Cheerful season in wool markets
THERE were 52000 bales rostered for sale this week, very close to the largest offering of the season to date.
Melbourne made up about half of the volume, selling over three days while Sydney and Fremantle maintained the usual roster.
Thursday last week saw a bit of dip in the market with the SMI down 14 cents, which took us a bit by surprise.
The drop was only very short lived though and after initially opening softer this week, the market closed on Tuesday at its highest point for the day and continued to firm on Wednesday. Further to this buyers again reinforced that “good spec” wools have maintained their strength throughout thanks to the relatively short supply of these types.
As we touched on last week, current prices and volumes are forcing some exporters to manage their finance facilities very closely.
This is no cause for concern for sellers, rather just a point of interest that it is taking a lot more cash to finance the trade due to the increased prices.
Ram sales are now in full swing and we are seeing strong and widespread buying demand with plenty of positivity about wool prices.
A common talking point has been where are prices going to go in the new year. We all know by now it’s im- possible to forecast the future, so we can only make decisions with what information we have at hand.
The positives are that we have cleared more wool season to date this year than in any of the previous 10 selling seasons, tightening supply pressure. Demand for better-spec Tasmanian wool will continue to be strong as the interstate selection deteriorates.
We have maintained this price point for an extended period now, pointing to some price acceptance from earlystage processors.
On the flip side, as we touched on last week, later stages of the production line have not felt in full this new price point yet. We are sitting at near all time highs and the unknowns of global macroeconomics and exchange rates are also a factor.
My personal view is the positives outweigh the negatives, pointing to sustainability, but it would take a braver man than me to forecast significant increases from the current level.
We are now into December with only two selling weeks remaining before the three-week recess. With a significant Tasmanian selection on Tuesday, we are aware of several Tasmanian-specific orders in the market, which is great.
As this nis my last column for the year I wish everyone well in wool and ram sales during December and a safe holiday period. Don’t forget to buy a woolen item for a loved one’s Christmas stocking.