WA offering tops national price list

WA offering tops national price list

Wool
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Prices for finer WA wools held firm into the Easter break,

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PRICES for finer wools held firm into the Easter break, with the top greasy price nationally for the week recorded at the Western Wool Centre (WWC) on the last trading day of last week.

Normally in the lead up to Easter, or any other holiday period where the three Australian Wool Exchange (AWEX) auction centres remain closed for a week or more, wool prices generally are expected to tank across the board on the last trading day.

A long-held wool broker theory maintained that buyers do not want to hold wool they have bought over the holiday period, so they try to ensure orders are filled and dispatched before the last trading day ahead of a holiday.

But a new shipping problems-inspired theory put forward by brokers to explain last week's firm fine-wool market, has it that buyers were already holding so much wool they cannot get on ships to China, that a few more bales was not going to make any difference.

So they pounced on good wool when the opportunity arose.

It did at the WWC in the Wool Agency catalogue - the second last wool catalogue to be auctioned in Australia before Easter.

A 10-bale lot of 14.4 micron long weaner wool held over from a July shearing last year by Peter McDonald, PJ & R McDonald, Moora, attracted a winning bid of 2199 cents per kilogram (3287c/kg clean) and was knocked down to Alan Brown, WA buyer for Sydney-based Chinese-controlled exporter Meliwa Pty Ltd.

It was the top price paid for greasy wool nationally last week, beating the best of Melbourne and Sydney auctions, according to AWEX.

One of five PJ & R McDonald lots up for auction through Wool Agency, the top-priced wool had specifications of 94 millimetres staple length, 28N/kt staple strength, 66.7 per cent yield and 0.9pc vegetable matter (VM).

A second PJ & R McDonald lot - three bales of 14.1 micron, 73mm long, 20N/kt strong weaner wool yielding 62.6pc and with the same 0.9 VM, attracted bids up to 2034c/kg greasy, but was pipped for second top price nationally last week by a lot sold in Melbourne the same day.

Mr McDonald said he had hung onto the weaner wool because he was not prepared to accept what was being offered last year by buyers, but admitted he was surprised by the price it achieved.

"We certainly didn't think it would go for that much," Mr McDonald said.

"We usually try to sell some wool before Easter because the prices seem to be better.

"Who knows whether that's the right thing to do or not, Easter is often a turning point in the market - but obviously this year it was right," he said.

Mr McDonald said unfortunately he had to sell the sheep that produced the top-priced wool.

"Because of a lack of water last year we had to sell off our weaners, they would have been gone by August or September," he said.

Mr McDonald, who maintains a breeding flock of about 2200 ewes and still has the wool from his main shearing last month stored in the shed, said his normal fleece average was about 17 micron.

"That 14.4 micron wool was a reflection of the year, last year," he said.

Last week was only the second time this year a lot sold at the WWC has topped AWEX's daily national price list.

A two-bale specialty lot sold by Nutrien Ag Solutions at the WWC on Wednesday, January 20, for the a greasy price of 2407c/kg - also for 14.4 micron wool, but with statistics of 87mm, 25N/kt, 74.2pc yield and 0.3pc VM - also topped the daily national price list.

But that wool, produced by Narrikup woolgrower Chris Norton and bought by Fremantle Wool Trading Company, was beaten by a lot sold in Melbourne for top price of the week honours.

AWEX commentators Andrew Rickwood and Lionel Plunkett noted in their wool market report last week that Mr McDonald's lot topping the week nationally was "a rare occurrence" for WA wools.

The WWC fine wool market holding firm into Easter also went against the expected trend for a significantly larger national wool offering of 44,220 bales last week, although the WWC offering only increased by 156 bales over the previous week, to 9399 bales.

According to AWEX, the 224,217 bales offered for sale last month in the national auction system was the largest March offering in 10 years.

The passed-in rate at the WWC for the week was 12.7pc and the re-offer rate was 15.9pc - both more than 44pc and 50pc higher respectively than the equivalent rates at Melbourne and Sydney - reflecting recent sentiment that good specification wools will find buyers at the WWC, but poorer quality wools will continue to languish unwanted in the auction system.

Prices across all micron fleece sectors at the WWC increased on the first trading day last week, but Merino cardings returned to what they have done for most of this year, which is the exact opposite of the fleece market.

On the second trading day the mid and broader micron fleece segments handed back the previous day's gains, plus a little bit more, while Merino cardings turned their slide around and into a gain for the day.

The Western Indicator (WI) finished the week unchanged at 1346c/kg clean, while the 18 and 18.5 micron fleece indicators added 28c to 1823c/kg and 32c to 1701c/kg respectively for the week.

The remaining fleece indicators finished down between 6c for 19 micron and 12c for 20 micron wools for the week.

The strength of the fine wool market ahead of Easter and the fact the benchmark Eastern Market Indicator added 15c last week compared to the WI remaining unchanged, has WWC brokers talking about a solid market continuing next week, the first trading week back after an Easter recess this week.

"I think the degree to which the market was able to sustain firm pricing going into the Easter break has led to increased expectations for next week," said Australian Wool Network's State wool manager Greg Tilbrook.

Big offerings also seem set to continue next week, with the WWC currently scheduled to offer 10,650 bales, 1251 more than last week.

At this stage, the national offering is set to jump 6724 bales to a total of 50,944 bales next week, with the WWC and Sydney selling centre trading for two days, but the main Melbourne centre is returning to three days trading next week to handle the extra volume.

It is scheduled to trade on its own for a third day next week, which could set the scene for the WWC the following week.

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