Welcome return to relative normality at WWC

Welcome return to relative normality at WWC

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Live auctions moved show floor section of the warehouse in late-March.

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TRADING at the Western Wool Centre (WWC) will return to relative post-COVID-19 normal next week with brokers and buyers moving back into the sale room for the last live auction week of the 2019-20 wool season.

Live open-cry auctions at the WWC moved out of the air-conditioned and sound-proofed sale room into the adjacent show floor section of the non air-conditioned and unlined AWH Ltd warehouse complex in Bibra Lake towards the end of March.

The COVID-19 one person to four-square-metres rule meant the sale room was too small to safely accommodate the usual number of wool buyers, brokers' auctioneers and auction clerks as well as the Australian Wool Exchange (AWEX) staff who record sale data.

Halving of the square-metre rule this month and this week's scheduled auctions recess at the WWC provided the opportunity to move furniture and electronic equipment back into the sale room for the season's final sale week.

"They (AWEX and AWH) have been really lucky over the three months, we only had one really hot (auction) day and it only rained for the last half hour of one auction," veteran Tianyu Wool buyer Dave Cox pointed out after last week's sale out in the warehouse.

"It (holding live auctions in the cavernous warehouse space) had the potential to be a disaster but it worked out alright," said Mr Cox.

At times auctioneers had to compete with the reverse beepers on forklifts, the thump of a wool dump in another part of the warehouse, an occasional angle grinder in use in a workshop the other side of a tin wall and an export company outside moving shipping containers about, but they coped.

A heavy downpour drumming on several hectares of tin roof however, would have been deafening and impossible for them to shout over.

AWEX Melbourne and Sydney wool centre auctions moved back into their sale rooms last week.

As Farm Weekly went to press, it looked like the WWC's run of one-day sale weeks due to small auction offerings is set to continue next week to end the season.

The strength or weakness of the Melbourne and Sydney wool markets this week, while the WWC is in recess, will likely influence whether Western Australian woolgrowers are prepared to put enough wool up for the last sale of the season to warrant two sale days.

"There's a fair bit of wool in sheds on farms at the moment because growers don't like the prices, don't need the cash (from wool sales) because sheep prices are high, so they'd prefer to wait and take their chances into the new financial year," said Westcoast Wool & Livestock auctioneer Danny Burkett at last week's WWC sale.

The consensus among brokers seemed to be they were really not expecting significant price movements or a lift in demand until after the annual recess for all AWEX auction centres over the last three weeks of July.

With the WWC having missed a week of sales a fortnight ago while Melbourne and Sydney traded into firmer territory, prices at last week's one day sale initially played catch up, as predicted in Farm Weekly last week.

But once the WA market had caught up to Melbourne and Sydney price levels - about half way through the WWC fleece auctions - demand started to soften noticeably.

There was still very good competition between buyers for selected lots, but the passed-in rate began to climb, from about 8 per cent in early trading to 14.4pc by the last lot of the day - an interlot line passed in without a bid.

While the market at the WWC was rising and then levelling off, Melbourne prices had started to soften and with Melbourne also trading a second day and joined by Sydney, both experienced significant price falls across the micron spectrum after the WWC had closed for the week.

The AWEX weekly market summary noted: "Many buyers attributed these losses to the inability to average the 70pc washing yield required for many Chinese orders, due to the large amount of lower-yielding wools on offer".

"In contrast to this, the limited number of high-yielding (or) better-style wools attracted very strong buyer demand and were the least affected by the falling market," the summary noted.

At the end of the week, WWC price guides for 18-19.5 micron wools were up between eight and 16 cents per kilogram clean and the Merino cardings price guide jumped 34c to 910c/kg - its highest level since March 31.

The price guides for 20 and 21 micron wools eased 6c and 8c respectively for the week.

In contrast, Melbourne and Sydney price guides retreated across the board for the week, with falls at the broader end of up to 49c in Melbourne and 34c for mid microns in Sydney, according to AWEX statistics.

The benchmark Eastern Market Indicator dropped 12c to 1171c/kg in comparison to the Western Indicator climbing 8c to 1247c/kg for the week.

As a result, the WWC micron price spread of 1494c/kg (18 micron) to 1281c/kg (21 micron) and cardings price are now between 2c and 36c higher than the equivalent price guides in Melbourne or Sydney with two exceptions.

The Sydney 18.5 micron price guide is 1c higher than the WWC guide and the 19 micron Melbourne guide is 2c higher than the WWC guide.

With three centres trading, AWEX weekly turnover from live wool auctions was back up to $25.02 million, taking the turnover total so far this season to $1.9 billion - a massive almost $1.2b down on what it was at the end of week 50 of the previous wool season.

Local and national wool traders took out the top three positions on the WWC buyers list last week in PJ Morris, Techwool Trading and Westcoast Wool & Livestock.

Lempriere Australia was fourth and Tianyu seventh as the biggest buying Chinese-controlled companies, but all of the local and national traders on the top of the WWC buyers list are also trading with China as their main wool customers.

For the second week in a row Elders WA offered wool on the AuctionsPlus live online auction platform with some success last week.

It put up 71 bales across eight lots and all but one line sold to a top of 673c/kg greasy on Friday morning - the AuctionsPlus online auction moved back a day to accommodate the Melbourne and Sydney AWEX centres trading on Thursday because of the Eastern State's public holiday on Monday last week.

The 18.1-19.3 micron fleece was between 80 and 100 millimetres long and styled as MF6S.

Nutrien Ag Solutions Southern also offered some South Australian 21 micron MF5S styled wool which topped at 885c/kg greasy.

Tom Rookyard, AuctionsPlus, said the weaker live auction results in Melbourne and Sydney the day before did not seem to have much impact on the online auctions which had a clearance rate of 74pc.

Competitor WoolQ continued to offer quantities of superfine wool from Yass, central New South Wales, on Thursday last week, for the second week in a row, with mixed results, clearing six of the 13 lots.

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