Wool growers check supply as auction prices dip - Financial Daily News Site

Wool growers check supply as auction prices dip

Dubbo broker Don Macdonald selling wool. 1024x301 1

 

 

 

 

 

AUSTRALIAN wool growers reacted quickly to a downward movement in auction prices this week, lifting the national bale passed-in rate.

With the benchmark AWEX Eastern Market Indicator closing 14 cents lower at 1420c/kg clean, brokers passed in 14 percent (up 3.7pc) of the 45,059-bale offering, up 3288 bales on last week.

Australian Wool Innovation trade consultant Scott Carmody said this non-acceptance of the current spot prices was heavily accentuated by the relatively high passed-in rate of 19.6pc of Merino fleece in Western Australia and the national crossbred wool type selection failing to clear 24.9pc of bales offered.

Noticeably almost 34pc of the crossbred wool type offered in Sydney failed to meet the grower reserves, Mr Carmody said.

The Australian Wool Exchange said after a month of continuous rises, the wool market retracted this week, mainly driven by falls in Merino fleece types.

“With only five selling weeks left in the current season, the total amount offered continues to track well above last year.

“Compared to the corresponding sale of last season there has been 140,070 more bales put through the auction system, an increase of 9.1pc,” AWEX said.

“With low vegetable matter (vm) types in increasingly short supply — this week only 37.4pc of the fleece selection was less than 1pc vm – these (low vm) types again attracted excellent buyer support and were least affected by the falling market, so too wools with favourable additional measurement results.

“Fleece wools carrying high levels of vm, lesser style lots and wool with poor additional measurement results did not fare as well and in many cases were heavily discounted,” AWEX said.

“By the end of the week, the individual Micron Price Guides (MPGs) across the country for Merino fleece had fallen by between 1 and 43 cents.

“The only exception being the 19 micron MPG in the north, which recorded no change.”

AWEX said the skirting and crossbred sectors recorded minimal price movements, while strong demand for oddments helped push the carding indicators up by an average of just over a cent.

“Due to a strengthening Australian dollar – adding a full cent compared to the US dollar since last week — when in viewed in US$ terms the market recorded an overall gain.

“The EMI added US4 cents for the series, closing at US1008 cents.

Market losses were minimal – AWI

Mr Carmody said the market losses this week were minimal as the major Chinese top makers and carbonizing machinery owners stepped up their operations to secure supply and dominated their respective sectors.

“Trading houses were not as keen at the commencement of selling as they sought market stability in foreign exchange to buy/sell in a less risky environment.

“By week’s end though it became apparent that their rates of purchasing had lifted and the stiffer competition led to the market closing on a reasonably sound footing,” he said.

Mr Carmody said the Western Market Indicator (WMI) peeled back 11 cents or 0.7pc to a closing basis of 1504c/kg clean in a week in which that indicator held against the downward pressure of the forex applied.

“Despite wool values lagging slightly this week, underpinning the relatively stable market was the type of buyers topping the lists.

“When wool is flowing at volume to the first-stage manufacturers, it gives the market a good dose of confidence that wool is being priced correctly,” he said.

“Subsequent trading can then place further competition into the room.

“Some of the first-stage users buying activity this week on the skirtings and oddments was the strongest seen for quite some time,” he said.

Next week, volumes drop substantially, with 37,291 bales currently rostered to sell over two days in Sydney, Melbourne and Fremantle. In a fortnight, the Fremantle centre will not be operating and current estimates indicate just over 31,000 bales will be available to the trade that week.

Click here to see the latest AWEX Micron Price Guides.

Sources: AWEX, AWI.

Tags: #Wool #growers #check #supply #auction #prices #dip

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