Wk 20 17/11/2016. The AWEX EMI posted a 24c rise at auction sales in Australia this week. The recovery pushed the EMI to 1,314 and gained strength throughout most of the week.
The strong support came on the back of two solid downward markets, combating larger quantities, a rising US currency exchange rate and the final straw last week, an upset result in the US election.
This week’s 47,000 offering was met with new vigour, a lower exchange rate (-2%) and the world confident that the political changes in the US may not be as bad as was thought. This sparked buyers into showing some urgency to secure wool for shipments to arrive to its destination before Christmas.
Merino Fleece posted weekly rises between 20-50c with the finer categories commanding the most attention, this price pressure diverted new support to the lower specified and poorer style lots. The skirting trend mimicked the fleece whilst the merino carding indicator posted between 10 and 20c rises. All eyes were on the ailing crossbreds to reverse their sustained price slide. Whilst the 26-28 MPG’s posted an unconvincing result, the 29-32 MPG’s managed a small recovery.
The market faces 49,282 bales next week before the offerings fall back to 45,000 and 44,000 cruising into the Christmas recess.
Forward prices were re invigorated by the new urgency and transactions were made in both the 19 and 21 micron contracts. The forward curve flattened substantially as the bidders took out longstanding offers (some above the cash). If the forwards are any indication it looks like we are in for a great merino market heading into the December period and beyond. ~ Marty Moses