Wk 40 06/04/2017 THE AWEX EMI fell 43c at auction sales in Australia this week. The EMI, now on 1459c has fallen 87c (-5.6%) over the past two weeks – from the record high 1546c – and whilst the early part of the sale week looked dire for the EMI, Thursday’s sale result produced a remarkable change in buyer sentiment which resulted in the market recovering some of the lost ground.
The largest weekly falls remained in the 16-19.5 MPG’s, with modest falls measured in the 20 MPG and coarser Merinos. Despite the direction change, the three centres closed with scattered price levels between the north and south with the Fremantle MPG’s showing improved signs thanks to the time line differences, which augers well for next week’s sale. Skirtings mirrored the fleece with Cardings suffering a substantial correction this week. Crossbreds held their ground and whilst variable across the MPG’s, centres reflected the smaller offerings in these types moving forward.
The good news was in the forward contracts – at the week’s end they are now BID on or above the cash price out to June 17. Next week 46,104 bales will be offered, with the focus on the Royal Sydney Easter Show sale under the microscope and should be met with new vigour.
Fine and Superfine Merino prices are still in the top percentile band with the medium micron MPG’s in the top 20th percentile. Still amazing prices given our recent history. ~ Marty Moses
Southern Aurora Wool Forward wool report- Mike Avery: The deep retraction in prices in the auction had a minor impact on the forward markets. Prices for came off around 20 cents while the spot market reduced 50 to 80 cents, particularly in the finer microns. Most forward interest surrounded the 18 and 19 microns as buyers held their forward prices, especially into the spring, having anticipated the fall as demand became constricted by historically high levels.
Volumes were low as both buyer and seller struggle to ascertain fair value with such volatility. 19 microns traded close to their cash level for May and June (1800) and at 1725 into the new season. More growers were looking towards options to manage their risk this week. Their strategy was to pay between 2 and 3 percent option premium to protect their downside, while being able to participate should the market reverse the current downward correction.
We expect bidding interest to be maintained at these lower levels as we move into the Easter recess.