Wool sellers feel the heat

Countryman - - WOOL - Bob Gar­nant

The first sale of the 2018-19 wool sell­ing sea­son brought a cor­rec­tion to the mar­ket as de­mand sur­ren­dered to the tra­di­tional rise in vol­ume.

It was the largest weekly price fall since Au­gust 2012, with the East­ern Mar­ket In­di­ca­tor dip­ping 62¢ from the pre­vi­ous week to close at 1994¢/kg clean.

By the end of the week, prices had dipped be­tween 50 to 90¢, with some off-style types up to 120¢ cheaper than the pre­vi­ous week.

Wool­grow­ers look­ing to sell into the new fi­nan­cial year for tax rea­sons were part of the 43,880 na­tional bale of­fer­ing, which re­sulted in a 15.6 per cent pass-in rate.

Aus­tralian Wool Ex­change mar­ket an­a­lyst Lionel Plun­kett said price cor­rec­tions were felt across the en­tire Merino spec­trum, of all types and de­scrip­tions.

“It was off-style types, wools with poor ad­di­tional mea­sure­ment re­sults and those car­ry­ing ex­ces­sive veg­etable mater that were most af­fected,” he said.

“By the end of the week, prices had gen­er­ally fallen by 50 to 90¢/ kg, with some off-style types over 120c/kg cheaper.”

Fleece lines finer than 18.5 mi­cron were least af­fected by the price dip. Wool older than 180 days made up more than a third of the na­tional of­fer­ing, and al­most 57 per cent in WA.

With only this week’s auc­tion to go be­fore the na­tional three-week re­cess, it will be a wait-and-see ap­proach when the mar­ket re­sumes in Au­gust.

The El­ders In­ter­na­tional Wool Re­port stated that from a tech­ni­cal per­spec­tive, the Au­gust mar­ket would most likely be sim­i­lar to the 2018 Fe­bru­ary-to-May pe­riod. “Dur­ing that time, the in­dus­try was very com­fort­able and the price level was con­sid­ered to be sus­tain­able,” the re­port said.

“The medium Merino seg­ment will be un­der the most pres­sure, while the su­perfine sec­tor — wools with good test re­sults — will be in de­mand and ex­pected to go up in price.”

The re­port said the mar­ket would quickly set­tle down in the spring, but as sup­ply be­came an is­sue, prices would tighten up and hope­fully slow and con­sis­tently move up­wards.

“Rarely does the wool mar­ket move ac­cord­ing to script,” it said. “Com­mod­ity prices fell in June, but are still 30 per cent higher than a year ago.”

The re­port said the US trade spat with Europe and China was a con­cern for com­mod­ity prices.

“Ger­man Chan­cel­lor An­gela Merkel has had to nav­i­gate a par­tic­u­larly dif­fi­cult pe­riod in with the far-Right move­ment gain­ing ground,” the re­port said.

The Aus­tralian wool auc­tions will re­cess from the week be­gin­ning July 16, re­turn­ing in the first week of Au­gust.

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