Strong start for first wool sale of year

Strong start for first wool sale of year

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Australian Wool Network auctioneer Stephen 'Squizzy' Squire selling the first fleece catalogue of the year at the Western Wool Centre.

Australian Wool Network auctioneer Stephen 'Squizzy' Squire selling the first fleece catalogue of the year at the Western Wool Centre.

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The wool market hanging on to end-of-year gains from December was seen as a likely good outcome.

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WOOL buyers found their voice for the return of open-cry live auctions at the Western Wool Centre (WWC) last week, following the annual three-week Christmas and new year recess.

They also found sufficient orders and lines of credit sturdy enough to survive a strengthening Australian dollar and to carry them right through to the end of a staggered-start trifecta of auction days nationally, with the WWC trading only on the last two days.

Once Australian Wool Exchange (AWEX) Melbourne and Sydney centres opened first last week and hung onto gains made in the final pre-Christmas sales, wool brokers were confident of a solid first day at the WWC.

At that stage, the wool market hanging on to end-of-year gains from December was seen as a likely good outcome.

But when the WWC opened strongly and momentum built gradually through the day at all three centres, it was widely assumed the market would soften on the third day when only the WWC and Melbourne centre traded.

Once the main Melbourne centre closed three hours ahead of the WWC, on the WWC's second day while fleece lots were being sold, that would be the turning point, the pundits predicted.

By then, buyers would have either filled orders already or run out of money, they predicted.

But neither scenario proved accurate.

"Everyone expected the (WWC fleece) market to soften on the second day, but the exact opposite happened," said Dyson Jones Wool Marketing Services broker and auctioneer Lyndon Hosking who sold the last wool catalogue of the opening week.

"Instead of softening, it got firmer right to the end."

To prove Mr Hosking's point, the three highest prices bid in the opening week at the WWC were all for lots in the Dyson Jones catalogue.

Admittedly, fine wool was in demand last week and the Nutrien catalogue on the WWC's opening day and the Dyson Jones catalogue at the end of the second day were the only ones listing Australian Superfine lots.

A bidding war between Alan Brown, buying for Chinese-controlled Meliwa Pty Ltd, and Gavin O'Dwyer, buying for local trader Westcoast Wool & Livestock, pushed the week's top price to 2281 cents per kilogram greasy (3120c/kg clean) for a single-bale lot of 14.6 micron Australian Superfine wool.

Yielding 73.1 per cent, the Superfine wool had specifications of 96 millimetre staple length, 40N/kt staple strength and only 0.3pc vegetable matter.

Mr Brown claimed that one, but Mr O'Dwyer claimed the second top-priced lot at 2118c/kg (3199c/kg clean) for a bale of slightly shorter 14.5 micron wool yielding 66.2pc.

Those two lots were the first time for more than a year bidding at the WWC has gone past 2100c/kg - the next highest price was 2066c/kg, back in week 48 of the previous season, last May.

The third top-priced lot of 14.7 micron wool with 72mm staple length, 29N/kt and yielding 61.4pc went to Mr Brown for 1899c/kg (3093c/kg clean).

All three lots carried the Mumballview stencil of Australian Superfine Woolgrower Association member and national wool competition entrant Jim Pepper, Mumballup.

Mr Hosking auctioned seven bales of Mumballview wool in the Dyson Jones catalogue last week for an average return of $2614 per bale.

On the opening day in the Nutrien fleece catalogue Mr O'Dwyer bid up to 1801c/kg - the highest of the day - for a 10-bale lot of 14.7 micron, 73mm, 31N/kt Merino fleece wool yielding 62.2pc under the Teranda brand of Terry Smith, Bremer Bay.

Mr O'Dwyer, Mr Brown and most of the other buyers were chasing the finer, knitting-type wools for export.

Stephen 'Squizzy' Squire, who auctioned the WWC's first fleece catalogue of the year for Australian Wool Network (AWN), noted extra interest in finer lots right from the start.

"Anything under 18 micron was strong as, especially right down to 15 and 16 (microns) - marvellous money really," Mr Squire said after leaving the sale room lectern.

"Considering the (Australian) dollar is up (and the) big offerings, we couldn't have hoped for a better opening.

"We had a 100 per cent clearance on the fleece and great wide-spread competition."

Mr Squire's boss, AWN's state wool manager Greg Tilbrook, who sat in on the auction, said buyers "jumped on anything 18 microns or less - it didn't matter whether it was tender or had mid break, they were after it".

The oddments sector was particularly strong.

Brad Faithfull, who auctioned Westcoast's skirtings and oddments lots early on the second day of WWC trading, admitted the sustained strength was somewhat unexpected.

"It was an extremely good strong opening to the wool market today," Mr Faithfull said.

"Obviously, with currency being a lot stronger than where it was when the market closed in December, one might have thought it would be slightly cheaper, but it's sort of done the reverse.

"This indicates a very strong appetite for wool with prices quoted up a little bit again today, but the real thrust is for the finer microns."

In his AWEX market report WWC technical controller Andrew Rickwood also pointed out first trading week market strength was despite a "continual strengthening of the Australian dollar since the previous sale".

Mr Rickwood said at the close of WWC trading in December, the Australian dollar was worth US75.52 cents.

By the close of WWC trading last week it was approaching US78c in value and, as Australian wool exports are paid for in US dollars, this made wool bought last week a more expensive commodity for Chinese processors and textile mills than wool bought in December.

Prices also strengthened despite a forecast flood of wool onto the local and national markets after the recess.

In the end, 952 bales of fleece wool - 13pc of the WWC opening week fleece offering - were withdrawn and a total of 10,549 bales went under the hammer.

Of those, 9531 sold, so the first week's pass-in rate at the WWC was a respectable 9.7pc.

Micron price guide increases for the week ranged from 4c (to 1319c/kg) for 19.5 micron fleece to 43c (to 1627c/kg) for 18 micron fleece.

Merino cardings added 53c to finish at 829c/kg.

The Western Indicator put on 24c to finish the week at 1222c/kg, in comparison to the benchmark Eastern Market Index which added 15c to finish at 1172c/kg.

On the first-day WWC buyers list national trader Techwool Trading was a clear leader, ahead of local traders PJ Morris Wool and Westcoast.

On the second day Techwool just pipped Morris for top spot, with Chinese-controlled Lempriere (Australia) third.

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