Positive results all round at this week’s Australian wool auctions. The sale room bids came thick and fast from the outset of selling and were progressively stronger. At times the bidding became somewhat aggressive. Improved current demand, a few “new” players represented in the indent buying sector and a vastly better Australian dollar exchange rate against the US dollar all contributed to set the market on the upward trajectory for the sale series, alongside the low volumes available

This better competition originated out of a more confident Chinese manufacturing sector but their ensuing market actions flowed through to all other wool destinations. Enquiry, contracts and auction purchases resulted from European and Indian buyers, looking to get set for some supply at somewhere near the ruling price levels. As has been the case for a few seasons now, the Chinese orders often lifted price levels instantaneously to out bid those other importing nations.

This current shift in sentiment though appears to have had its genesis from improved stocks, shares, equities and property values  which lifted confidence for both the textile manufacturers purchasing managers with an eye to the future selling opportunities and local operators reacting to that new trend. Of course, these are strong indicators of a strengthening macro economy which should see discretionary spending return to retail.

Lowering supply and having a large number of US dollar using indents and direct buying operators in our sale rooms have certainly aided in prices recovering somewhat this week. The forex rates play that integral role in price conversion to auction levels and bids on a daily, if not, intra daily basis. The 2% advantage of the lower AUD this week was fully utilised, and then some.

The limited supply saw some individual lots being purchased at an “at best” scenario, causing price gains of well over 100ac. Merino prices all appreciated by 50ac to 90ac/clean kg, with the long suffering super fine descriptions the beneficiary of the largest gains. All other sectors gained 5 to 20ac.

Local exporters and the Chinese indent operators dominated purchasing with the top makers relegated down the lists for the time being. Indents certainly forced the gains into the market and traders reacted and followed. Next week sees 39,600 Australian stored bales rostered on Tues/Wed.