Price falls greeted all wool types and descriptions from the outset at Australian wool auctions again this week, but the appearance of some solid resistance to further falls on the final day of selling gave some positive intent. Almost all of the losses were recorded on the initial day as buyers reported business was extremely hard to come by. Financing issues of our manufacturing customers are certainly a negative factor for demand at present. Tight cash flow situations in the middle of the supply chain are hampering fluidity of normal business practice.

The Australian Wool Exchange (AWEX) Eastern Market Indicator (EMI) weakened by 57ac to close the weeks selling at 1766ac clean/kg or 3.13%. Similar declines in US Dollar (USD) terms were also recorded as the USD EMI fell away by 3.38% or 42usc to 1218usc clean/kg.

In USD terms the EMI has not traded at these levels since October 2017, so mills must be getting close to wanting to lock in some volume at these prices, but exporters are most likely still in a risk adverse mode, whereby the extremely low global supply available will prevent too much forward exposure being sought.

Overseas manufacturers waited out of the local market whilst prices headed all to their favour. This is not to say they are reaping a big bonus, as business for them out the other end of the chain is also being stymied by the unknown whims of consumer demands.

The ongoing tariff wars, Brexit and the general decline of the global economy is playing a weakening game on almost all commodity and financial markets, and wool and textiles is certainly not immune to those whims. In fact, as a discretionary spend, apparel and general clothing items is used as a part of the general health check on the overall economy.

Movement of tops, carbo and yarns through to fabric and out to garments on the shelf is now essential for a return to relatively predictable demand for the entire greasy wool sector. When this occurs, it will then assist to mobilize local buyers to accumulate the stocks necessary to supply their raw wool customer with steadier supply at a more stable price - in theory.

Whilst the past few weeks has seen rather erratic price movements, and unfortunately all to the negative, this week saw a more meas-ured downturn. All of the Merino fleece and skirtings sectors from 17.5 to 21 micron sector saw falls of 50 to 60ac. The unreported lower yield types and sub 17.5 micron wools suffered greater losses though, and 80ac was lost from their established values. A now almost non existent price gap is evident to their broader counter-parts.

The local trading companies led the buyers lists across all sectors this week, bar the carding types, which had the largest processor of those types dominant. The lowering prices has seen confidence build slightly and by weeks end the sentiment had lifted somewhat out of the gloom that has existed the past three weeks.

Whether this positivity remains and recovers for the final three sales pre the Winter recess is hypothetical, but given Australia is basically on its own for as far as global supply goes for the next seven weeks, it surely has every chance to do so for those that believe supply will rule over demand for the immediate future?

Once again there was very little interest from the largest of the Chinese indent buyers, but the operator that emerged at the end of the previous week, continued their support of the market through into this week.

Next week has 31,000 bales selling in all three selling centres.

Merino Lifetime Productivity Project

• Is it possible to select for lifetime productivity at a young age using raw data, breeding values, genomically enhanced breed-ing values, visual classing or a combination of industry approaches?
• What is the impact of selecting for wool, growth, reproduction, welfare and carcase traits on the productivity of Merino ewes over their lifetime?
• Why do some animals perform year in and year out, while others fade over time?
• Are there new ways to better predict superior lifetime performance?

Visit the Merino Lifetime Productivity Project website to find out more about the project’s aims, evaluation sites, the sires and ewes involved and to access project reports.

https://merinosuperiorsires.com.au/mlp-project/

Your Woolmark News

In April 2020, Luna Rossa will set sail as part of the America’s Cup World Series, as it vies for the world’s oldest trophy in international sport.

The Woolmark Company has worked with Luna Rossa Prada Pirelli to develop high-performance Merino wool garments ideal for the challenging conditions of the America’s Cup.

As the official technical partner, The Woolmark Company has supported the Luna Rossa Prada Pirelli product de-velopment team to create wool-rich technical garments to be worn by the entire sailing team during training, sailing and offshore activities. This partnership highlights the strong link between the world of sport and the world’s original performance fibre - Merino wool.

www.woolmark.com/news/collaborations/luna-rossa-prada/