AUSTRALIAN Merino wool prices were unable to maintain their upward movement at auctions last week, but crossbred values sold firm to dearer.

The Australian Wool Exchange said the benchmark Eastern Market Indicator fell for the first time since mid-February for an offering of 39,048 bales, 1096 fewer.

“The season to date offering continues to track well below the previous season, but the difference is not as large as the start of the year,” AWEX said.

“There have been 192,208 fewer bales offered through auction this season, a reduction of 13.9 percent.

“After the first wool sale in January this reduction was 19.3pc.”

AWEX said on the first day of selling, the benchmark EMI added a single cent, climbing to 1251 cents/kg clean.

“This pushed the run of daily EMI increases up to 11, this was the longest run of EMI rises since 2011, when the EMI rose 15 times between May and June.

“Across the current run of rises the EMI rose by 71 cents, an increase of 6pc,” AWEX said.

“This week was heavily influenced by currency.

“When viewed in US dollar (USD) terms, on the first day the EMI fell by US8 cents.”

AWEX said this was the largest daily fall in USD since October last year, when the EMI dropped by US 13 cents.

“On the final day of selling, the upward run of the EMI ended after losses were recorded across all three selling centres.

“The heaviest falls were recorded in the merino fleece types 20 micron and finer.”

AWEX said this was reflected in the individual Micron Price Guides in this range, which fell by between 2 and 37 cents.

“These falls combined with mixed results in the other sectors resulted in a 6-cent drop in the EMI.

“The EMI closed the week 5 cents lower at 1245 cents/kg clean,” AWEX said.

“When viewed in USD the fall was larger, the EMI closed the series at US786 cents, a weekly fall of US10 cents.”

Softer demand at auction – AWI

Australian Wool Innovation trade consultant Scott Carmody said the value of the Australian dollar (AUD) against the US dollar (USD) and Chinese yuan (CNY) went to the favour of local sellers on the week-to-week comparison, but wasn’t enough to help stimulate further price rises into the market.

“The weaker AUD though did assist in cushioning some potentially weaker returns to growers.”

Mr Carmody said auction sales for the week went very much to the pre-sale expectations of most buying participants.

“Selling opportunities were available right up to the preceding weekend, but evaporated from Monday onwards.

“This gave exporter buyers an indication of an upcoming relief in buying pressure so they could maximise returns from forwards booked or to take on inventory for future demand at more predictable rates,” he said.

“The direct buying companies for first stage manufacturers also recognized the more advantageous auction buying conditions early on Tuesday’s opening and immediately took to picking off volume within the more stable price environment.”

Mr Carmody said a few factors combined to see the market stabilize and trade lower in the major foreign currency (USD).

“Demand became softer, but auction volumes increasing by 10-20pc each week from initial three-week out forecasts plus the makeup of the offering being lower in yields and strength all play their part in the ultimate price determinations.”

Mr Carmody said  crossbred wool types enjoyed the best results of the week and prices all appreciated 5-15 cents for the week. Cardings sold to the sellers’ favour to 5ac dearer throughout.

Next week there is currently 41,492 bales on offer nationally.

Sources – AWEX, AWI.