool held their ground this week despite the stronger AUD. Despite this, the pass in rates pushed well into the double digits with Sydney passing in 15.4% and Melbourne passing in 13.9% of the Crossbred offering. Once again, competition came from the largest Australian Exporters competing with the Chinese and European processors. |
| Merino Cardings continued their slow downward trend and were the only sector to perform poorly handing back 10c in Sydney, 8c in Melbourne and 9c in Fremantle.
This week’s offering estimate of 48,643 bales to be held on Tuesday and Wednesday. The slightly larger offerings should produce the continuation of better competition from all sectors on the better style and specified lots. ~ Marty Moses |