Some signs of positive change to sentiment were seen at this week’s Australian wool auctions. All types on offer came under increased buying pressure with the major local traders heading back to dominance on the auction purchasing lists. All buying sectors were involved, with the atmosphere in sale rooms more buoyant than seen for the last month or so.

Slightly better foreign exchange (forex) rates definitely assisted the improved price returns for growers, but also playing on manufacturers decision making would be the lower volumes being offered. The next three weeks will see the average sale week down to less than 30,000 bales per week, with the Western Australian wool selling centre at Fremantle not offering next week(week49) and also sitting out Week 51 due to volumes not being sufficient enough to hold a commercial sale. 

Additionally,  the Merino wool types being offered are very diverse, with quite a few clips in the 18.5 to 21 micron range containing heavier ( 2.5% to 5%+) vegetable matter (VM) levels. This allows top makers and traders the ability to buy or trade away from the mainstream types to look for value. These heavier VM clips are finding good support at the moment, as the type of VM within the fleeces are considered relatively easily combed.  

This is not only lessening the percentage of the weekly supply of 0.1% to 2% VM of sale lots, but placing upward price pressure on these lower vm clips. The standard and most common type contracts emanating from China are still requiring VM levels to average 1%vm for fleece types. The main volume customers from India are also requiring similarly specified 1% VM levels to be hit for completed orders. 

Within the Merino fleece sector, the general price gains were to the order of 10 to 20ac clean/kg. Of note though was the emergence of premiums being added onto the better specified and more stylish superfine (less than 19micron) sale lots traditionally suited to the European market. The few lots offered this week were selling around 140ac clean/kg above the normal run of the mill types. 

Next week has around 27,500 bales rostered to sell Tues/Wed but only in the two eastern selling centres at Sydney and Melbourne. Fremantle no sale.