Market Morsel: Strong demand
Market Morsel
It was another week of strong demand for fine merino wool, with the broader merino micron categories picking up as well. Fine micron cardings are trading at premiums to medium and broader micron cardings not seen in recent decades, if ever.
Chatter along the supply chain continues to focus on superfine merino wool, which indicates continued support for the large premiums currently in the market. There are some weak spots in the merino market, such pieces and bellies with heavy vegetable fault and broad merino fleece with low yields, but in the main the market strength is widely spread across most categories.
Crossbreds continue to wait for some improvement, with the best chance coming from higher broad merino prices dragging the finer crossbred categories higher. Forward bids for 19 and 21 micron are close to auction levels, and extend out to spring 2022 which is a positive sign for the auction market in the short term.
17 Micron
The 17 MPG is now back to mid-2019 levels, with good prospects of further rises. Superfine combing wool remains relatively good value in relation to cashmere price levels.
19 Micron
The auction market continues to absorb solid volumes of greasy wool, of deteriorating quality (due to seasonal conditions) and a firm exchange rate. In this context the market is quite strong, admittedly simply matching the price action seen in other apparel fibres.
21 Micron
The 21 MPG had been marking time in US dollar terms through April, and now seems to have decided on rising. If the finer merinos are to rise further then it seems likely the 21 micron category will track them up to a degree.
28 Micron
Auction prices remain quite varied for crossbred wool. Some of the variation is linked to the quality and standard of preparation of the wool. Some of the variation is also due to buyer activity and the need to fill (or not fill) consignments. In the meantime the 26 MPG looks ready to rise, if the broader merinos continue to show some strength.
