Smallest offering in months spurs on buyers

Wool market continues its stellar run

Livestock
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Australian wool market has lifted again, but experts warn the upwards trend may come to a halt sooner rather than later.

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The smallest offering the market has seen in eight months commanded strong buyer pressure and as a result the Australian wool market lifted for the sixth consecutive week.

But industry experts warn the upwards trend may come to a halt sooner rather than later.

The AWEX Eastern Market Indicator increased by 20 cents to close at 1468c/kilogram, clean, as buyers fought hard from the outset, in an attempt to secure meaningful quantity of the reduced selection.

Fremantle did not hold a sale this week, with just Melbourne and Sydney selling, only 33,330 bales were available to the trade, 9166 bales fewer than the previous series.

Fine wool prices continued to drive the indicator with price gains from 17 to 10.5-micron ranging from 0.5 per cent to 2pc for the week, while medium Merino fleece prices closed largely unchanged.

Prices for fine wool have risen every week for producers since mid-May 2021. Over this period fine wool prices have rallied by 14 to 16pc.

But Northern Region Wool Manager Nutrien Ag Solutions David Hart said although it has been a positive few weeks in the wool market, there may be some headwinds in front of the industry.

"We may be approaching the end of this particular good 'run' in the next few weeks," he said.

"The market has had a pretty good run up and nothing goes up or down forever, so I think we might see I breather in that upward trend."

"It's been a steep rise, but the longer it goes on, people start to get a bit nervous."

He said there are still some issues being experienced regarding shipping flowing back into finance issues.

"I was told today it is almost impossible to get wool into India at the moment," he said.

"And if logistics are difficult, flow on to finance problems because it ties up money. Mills or overseas buyers don't open up letters of credit until the wool has landed or in a particular stage in the journey."

He said the tentative roster for sale one at the start of the financial year, which is the week after next, has just been released by AWEX and there are 56,000 bales rostered.

More volume is anticipated to have a negative effect on next week's market, impacting heavily on buying intentions.

"It is going to have an impact of sentiment - the fact that we know there are 56,000 bales in the following week," he said.

"But these are short term issues - in the medium term I think the outlook is still pretty good."

Crossbreds also performed reasonably well for the series, lifting between 9 and 33c. The 26 MPG in Melbourne the stand-out for that category. Cardings rose 2c in Sydney and 5c in Melbourne.

Fremantle returns to the selling program next week, which will be the last sale of the financial year.

This return, combined with this week's price rises enticing more sellers to the market, has pushed the national offering higher.

Over 44,400 bales are expected to be offered, with all three centres in operation.

The story Smallest offering in months spurs on buyers first appeared on Farm Online.

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