This week’s Australian wool auctions produced results reflective of the tight trading range that the market has charted to over the first half of the 2021/22 season. Some slight alterations to quotations were made, but mostly firm unchanged covers the auction activity.

The Eastern Market Indicator (EMI)  fell away by just 2ac to close pre recess at the 1358ac/clean kg level. Relatively minor adjustments to the ruling forex rates had the USD EMI losing 4usc to 966usc/clean kg, and the Western Market Indicator (WMI) depreciated 9ac to 1408ac/clean kg. 

Not many of the trade participants were expecting much change pre-sale this week and that is exactly what happened. The trade has predominantly been on a hand to mouth modus operandi and very few exporters/buyers were wanting to stock any potential incomplete batches and pay the holding charges over the recess. Shipping is also problematic and those two factors alone prevented any forced plays from both parties of the ownership exchange sides leading into Christmas.

As such, the traders were heavily interested in completing full batches in order to meet those tougher shipping deadlines and topped the buyer’s lists throughout the selling week. The first stage processors were in the market, but were often out bid. 

The stability in wool trading/pricing over the past 6 weeks has been somewhat unusual against  the wool market’s normally erratic pathways. In USD EMI terms for example, the 6 week range is 963usc to 972usc (0.9% around the mean) but greater differentials occurred on the AUD EMI with a range of 1319ac to 1360ac (3.1% around the mean).

Since the beginning of the “new” season opening in early August the market has retreated in both USD and AUD but only minorly. The local AUD prices have gone just 1% lower from 1372ac to 1358ac today and in USD from 1010usc to 966usc which is a 4.4% deterioration. Given most of the local exporters have reported “tough” trading conditions, and retail consumer spending remaining difficult, these results can be looked at as being a positive outcome for the resilience of wool values.

Sales are now in recess with a reopening of auctions in the week commencing 10th January 2022.