Market Morsel: Volumes and A$ weigh on wool
Market Morsel
There was expectation that the market would open lower this week, after three weeks of recess. The buy side of the market were proved correct, with prices taking a little while to find their level. A combination of a large offering and a 3% rise in the Australian dollar to the US dollar during the recess were obvious factors in the lower prices.
Downstream along the supply chain, demand is quite varied with domestic Chinese demand, apart from uniform orders, extremely weak. This is not a new factor, but one which continues to develop. The saving grace for the supply chain is continued demand from north America and Europe.
With the start of the new northern hemisphere Autumn/Winter retail season close at hand, the supply chain will be waiting and watching closely for indications on what is selling where and in what volume. For the greasy wool market, the waiting by the supply chain for this information means prices are unlikely to rise in the next month or so.
17 Micron
Fine micron premiums continue to hold at extreme levels. Overall the price levels for fine merino fleece did not change much, when viewed as weekly averages in US dollar terms. The good news to be drawn from this is that demand continues to hold up for fine wool.
19 Micron
The exchange rate did play a role in prices following the recess, with a three per cent rise against the US dollar seemingly translating into a comparable fall in wool prices at Australian auctions. It was not all bad news with RWS premiums continuing and some of the vegetable matter discounts shrinking this week.
21 Micron
In US dollar terms the 21 MPG finished the week near the low side of its trading range it has been in since early 2021. Support around this price level seems likely. Uniform orders are reported to be helping out Chinese processors who are struggling with weak domestic demand. This should help support the broader merino prices.
28 Micron
Some 138 bales of crossbred wool accredited to RWS was sold at auction this week (compared to 5 bales this time last season). On limited data it appeared there were good premiums paid for RWS accredited good crossbred fleece lots.
