Some extraordinary sale results were achieved at this week’s Australian wool auctions.  A rapidly deteriorating value of the Australian dollar (AUD) against the US Dollar (USD) and some prompt demand from the major destinations ensured strong competition would flow into sale rooms. As such, prices within the Merino fleece and skirtings escalated substantially from the opening lots sold. Some individual sale lots returned over 100ac better than last week, with most pressure being placed upon the 20 micron area.

It was not all positive though as the sale returns for the crossbred wool types and cardings barely held their current values. Most of these wools were  selling to the buyer’s favour for majority of the week. Just a few cents was gained on the very small offering of the true to type and prepared correctly 29 to 31 micron sale lots, but all others lost 5 to 10ac. Cardings sold under a tough atmosphere and losses of 5 to 20ac eventuated by the close. 

The Eastern Market Indicator (EMI) gained 29ac this week to climb to the season high of 1467ac/clean kg. On the surface positive results, but diametrically opposed fortunes were the outcome depending on type. Additionally, when looking at the USD EMI actually falling by 9usc for the week to 1027usc/clean kg it is clear that forex rates had plenty to do with local AUD auction prices accomplished. The WMI (Western Market Indicator) gained 73ac or 4.9% to 1563ac, which represents two weeks of market rises after not selling last week.

Apart from the WMI, the general market indicators masked the true market signals this week. The averaging  nature of these simple directional tools were not indicative of current conditions. That is, strong demand for Merino fleece and skirtings, weaker demand for cardings and the continuation of the extremely low levels of interest for crossbred wool types of all descriptions.

Merino types gained from 40 to 80ac for the week, with sale lots having lower VM (vegetable matter), good strengths and higher yields taking the higher edge of that range of gains. Cardings struggled to find firm levels of trade on almost all types throughout the week, and despite the cheaper US prices available to overseas customers, prices drifted all week. Crossbred wool descriptions followed that similar pattern but managed to hold. 

After dominating auction rooms for almost the past month, the Chinese top makers and manufacturers were matched and often outbid this week from locals and traders. The first stage manufacturing purchasing intent remained strong but as prices rose, they became more price sensitive. 

Next week’s sales sees a return to just two selling centres in operation with 31,000 bales on offer. WA is not offering.