Wool prices fell across all types and descriptions at the Australian wool auctions this week, with all selling centres operating. The most hit was the superfine merino category, which continued to be negatively impacted by relatively large volumes of low yielding drought affecting sale lots and the sparse demand for such wools.
Processors and top makers were ardent buyers, with three of the four sectors topped by these machinery owners. Crossbred buying was largely in the hands of firm offers from forward contractors. There was very little interest from the large Chinese indent buyers yet again, and this could be due to the impact of the US/China trade issue, despite it not been discussed too much. But as prices fell again on the final day, some operators upped their interest and started picking up some volume at the lower levels.
The Australian Wool Exchange Eastern Market Indicator finished the week down 2.2%, or 41 cents, at 1,823 Aus cents a kg clean. In US dollar terms the EMI dipped 3.1%, or 39 cents, to 1,260 US cents a kg clean. The AUD versus USD foreign exchange rate weakened 0.9% on the week-to-week comparison.
On Wednesday, the EMI dropped 31 cents to 1,833 Aus cents a kg clean and down 25 cents at 1,274 US cents a kg. On Thursday, the slide slowed down to 10 cents to 1,823 Aus cents a kg clean and lost 14 cents in US dollar terms to 1,260 cents a kg.
This week, the national offering was 28,140 bales, compared with 21,739 bales last sale. The clearance rate was 79%, as against 84.4% in the previous week. AWEX reported the value of the wool sold to be Aus$42.1m ($1,900 per bale), taking the season total to Aus$3.103bn ($2,153 per bale).
Sydney’s market continued to follow a similar trend of the previous week. Buyers discounted poorer styles with low staple strength and selectively sought best styles and favourable additional measurements. However, the limited selection of lots with best styles tipped the balance towards discounts and resulted in reductions in prices. Merino skirtings were cheaper, while crossbred and oddments eased on Wednesday and were firmer or unchanged slightly on Thursday. The Northern Regional Indicator lost 41 cents to end the week at 1,842 Aus cents a kg clean with a clearance rate of 84%, as against 86% in the previous week.
Melbourne sales were dominated by lots with reduced yield and unfavourable additional measurements. This resulted in price falls across all merino categories. Merino skirtings mirrored the fleece lots with reductions across the range. Crossbreds held well on Wednesday, but poorly prepared lots fell on Thursday. Oddments were mixed. The Southern Regional Indicator dropped 42 cents to 1,810 Aus cents a kg clean with a clearance rate of 82%, as against 83% last week.
Fremantle sales resumed after a week’s recess on Wednesday with large falls across all merino categories. Growers hesitated to sell at those low levels with a low clearance rate. On Thursday, the market was mixed, with the finer wools easing further and with some small gains in the broader categories. Merino skirtings were dearer, while the limited selection of oddments eased. The Western Regional Indicator ended down 55 cents at 1,937 Aus cents a kg clean with a clearance rate of 80%.
Next week, 19,745 bales are rostered for sales at Sydney and Melbourne, with Fremantle taking a break. Trading is again likely to focus on the spring and early summer, with exporters seeking to achieve around 2,000 Aus cents a kg level.
