FINE Merino wool’s epic run in the Australian wool market has come to abrupt halt, as sheepmeat prices continue to rally in record territory.
Despite a small national offering of less than 30,000 bales, the Eastern Market Indicator (EMI) experienced its fourth consecutive week of falls, softening 23 cents to 1472 cents a kilogram last week.
National Council of Wool Selling Brokers of Australia chief executive Chris Wilcox said the declines came despite a sharp drop in the Australian dollar.
Prices for superfine wool, 18.5 microns and finer, fell between 60 and 90 cents a kilogram clean, while medium Merino wool, 21-22 micron, and crossbred wool prices remained steady.
The Northern Market Indicator experienced the most dramatic fall, down by 33c to 1547c/kg, Mr Wilcox said.
The Southern Market Indicator fell by 19c to 1426c/kg, while the Western Market Indicator slid 16c to 1504c/kg.
Mr Wilcox said while the Australian dollar fell by more than a US cent this week against the USD, the EMI was down by 34 US cents to 1088 USc/kg.
“In the past four weeks, superfine wool prices have dropped by 7-8pc, while prices for medium Merino wool have eased by 1-2pc,” Mr Wilcox said.
“These different trends have dampened the price premium for fine and superfine wool relative to other microns.”
Despite the market slide, Mr Wilcox said the current premium of 40pc was more than double the average seen since 2010.
AWTA reported a remarkable 23pc increase in May in the weight of wool tested compared with May 2016.
“It should be noted that the weight of wool tested in May 2016 was the lowest May total for many years, so the increase this year is somewhat inflated,” he said.
“Even so, the weight tested this May is the largest since 2012.”
The changes were in the opposite direction for sheepmeat, with the surge in prices continuing.
The National Trade Lamb Indicator rose a further 2c/kg to 671c/kg on Tuesday, while mutton remained content at 526c/kg.
Landmark livestock manager Peter Cabot, Wagga Wagga, New South Wales, said the market was currently riding the seasonal peak.
“It has been extraordinarily good for the past six weeks and I can’t see things slowing,” Mr Cabot said.
“With such limited supply, most lambs are going to the major saleyards and very few are going over the hooks.
“That is pushing the big buyers into the yards, as they’re having to source numbers for the next day kill – I can’t see that changing.
“Normally it peaks about now, June is considered the dearest month so you’d imagine we’re in the thick of it.”
p Western Wool Centre (WWC) price falls last week for Merino fleece wool were gernerally not as steep as in the Eastern states with the recent WA star, 19-micron wool, the biggest loser down 82c/kg for the week.
Other price slides ranged from 12c to 20c above 19 microns and 59c for 18.5 micron wool, while prices for 22 micron wool went against the trend, climbing both sale days to finish up 14c/kg for the week.
But the highest national passed-in rates and re-offering rates at the WWC last week tended to reinforce complaints by some buyers the previous week about the quality of the small offering because wool stores have been cleaned out.
Almost a quarter of last Thursday’s 1950-bale offering was rejected by buyers who decided it was not worth what sellers were wanting and the passed-in rate hit 24.9 per cent.
The Merino fleece passed-in rate for the week at the WWC was 19.8pc and cross-bred fleece was most unwanted with only 98 of the 161 bales offered finding a buyer.
A re-offering rate of 15.3pc – more than three times the equivalent rate at the southern and northern selling centres – also added to speculation only dregs remain in WA wool stores.
Essentially, almost one in six bales offered at the WWC last week had been offered and rejected by buyers previously.
Major buyers were PJ Morris Wools, Westcoast Wools and Chinatex (Australia) both WWC sale days last week.
This week, week 49, there are no auctions at the WWC.
When it reopens on Wednesday next week the WA live auction wool market will have the benefit of knowing how the southern and northern markets, which do have auctions this week, reacted after last week’s price slide.
Next week’s sales will be the second last for the current season at the WWC.
