Be­ware mar­ket porkies

Tasmanian Country - - THE STOCK REPORT -

THIS week marks the end of the sec­ond-last sale of the cal­en­dar year with all three cen­tres op­er­at­ing on Wed­nes­day and Thurs­day.

At the start of the week it was re­ported ten­sions be­tween China and the United States were eas­ing and ex­porters ex­pected the mar­ket to tend dearer. By Tues­day re­ports said the trade ne­go­ti­a­tions were back to square one and the mar­ket opened the week cheaper with falls of around 10c/kg clean on Meri­nos.

To say our lo­cal wool mar­ket is in­trin­si­cally linked to talks at the G20 sum­mit is a bit of a stretch but there is no doubt they cre­ated a de­gree of un­cer­tainty. It also high­lights the fact that even the ma­jor buy­ers can’t pre­dict what the mar­ket is go­ing to do five min­utes be­fore open­ing.

We have spo­ken at length about se­lec­tion is­sues weigh­ing on prices so no need to go into great depth again, other than to say poor specs were cheaper this week while bet­ter wools main­tained de­mand.

The gap be­tween the good and the bad grows fur­ther. This was high­lighted by the fact the 16.5 mi­cron price guide was the only one quoted dearer on Wed­nes­day, up 38c/kg. AWEX re­ported this was driven by the high-qual­ity Tas­ma­nian se­lec­tion with a high per­cent­age of non-mulesed wool.

Cross­breds’ time in the sun­proved short. Af­ter 28-mi­cron types ral­lied 185c/kg over the past two weeks they dropped 51c/kg on Wed­nes­day. Card­ings dropped 13c/kg in early trade to 1168c/kg.

We have fielded a num­ber of ques­tions from grow­ers about what the mar­ket is go­ing to do in the new year.

It’s a fair and rea­son­able ques­tion, and one a wool grower should ex­pect an opin­ion on from their bro­ker. Of course, an opin­ion is very dif­fer­ent to a pre­dic­tion.

As I men­tioned ear­lier, if the com­pa­nies that set the mar­ket can’t pre­dict it – then any­one who says they can is telling porkies . . . that they might get right half the time.

There is one com­ment I’d like to make: the the­ory there is no wool around so the mar­ket must get dearer is a bit thin as high­lighted by the move­ments of the past 10 weeks.

We do know for cer­tain an over­sup­ply of high mid-break low-strength wools will con­tinue un­til the end of March, at which time they will im­prove and yields and veg­etable mat­ter will de­te­ri­o­rate. We can use this to make in­formed choices.

As this is the last Wool Solutions col­umn be­fore the break, we’d like to wish Tas­ma­nia’s wool grow­ers and merry Christ­mas.

Hope­fully you can spend time with fam­ily and friends, stay safe on the roads and don’t for­get to buy some­thing woollen for a loved one.

Email any ques­tions to [email protected]­so­lu­ a safe

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