Australian wool auctions continued the upward run of prices, but the odd sign of weakness and uncertainty was prevalent at times with the wildly swinging foreign exchange (forex) rates confusing demand signals. The USD v AUD rate was particularly hard to follow, with a 2.5% movement occurring  in a very short period of time. This brought about a cautionary approach to offering wool from the exporters. As such, the week’s buying lists featured the indent purchasers and direct to mill operators who were able to operate tightly to the ruling forex rates, rather than second guessing that would leave traders exposed to overnight currency risks.

The Eastern Market Indicator (EMI) edged 7ac higher (+0.5%) for the week to close at 1434ac/clean kg. Once again, the Western Market Indicator (WMI) outperformed the EMI by appreciating by 13ac or 0.9% to a closing basis of 1502 ac/clean kg. The significant USD EMI price lift suggested demand was still relatively robust as it shifted 1.6% higher to 1009usc/clean kg, in face of the strengthening AUD.  Despite the overall gains,  more wool passed in this week than last as the national clearance rate drifted down to 89.7%.

Despite the overall price gains, there was a distinct demarcation line where demand was obviously stronger. In the Merino wools the majority of sale lots finer than 19.5micron came under more intense competition and eventually forged 15 to 40ac higher. The Merino selection broader than 19.5 micron struggled to maintain their values and were largely quoted as unchanged to 5ac cheaper for the week. Cardings and oddment types were well sought and gained 20ac, but the crossbred wool types ended the week 15ac lower.

Interesting to note was that all micron price guides being quoted out of the WA market were above that of both the Eastern selling centres. In the case of the Merino 18.5 to 19.5 micron types, the difference was substantial and upwards of 40ac higher. Shipping issues may now be playing an increasingly larger part in pricing as overseas mills are willing to pay more to get delivery completed in a quicker manner. 

Next week’s sales have around 46,000 bales rostered to sell over two days.