The additional quantity at this week’s Australian wool auctions allowed the market to ease back to the buyer’s favour. The pressure on prompt shipments for delivery to overseas mills looked to have been satisfied by last week’s sales and also from buyer’s stocks on hand. From the time the updated auction volumes were made public last Thursday, the steady enquiry and new business opportunities, from mainly China and India, dried up almost immediately. This flagged to auction buyers the potential or likelihood of cheaper wool being available this week, which is exactly what transpired, the Australian Wool Innovation Limited (AWI) said in its commentary for sale week 33 of the current Australian wool marketing season.
“The spot markets for wool since the onset of the pandemic in 2020 have been very much influenced by the ruling sentiment of the day; both positive and negative. Any significant difference to basic trading circumstances or macroeconomics seems to have a greater bearing on those spot wool price setting factors. Additionally, the open cry auction system is a very emotive environment so over reactions to day-to-day positions have to be considered and recognised as a factor in prices offered.” AWI added.
The AUD vs USD forex rate continued to go to the local AUD price advantage (-0.5 per cent) week to week, but this only tempered the losses. Merino wools of all descriptions were anywhere from 35 to 50ac cheaper with all of those losses occurring from the first lot sold at the opening on Tuesday. The Wednesday and Thursday auctions were a much truer refection of the past few months and prices held their own at the new basis. In fact, some better signals were emerging towards the close.
Crossbred wool type prices were in contrast to the merino sector with small gains achieved. Heavy buying from Chinese indents underpinned this sector, with strong support from the local traders who have managed to sell a few orders for reasonably close in delivery. Cardings remained firm unchanged, the commentary further said.
About 57,000 bales is on offer next week as we catch up after wet weather induced shearing and delivery into store delays pre the New Year.
ALCHEMPro News Desk (KD)
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