Prices for most Merino wools spiked upward at this week’s Australian wool auctions. Heavy enquiry from all wool destinations was converted into new business. Volumes written were substantial, types wanted were from across the spectrum and price levels available were at spot. The subsequent auction activity was consistently strong with just the slightest of pullback apparent at the close of selling at the standalone Melbourne sale on Thursday.

To say a dearer market was expected pre-sale would be an understatement. All buyers expected the market was set to rise considerably given the change to sentiment and the new business conditions permitting such a rise to be accommodated. The AUD v USD forex rate dropped by 2% at the start of the selling and this just accentuated expectations and the subsequent wool value gains. Most contracts had been written at the ruling rate range of 0.7050 to 0.7090 range.

A large majority of this week’s interest came from the sub-continent and European buyers. The better specified types were the most obviously sought after. Many individual grower-lots achieved 100ac plus increases on last week’s values and in some cases upward of 200ac. This was for mostly the spinners and best top making style clips. After a relatively sedate few months, the Italian competition and purchasing was “back to normal” as they were practically unbeatable on all those better wools.

Chinese interest remained in play and heightened as the forex went to the their favour. It was noted though that the ability by the PRC-based wool interests to buy any sort of volume diminished rapidly as the AUD auction prices rose above their ideal bid prices being placed in front of traders and exporters. Indents from China and Chinese first stage manufacturers was evident but in many cases they were outbid by other destinations in volumes above and beyond the 80% of our clip they usually accumulate.

By the end of the week, a general 60 to 70ac was added to all Merino types. A cumulative gain in this sector of over 100ac has been posted in just two weeks. Crossbred wool types managed to extract 15ac more whilst the carding and oddment wools achieved 30ac price gains.  

Next week will further test the market as there are 58,000 bales selling on Tues/Wed and Thursday