Prices at this week’s Australian wool auctions somewhat surprised the sale room buyers as values continued to trend towards the buyers favour on most sectors once again. Pre-sale expectations were for a very firm to dearer market on the back of some steady enquiry ex China over the preceding weekend. This did not eventuate as all three selling centres opened on Tuesday to levels of between 5 and 20ac lower. 

The large offerings again this week stifled the market from heading in the expected positive direction. The AUD v USD had also risen on Tuesday to a 100 points above where the new business had been written. By Thursday the forex had settled back to that low .68 level but by then the sales had concluded with just Melbourne selling.

Additionally some rhetoric surfaced from the exporting fraternity talk around financing conditions and access to that finance becoming more costly and harder to come by than over the previous years. Some slower payments from overseas are being felt as this ties up money to re-enter the market to purchase further and compete normally at auction.  All these factors contributed to the initial price weakness.

As traders were extremely busy coping with executing substantial deliveries, trying to complete due contracts and constantly following erratic price setting factors for new business opportunities, the two largest Chinese top makers stepped up their buying rates in auction rooms. Their support of the market was strong as they took advantage of any holes appearing and made it more difficult for traders than what has been the case for the past 3 weeks. This no doubt assisted the stronger results that were recorded on the final 2 days of selling which basically saw a firm unchanged market with a strong push towards the close.

Merino wools finer than 18.5 micron finished the week around 15ac lower, whilst the broader wools were harder hit by being around 30ac lower but stability had returned. Both the oddments and crossbred sectors traded hands at +/- 5ac around their established levels from the previous week. Wools selling growers somewhat revealed their intent as the falling price met with resistance which led to a 13% passed in rate.

53,000 bales is on offer next week with three days rostered. Sydney is a designated superfine sale and will sell on Wednesday and Thursday.