The softening of wool prices at the Australian wool auctions continued this week. This trend has been in force since the sales recommenced three weeks ago following the annual Winter recess. Merino prices again bore the brunt of negative results and a general 30 to 50ac clean/kg was lost. Cardings drifted 5 to 10ac lower, but crossbred wool types actually gained 10ac, albeit from that very low price basis. 

The lack of the Fremantle (WA) market operating failed to provide a positive price stimulus to the two Eastern centres left operating. Any thoughts of the reduced quantity on offer affecting prices positively, was clearly and rapidly dismissed. The forward estimates for the next few weeks had quantities scheduled well above where they were last year at the same time. This is despite the offered and sold quantities at auction being 11.6% and 6% lower respectively compared to last year at the same time.

The noticeable change of seller behaviour for this season is the willingness of growers and their seller representatives to take the prices being offered. Last year at the end of the same auction week six weeks into the new season had seen just 85% of the offered volume traded, whereas this year, 90.3% of wool offered had exchanged hands through to the buyer. 

Chinese top makers and indents for first stage manufacturers dominated the buyers lists again, with a step down strategy able to be employed as competition remains wary. This involves set volumes targeted to being bought, then when met, stepping down to a lower level to secure further inventory. Traders are unable to be confident enough to participate at any great strength. The new forward and prompt business is just not there in volume at present to operate to their usual levels of purchasing engagement at auction.    

Signs emerged this week of the Australian dollar (AUD) against the US dollar resisting further erosion of value for the time being. The weaker forex trend has helped arrest the extent of AUD falls for the past few weeks, and in somewhat of a positive, this week’s market was similarly weaker, but without forex supporting AUD prices. 

A large volume of 48,600+ bales is rostered to sell next week nationally.