The Eastern Market Indicator (EMI) dropped 3ac to finish the first week of the 2021/22 selling season at 1420ac clean/kg. In USD terms the EMI closed 1% or 11usc lower to 1059usc clean/kg, with much of that loss due to the weaker AUD against the USD.  After 2 days of selling on Tuesday and Wednesday, the WMI (Western Market Indicator) outperformed the EMI by adding 2ac to go to 1442ac clean/kg. Some individual WA micron price guides finished in front of both the Eastern selling centres.

The first week of the new season heralded in some highly surprising sale results at the Australian wool auctions. Comparing the opening and closing price levels it appeared largely to be a week of inaction rather than action. The final result though was mostly unpredicted with many pre-sale thoughts centring around what magnitude of market losses were expected rather than the resilience of price levels. 

Heavy auction volumes had given rise to the initial negativity from auction buyers, but competition and global demand was able to handle the volume presented this week. Subsequently there was 12.6% of the offering that failed to meet the price expectations of grower sellers. The higher percentages of wool held onto by growers this week was mainly in the skirtings and crossbred brackets. The largest offering was in Melbourne and that centre posted the lowest passed-in rates by some margin, a somewhat unusual situation.

The first two sales of this season provide over 100,000 bales for buyers before the annual three-week recess, last season that figure was 66,000 bales offered and well below normal quantities for weeks 1 and 2. However, this is not an equitable comparison due to effects of low - Covid influenced workplace operations and relatively unattractive prices being offered 12 months ago.

All wool prices did weaken on the first day of selling, but the 10 to 25ac lower levels actually provided the auction rooms more confidence rather than feeding the negativity. The second day bore this out as the initial price consolidation theme was followed by good gains on the better wools. The final day of selling though appeared to push the price trend upward as Melbourne sold solo to some very strong competition and interest.

Exporting traders were largely dominant, but the largest Chinese top maker was keen to absorb mainly Merino fleece and provided the strongest of bidding competition. Chinese indents and European top making took the majority of the crossbred sector, and the largest cardings manufacturer assumed their usual spot at the top of the oddments lists. 

Next week sees the final sales series for the “first half” of the year pre the 3-week recess and all three centres will offer over 51,000 bales.