02 Jul End of a memorable season for wool
The big upward move in the wool market last week and the return of Fremantle resulted in an increased offering this week, with the market easing slightly.
The end of financial year sale resulted in finer types retreating by 20 to 40 cents.
The Eastern Market Indicator gave back 17 cents over the week to settle at 2,056 cents in AU$ terms. AWEX noted this was 531 cents above the corresponding market last year, almost a 35% increase (Figure 1).
Medium wool is trading at historically close levels to finer types, with the 21 MPG in Melbourne closing the week at a record 2350 cent, just 19 cents below the 19 MPG. (Figure 2)
This lends support to the theory that while demand is strong and marketing efforts have been positive, supply is causing buyer concern.
The Australian dollar was stable at US$ 0.73, resulting in the EMI closing slightly softer at 1,513 US cents, US$0.13 below last week.
Despite the record levels, growers lifted their Pass-In rate to 6.1% (last week 2%) which meant 29,830 bales were cleared to the trade.
To summarise the year, 1,803,594 bales were offered, 48,000 more than last year, with Melbourne offering 60,000 more, Sydney up by 16,000 and the Fremantle offering 29,500 fewer.
This resulted in $3.434 billion turnover for the year, while the average number of bales sold per week has been 39,253.
The week ahead
Next week is the first sale of the new financial year and all 3 selling centres are selling. A much larger offering of 43,232 bales are rostered for sale.
This will test the market however the recent trend of growers being prepared to Pass-In wool when the market eases should provide support.