Wk 14/16: 06/10/2016 The AWEX EMI posted a 10c increase to close on 1,300c at auction sales in Australia this week. There was some disparity in the three centres MPG movement possibly, even though the Southern MPG’s posted larger rises this week they still fell short of the Northern markets closing MPG levels (the Merino MPG’s on average are 13c higher in the Northern markets).
The low national offerings are being heavily influenced by the heavy rain and flooding across the eastern states, slowing shearing and transport of the clip. The sale rooms displayed solid support from the first lot with good support returning to the lower quality and poorer specified lots however the medium quality merino lots failed to follow the lead of the fine and superfine lots, closing the week slightly lower. Skirtings mirrored the fleece lots, with a 20 rise posted on the finer types and the coarser lots maintaining last weeks’ levels. Crossbreds remained steady for the week and carding wools posted 5-10c increases for the week.
Mike Avery from Southern Aurora Wool reports “Trading was light again this week on the forward instruments with the strongest bidding prior to the commencement of auction sales Wednesday. January to March 2017 levels of 19.0 microns of 1,500 and 21.0 microns of 1,385 were achieved and represented a significant flattening of the forward curve. 21.0 microns traded above of cash at 1,400 cents for October. We expect the forward market to reflect the general uncertainty with limited opportunities around cash (1,370 to 1,400) prior to Christmas and a trading range of 1,350 to 13,80 in the New Year. Pleasingly the premiums on the finer microns continue to open up delivering better hedging opportunities. The basis between 19.0 and 21.0 now sits at 144 cents (1528 v 1384) the highest since November 2011”.
Next week’s offering of 33,091 bales is more evidence of the current restrictions of wool movement caused by the extraordinary weather events relating to the Eastern states. ~ Marty Moses
Market Report (PDF)