Week 01: 06/07/2017 The AWEX EMI closed on 1,524 down 1c at auction sales this week in Australia. OK- before anyone picks up the phone pointing out that last week the EMI closed on 1507c, the worst maths student would highlight that this was a 17c rise rather than a 1c fall. This has been the result of a review undertaken by AWEX, due to the continuing fining of the Merino clip across all centres, resulting in the Northern, Southern, Western indicators and the Eastern Market Indicator revision.

Now that we have that clarified that-the market faced the traditional jump in bale offerings for the 1st sale of the new financial year to 51,150 bales the largest since the Easter break. Whilst 7.4% of the offering was passed in, the sale resulted in gross proceeds of over $80m, an average of almost $1700/bale (last season averaged $1601.84/bale).

The prices reflected solid support across the MPG’s with most categories maintaining between 5-15c off last week’s levels. Fleece saw solid competition on the FNF lots with the cut off at 1.5% VM. Skirtings experienced slight increases in price especially in the lots containing great specifications and VM ≤ 3%. Crossbred lots were well supported with a slightly larger offering than in previous weeks. 26-28µ were slightly dearer while 30-32µ lost up to 10c for the week. The merino carding sector came under some pressure this week with falls up to 20c recorded.

Next week signals the last sale before the traditional July 3-week recess with 47,348 bales going under the hammer. Based on historic closing markets leading into the July recess my prediction is: – a slightly weaker opening market followed by a strengthening closing day.

Mike Avery from Southern Aurora Wool reports “Another week of uncertainty in both the forward and spot market. We head into the last round of sales with both buyers and sellers reticent to commit. Buyers are unable to find any clear signals from the downstream processors. Outright sellers are not prepared short the market at the risk discount buyers are asking at the historically high spot prices. Highlights of the week were August trading at 1500 and above and the hedge setting of 21.0 out to September 2018. We expect next week’s auction to continue the same pattern. Slight easing of prices into the recess”. – Marty Moses

Market Report (PDF)