Market Morsel: Winter has come

Fibre | 18th July 2022 | By Mike Avery

Market Morsel

Exporters held back early in the week to see where prices were going to land given the large offering, which had shrunk from earlier expected levels. This meant selective buying for wool which fitted requirements and a limited appetite for wool which did not.

In practical terms this meant solid prices for wool with vegetable fault 1.5% or less (the current high levels of vegetable fault [VM] mean that there are effectively no spare low VM lots) with increasingly varied prices as the VM level rises above 1.5%.

In addition on Thursday a large Saxon blood clip was offered for sale, with very enthusiastic buying leading to large premiums being paid. To the surprise of the buying trade some new demand came into the market later in the week, including some demand for fine merino wool from China which had gone cold on fine merino wool recently. This also helped to fuel the stronger market on Thursday, with exporters reportedly able to square their books in preparation for the recess, so as not to carry too much risk through the recess.

The next report will be published in mid August.

17 Micron

Some fresh Chinese demand for fine merino wool and a large Saxon blood clip helped push the 17 MPG strongly up on Thursday. Fine merino premiums remain at extremely high levels, helping keep 10 year price rankings for 17 micron and finer wool in the top decile.

19 Micron

The merino market finished on a strong note on Thursday, but the momentum still appears to be a downward one in US dollar terms. The exchange rate, which has been doing a good job as a shock absorber, will play a role in price levels seen at auction after the recess.

21 Micron

Manmade fibre prices are weakening on the back of weaker oil prices, and cotton has steadied after a rise to extremely high levels. From an apparel fibre perspective the momentum in prices is not a rising one, and looks suspiciously like it may ease in the spring. Wool prices tend to follow the general lead of the large apparel market.

28 Micron

While there was a flurry of buying activity around quality scheme accredited merino wool this week, only 129 bales of crossbred wool sold was accredited to a scheme. Prices for crossbred wool continue to struggle, with the domestic Chinese clip now adding some seasonal pressure to prices.

Provided by Elders Wool. Prepared by Andrew Woods (Independent Commodity Services) with contributions from the Elders wool team.


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