Australian wool auctions saw prices drift away during the selling week, but some positivity did start to emerge towards the close, both in the West on Wednesday and Melbourne on Thursday. The bulk of the Merino fleece types on offer (the 18.5 to 20.5 micron range) were selling to a better demand scenario than at the commencement and the buyer competition improved particularly for the lower vegetable matter (vm) sale lots and also anything showing the better specifications. 

The forex rate against mainly the US dollar certainly assisted the Australian dollar returns to growers and helped push the clearance rate 12% better as sellers accepted more bids at the current levels. As we push towards the end of the season and quantities on offer start to fall away, one eye of the buyer focus is now firmly looking at those upcoming rostered quantities and strategizing to execute any outstanding contracts and be in a position to be able to trade through the period of less wool being available.

The purchasing activity from our leading trading exporters continue to be dominant in sale rooms, without wanting to interfere with the current trend in place. This somewhat provides an underpinning of confidence for other participants. Those actions also gives belief in the ability of the wools on offer to be able to be moved up the supply chain. There is a sense at the moment that more users are happy to put orders into the market in the fear of missing out, but just don’t want to spook the market.

That “quiet confidence” was also evident at the just concluded International Wool Textile Organization Congress up in Japan. The day to day traders are the sideline event at the conference, but with the face to face contacts being re-established for them since many years of inability of travel, some small but handy new business was reportedly made. All international export destinations customer nations for Australian wool were represented to varying degrees and were largely positive for the long term. Much  talk though centred on China continuing to rebound after their recent end to the strictest of lockdowns.

There are 46,000 bales on offer next week, with just Tuesday and Wednesday required to conduct the auctions.