Week 17: The AWEX EMI closed on 1333c - down 36c at auction sales in Australia this week. The positive emotion of last week’s 46c rise in the EMI quickly evaporated well before the 42,117 bales went under the hammer. Business from Chinese interests were very quiet as the market opened on Tuesday and the market quickly gave back about 50% of the merino MPG gains of last week which attracted a higher pass in rate of 21% with 5.6% of the offering being withdrawn before sale. Currency exchange may have compounded the market’s downward movements however the lack of enthusiasm from China was the key issue this week.
Merino Fleece opened under degrading confidence, reversing the gains of last week. These wild weekly fluctuations affected the best style and specified lots suitable for Italy/European and fell in line with the lots more suited to China whilst maintaining their health premium.
Lots 19μ and finer, declared NM and certified to a SustainaWool or RWS Integrity Scheme were at times trading up to 200c above the average market quotes. The final day of selling saw some price basis return to the market and support from exporters on combing wools was more widespread.
Merino Skirtings were more heavily affected by the turn in the market sentiment than expected. Some average style and specified lots failed to attract competition and were passed in. A point of note that a large number of skirtings lots were sold post sale.
Crossbred fleece lots 28μ and coarser gave back last week’s gains of 10-15c however heavier falls were experienced in the 26-27.5μ fleece types. Lots with heavy VM were unable to attract a bid, whilst the coarse XB and composite lots at record low process were unable to provoke bidders to see their value and were passed in.
Merino Cardings opened 20c-30c cheaper across the board with Merino Lamb’s wool trading with extreme volatility based on their preparation and visual bulk status.
XB oddments remained irregular with the coarser micron categories trading at extremely low levels.
Forward prices traded out into early 2022 at 50-60c premiums to the cash for 19 MPG contracts. January delivery topped out at 17.25 and March delivery traded at 17.10c with the spot price closing at 16.63c.
With the market expected to consolidate new levels next week, these prices should be maintained for the 1st quarter for next year.
Next week’s national offering reduced slightly, due in part to the softer market. 40,276 bales are currently expected to be offered.
Due to the Melbourne Cup holiday in Melbourne next week, sales will operate in Sydney, Melbourne and Fremantle next Wednesday and Thursday.
The early market intelligence points towards better market support at closing levels with the exception of the fleece lots finer than 19.5μ of average or poor style, high VMC heavy colour or cotted wool.
– Marty Moses
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