14 Apr Industry working together produces confidence
The wool market is showing similar resilience to the stock market; despite the obvious unprecedented challenges it keeps going. Like the ASX, it has bad weeks and good weeks, in the context of the global uncertainty this was a good week.
The positive response by all in the industry to reducing the size of the offering, and the openness to review the selling system was a sign of all things good for wool, at times of adversity the industry can rise up.
Of the original roster of about 44,000 bales, 24.7% was withdrawn prior to sale by growers, this produced a reduced offering of 29,495 bales. The pass-in rate fell to 13.3% nationally leaving just 25,581 bales cleared to the trade. This was almost 5,000 more than last week.
The efforts by brokers was significant in ensuring that only genuine sellers put wool to market. This had the double whammy effect of reducing the offering and therefore increasing the demand on the lots in sale, as well as increasing buyer confidence as they realised that the wool on sale was more likely to be sold.
The other significant event was the inaugural Online Open-Cry (OOC) auction. In an initiative of the industry CV-19 working group to have in place contingency options, Zoom video conferencing was trialled with great success. This will provide an industry accepted option should CV-19 restrictions escalate to the point where auctions are cancelled.
The Eastern Market Indicator (EMI) improved 14 cents for the week to close at 1,301 cents. The Australian dollar remained stable at US$0.613, with the EMI in US terms was up 8 cents to 797 cents. The Western Market Indicator also had a positive week rising 31 cents to close at 1,384 cents.
The lift was across all Merino types with rises of 4 to 70 cents, with Cardings generally unchanged except in Melbourne where a 33 cent lift was observed.
Crossbred types failed to follow the general uplift losing 12 – 26 cents across the 26 – 30 MPGs on Melbourne, while a small offering in Sydney reported as slightly dearer.
The week ahead
The sale next week is the additional sale rostered in what is normally the Easter recess. This was scheduled to assist processors get wool into their pipelines and to provide another opportunity for growers to sell.
There is only 21,523 bales offered nationally with selling in all centres on Wednesday only.