Wool market to 'keep calm and carry on' for the next three weeks

Merino wool prices tipped to hit a 'calm' patch in the next few weeks

Wool
CALM BEFORE ANOTHER STORM?: A leading wool buyer and exporter is tipping Merino wool prices will hit a calm patch in the coming three or four weeks.

CALM BEFORE ANOTHER STORM?: A leading wool buyer and exporter is tipping Merino wool prices will hit a calm patch in the coming three or four weeks.

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The Eastern Market Indicator made a tiny but pleasing rise in the final day of wool sales this week.

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A leading wool buyer and exporter is tipping less volatility in the Merino wool market in the next three or four weeks before shearing gets into full swing in Victoria.

After that it will be anybody's guess says the trading manager for Fox & Lillie, Wes McNaughton.

The wool market has been hit by wild price fluctuations so far this selling season on the back of deep global trade and economic uncertainty triggered, in large part, by Donald Trump's bid to reduce the United States' trade imbalance with China.

Mr McNaughton expects a calm will descend on Merino wool prices in coming weeks before more Victorian wool hits the market although he thinks crossbred wool prices might weaken further.

He said at the moment nobody was desperate to buy or sell.

Wool was still popular with consumers around the world but they were keeping their money in their pockets because of economic turmoil, he said.

Consumers in China were also having to spend more of their incomes on food which was being made increasingly more expensive by the devastating outbreak of African swine fever.

As a result wool clothing stocks were building up at the retail level.

This week a total 32,970 bales is scheduled for sale in Melbourne, Fremantle and Sydney.

Sydney's will hold a one-day sale because of the impact of drought on production with 5425 bales.

A total 19,371 bales are rostered for sale in Melbourne while over on the west 8174 bales are catalogued for Fremantle.

Last week's sale saw a 27 cents drop in the Eastern Market Indicator on the first day of selling but buyers got stuck into the 17,259 bales on offer on the second day and in the process pushed up the EMI by one cent to 1517c.

The rise was tiny and the national pass-in rate was still 13.9pc but at least the market ended on a positive note.

Sales had opened last Wednesday in Melbourne and Sydney to immediate losses and by day's end the individual micron price guides had fallen by nine to 51 cents with 18 microns and coarser hit hardest.

Over in the west Fremantle suffered bigger losses of between 51 and 69c despite a late rally which pointed to a firmer trend at sales the next day when the Merino price guides across all three centres rose by five to 15c.

The EMI only added one cent for the day due to price falls in other sectors of the market.

Crossbred wools were the worst performing sector for the series with the crossbred micron price guides sliding by seven to 55c.

The Northern Indicator in Sydney finished the week by rising five cents to 1545c with a pass-in rate of 11.9pc on an offering of 5118 bales.

The Southern Indicator in Melbourne stayed steady on 1500c with a pass-in rate of 15pc on an offering of 9003 bales.

Over in Fremantle the Western Indicator climbed 11c to 1621c with a pass-in rate of 14.2pc on a catalogue of 3138 bales.

Buyers from China were again dominant with support from European and Indian mills.

Exports to China were down 40.6pc in August but still accounted for 72.3pc of total exports of 10 million kgs for the month.

Proceeds so far this selling season have reached $565.68 million.

The story Wool market to 'keep calm and carry on' for the next three weeks first appeared on Farm Online.

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