Mixed results were achieved at this week’s Australian wool auctions. Whilst our leading Australian dollar (AUD) indicators concluded selling slightly down, the demand intensity witnessed at the start of sales was encouraging, as was the results when measured in US dollars (USD)  which for consecutive auctions showed 1.1% price gains (over 2% for the fortnight) in that currency. 

The market started off bullish in the Sydney and Fremantle selling centres, despite the ruling AUD forex rates against the USD being 1.6% to the disadvantage of local AUD levels. Merino prices in particular saw returns improve to sellers in the order of 10 to 30ac. Additionally, both the crossbred and carding sectors showed handy gains of 5 to 10ac.

The earlier commencing Sydney auction market was more heavily impacted as very aggressive buying from a single China buyer, that had largely sat out of the market for a few weeks, pushed prices higher from the outset. Some individual sale lots within the 19 to 21 micron range, sold 40/50ac higher than similar specified lots in Fremantle sold later that same day. 

Exporter traders had reported slightly better conditions to sell since the close of selling the previous week, but nowhere levels the market eventually tracked to. The much stronger AUD also began to stymie new business.

As expected by most local sale room buyers, once all three selling centres operated, price levels all settled down and adjusted across regions to more resemble equitable values and the current selling opportunities. The risk cover that may have been sought the previous day, had obviously been met as buying operations were much more on the mellow side.  

Flowing into the solo Melbourne sale on Thursday, current demand for prompt orders had seemingly been filled, rosters for the following week were indicating 15% more wool had been allocated and prices fell back. The erratic movements of this week again underline just how reactive the market is at the moment as the pipeline is understood to be quite shallow in stocks at almost all stages of the wool textile supply chain. 

Buying was again dominated by traders with direct buying China top makers getting back towards normal market share percentages. Next week has over 45,000 bales on offer over 2 days Tuesday and Wednesday.