After three weeks of consecutive increases the Australian wool market has hit a stumbling block, with almost all sectors of the market recording losses.
The AWEX Eastern Market Indicator (EMI) fell by 40 cents or 3.9 per cent to finish at 996 cents a kilogram with the Merino fleece sector suffering the largest losses as individual micron price guides (MPGs) across the country fell by 20 to 95c.
AWEX senior market analyst Lionel Plunkett said the fall in price levels understandably pushed the passed-in rate higher.
"Over 17pc of the national offering failed to reach seller reserve, this was 15.2pc higher than the previous week," Mr Plunkett said.
"The national offering increased to 31,022 bales, 7762 bales more than what was available in the previous week.
"Although this week's offering was larger, compared to the previous season there has been 9549 fewer bales put through the auction system, a reduction of 2.9pc."
But Mr Plunkett said despite the losses of this week, after rising for the last three series, the EMI recorded a positive movement of 67c for the month and it is still almost 60c above the level of a fortnight ago.
This was a monthly increase of 7.2pc, the largest monthly rise in the EMI since September last year.
But the current challenge for the wool market, according to Nutrien Ag Solutions southern NSW wool manager, Craig Lawson, are the high mid-breaks in wools which were caused by the break in the season in February and March this year.
"This is especially in the 18.5-micron types, the strengths are down and the high mid-breaks we are encountering are becoming excessive and this is where the discounts are getting greater," Mr Lawson said.
"That is not going to change until we get closer to Christmas because we are right in the middle of them now.
"We are getting 100pc mid-breaks with staple strengths of 21 to 29 newtons per kilotex (N/ktex) and there are just too many of them."
The main cause of tender wool is a large fluctuation in wool growth caused by differing feed availability and quality throughout the year.
Mr Lawson said a lot of people spent a lot of money on feeding stock hoping that they would dodge that break, but unfortunately when they went from not a lot of feed to a good little green pick, Merino sheep doing excessively well on that will break the fibre.
"It wouldn't matter what supplementary feed you give them, that green nourishment is not going to compensate," Mr Lawson said.
And with the good season comes an increase in staple length.
Mr Lawson said there are a lot of wool lines coming in at 120mm long.
"It's only 12-month's growth, but they are actually too long," he said.
"At the moment they are copping small discounts, but I anticipate those discounts to increase as more quantities enter the market.
"All of a sudden you are getting an oversupply of those and the discount will get greater. The market can only handle so much of them."
Next week the offering increases again with 34,450 bales on offer nationally.
