Very welcome rain is currently falling over much of Eastern Australia including both drought and fire affected regions. They are recording good steady rain falls that is expected to last for a few days. This is extremely good news for our country friends and fire fighters alike and we wish them all well.
Added to this good news, the wool market was poised to open strongly in 2020 with expectations of a 2 to 3% improvement for Tuesday’s opening sale day. Chinese interest had improved slowly over the recess following improved trade news. In the end prices were around 4% dearer followed by a more steadying tone on Wednesday. The finer micron types, 17.0 and finer, were clearly in favor and continued to advance over both days. There were a small offering of 13.5/14.5 micron shorter length types that exceed most expectations with very strong support from both Europe and Chinese interests.
There was a concerning drop in prices late Wednesday in Fremantle with a higher passed in rate as prices lost at least half of the previous day’s gains. This led to a cautious open to Thursday in Melbourne (no sale in Sydney) but confidence improved as the sale continued. Prices finished higher than those in the last session from Fremantle on Wednesday. In the end the market closed the week around about the original expectation of about 3% dearer for 18.0 and broader while the finer microns were 4 to 6% dearer (finest most affected).
AWEX Eastern Indicator compared with 20/12/2019
Change in % +3.27
If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au
Authentico Index Values
Change in %: +6.04
Change in %: +4.48
Change in %: +4.80
Change in %: +3.10
Change in %: +2.37
Change in %: +4.13
The variability seen in the first week was not ideal but we were encouraged by the level of confidence and a more mature market on Thursday. We have a very large offering next week that perhaps spooked the buying trade on Wednesday. We remain confident that the Chinese sector needs greasy wool in the short term. The ability of the exporters to finance the clip with prompt cash payment terms was also floated as a reason for reduce activity. It was not necessarily that buyers were less willing to buy.
Auction offering – current week
Selling Centres for week 29
Market Sale Offered Sold Passed In
North S 29 11,086 10,673 3.7%
South M 29 27,393 25,087 8.4%
West F 29 13,782 11,029 20.0%
Auction offering – next week
Market Sale Sale days Volume
North S 30 W/T 15,985
South M 30 T/W/T 30,297
West F 30 W/T 13,608
If you want to see the complete Wool Sales Roster click here.