22 May Trump’s not helping
It was a tale of “three” markets – the Sydney sales were relatively stable, Melbourne was weakest while W.A. was mixed to stronger depending on the micron. The EMI closing the week at 1522¢, a fall of 12¢, however the WMI rallied on the back of an offering dominated by 20 MPG and broader wool to rise by 8¢ to close at 1535¢.
We saw the effect of the Washington/Trump shenanigans which took the confidence out of US markets and resulted in a weaker US$, and by default a stronger A$. The effect on the market was for the EMI to rise in US$ terms (plus 8 cents), but fall in A$ terms (minus 12 cents). The Trump factor causing a 1.5% gain in the A$ over the week to see it finish yesterday at 74.6US¢.
At this time of the year we see increased levels of Vegetable Matter; it impacted most on the skirtings market this week with low V.M. wool tending dearer however high V.M. types were irregular and tending cheaper.
Concerns are emerging about future supply, with brokers reporting that in some regions it has all but dried up. This is making exporters and processors nervous, especially those looking to secure fine wool with good specifications.
The week ahead
Looking ahead we have three successive weeks of sales with bales on offer below 38,000. Next week 37,348 bales are scheduled and all three centres are in operation on Wednesday and Thursday. Subsequent weeks see 33,697 bales rostered on week 48, dropping to 26,150 for week 49.
This tight supply should maintain the market levels, although as we have seen this week currency moves can impact.