Week 38:
The AWEX EMI closed the week at 1778c – up 27c at auction sales in Australia. The market was generally in the hands of an irregular AUD/USD currency exchange as the AUD fell to below 76.8 US from 78c on Wednesday, then recouped some of the losses on Thursday rising back to 77.6 US. In USD terms, the market remained relatively firm posting a 2c loss.
The Merino MPG’s mirrored the currency exchange movements rising by 30-45c on Wednesday and then giving back 5-15c on Thursday.
The Merino fleece categories experienced increased buyer activities specifically on the best style and measured lots and especially if they were well classed. As in past weeks (and months), the lots containing low strength with high mid-point breaks were the hardest to sell throughout a relatively positive market environment.
Merino Skirtings opened strong and, unlike the fleece, held that trend throughout the selling week.
Crossbreds joined the positive party, posting price gains between 20-40c for the week, and as mentioned before, some unskirted and poorly prepared lots were noticeably neglected.
Cardings did not disappoint, posting rises between 14c and 32c for the week.
Keen bidding was evident on Merino Lamb’s wool and prem-shorn merino wool types.
Forward Market Report by Michael Avery – Southern Aurora Wool:
“The forwards traded in very light volume with exporters failing to find consistent new demand at the high spot levels. The trades that did occur were at very attractive levels. In the prompt month 19.5 traded at 2065 (60 above cash) and 21.0 at 1875. These were well above anticipated levels with the strong USD helping add 40 cents to the mid microns on Wednesday. Fine wool traded in the Spring. 17.0 September 2590 and October 2570. 18.0 October at 2180 highlighting the value of having strategic orders in the market as demand ebbs and flows. Direction from here is difficult to predict. The history of the last two years would have the market looking to find a level to rally off as it has done more than a dozen times in this period. On 19.0 micron those pull backs have ranged up to 170 cents. We are currently 110 cents off the February highs. On 21.0 the adjustments have been up to 140 cents. Currently we are only 36 cents under the peak of 1938 set on the 1st March. It’s important to remember that price is not necessarily the most important factor to a successful business. Managing margin is. Historically wool, like many agricultural commodities, can be highly volatile. Such volatility makes forecasting, budgeting and cash flow management difficult thus effecting how the business is perceived and its long-term sustainability.”
Next week’s 47,091 bales will be auctioned nationally. In conjunction with the Australian Wool Exchange, a Wool Auction will be hosted at the Sydney Royal Easter Show. 14,500 bales offered during the two-day event with wool from across the northern region going under the hammer. Moses & Son will be offering on Tuesday. The following week will be a 1 week recess to accommodate the Easter Holidays. It is a great time to be in sheep and wool ~ Marty Moses
