The Australian dollar has risen by about 5 cents against the USD in the month of February. The Australian dollar is heavily influenced by commodity prices and with iron ore prices surging, the Australian dollar has moved upwards with it. Added to this are signs that the Australian economy is improving.
The AUD strength against the USD was eventually too much for wool prices to sustain. After initially absorbing the currency movement to record an overall increase in USD terms on Tuesday, the market settled over the next two days as interest from our main trade partner in wool, China, was more subdued. As the market eased, the percentage of growers willing to hold their wool for another day increased. With exceptional seasonal conditions and the strength of all other farm commodity prices, growers are more prepared to hold their wool now than they’ve ever been.
Best style and strength NM wool around 17.0 / 18.0 micron was well supported this week by Italian interests in the last reasonable offering of the season. They closed generally firm for the week and have had a positive influence on our Authentico index’s accordingly.
AWEX Eastern Indicator compared with 19/02/2021
Change in % -0.91
If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au
Authentico Index Values
Change in %: -2.43
Change in %: -2.36
Change in %: +1.80
Change in %: +0.10
Change in %: -0.69
Change in %: -0.39
We’ve now seen the last of the usual fine wool sales. We expect as we move towards our autumn, that VM will continue to increase and staple strength could be lower. Any drought affected wool that we are now seeing in the eastern markets is wool that has been held by growers since 2020. These will at least have low VM and could help to offset the increase in VM expected from the freshly shorn clips. As a result of this change in supply that’s expected, we’re likely to see interest in the better specification wools sustained while the discount to the inferior types might increase.
Auction offering – current week
Market Sale Offered Sold Passed In
North S 35 13221 11227 15.1%
South M 35 26073 22355 14.3%
West F 35 10844 7326 32.4%
Auction offering – next week
Market Sale Sale days Volume
North S 36 T – W 12715
South M 36 T – W – T 27852
West F 36 W – T 9968
If you want to see the complete Wool Sales Roster click here.