Bale offering double that of this time last year

Bale offering double that of this time last year

Sheep
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Bale offering double that of this time last year

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NINE weeks out from the end of the current wool season, the number of wool bales listed for auction this week is more than double what was offered in the corresponding week last season.

The national listing, a total of individual Australian Wool Exchange (AWEX) selling centre listings for week 44 - this week - more than anything, indicates the impact COVID-19 had on the wool industry at the end of last season.

This week, the national wool auctions listing is 50,821 bales, 27,917 more bales than was actually offered in week 44 last season - a potential 121 per cent increase year-on-year.

The Western Wool Centre (WWC) is listing 11,042 of those bales this week, 5651 more than it offered in week 44 last year - a potential 105 per cent year-on-year increase.

But the WWC's is the smallest potential offering increase across the three AWEX auction centres, when compared to last year.

Projected offerings at AWEX's Eastern States' centres are 27,286 bales in Melbourne - a potential 118pc year-on-year increase requiring three trading days to auction - and 12,493 bales in Sydney - a potential 150pc year-on-year increase.

Up until the end of last week, a national total of 1.34 million bales has been offered at the three centres so far this season, an increase of 79,240 bales or 6.3pc over the same period last season, according to AWEX.

The Sydney centre has the biggest cumulative year-on-year offering increase with 9.1pc, followed by Melbourne at 7.4pc and then the WWC with 0.1pc - ahead by just 285 bales so far this season.

Despite the massive potential year-on-year offering increases this week, AWEX statistics show week 44 last season was not the smallest national wool offering.

Weeks 42, 49 and 51 last year were smaller.

But the statistics do show this week's total auctions listing is unusually large for this time of year.

In past seasons, volumes of wool on offer in the AWEX live auction system are normally beginning to taper off going into May and June, as mixed farmers concentrate more on cropping operations of seeding and spraying.

Opinions vary on whether this week's larger offering is due to COVID-19 delays - there is still some annual shearings happening - whether it is down to some woolgrowers still having last year's clip in the shed or whether due to brokers attempting to clear stockpiles of lesser specification wool built up over the past 12 months when buyers were pedantic about spec and cautious in bidding.

Whatever the reason, this week's national offering is listed to be the biggest since January's week 29 offering, first week back after the annual Christmas and new year auctions recess which, at 52,290 bales, was the biggest so far this season, according to AWEX.

The only other time this season the national offering has exceeded 50,000 bales was week 35 at the end of February.

Despite only a tiny cumulative offering increase compared to Melbourne and Sydney so far this season, the WWC's listed offering for this week is its biggest since before COVID-19.

The last time more than 11,000 bales were actually offered for auction in a week at the WWC was week 37 last season, March 11 and 12 last year.

At that time wool prices were on the slide because of uncertainty about the impact of COVID-19, with the Western Indicator (WI) starting the week at 1662 cents per kilogram clean and finishing at 1616c/kg.

Last week the WI finished up 11c at 1329c/kg after all micron price guides rose strongly on the first trading day then, apart from the 18.5 micron guide and Merino cardings guide, gave back most of the rises on the second day.

Local trader PJ Morris and national trader Techwool Trading swapped top and second positions on the WWC buyers lists over the two trading days and were joined in third place by Chinese indent buyer Tianyu and local trader Westcoast Wool & Livestock.

The WWC's auctions offering last week was also initially listed to be more than 11,000 bales, with a total of 5032 listed the first trading day by Wool Agency, Elders, Australian Wool Network (AWN) and Westcoast and a total of 6033 bales listed for the second day by Nutrien Ag Solutions and Dyson Jones Wool Marketing Services.

But after 286 Merino fleece bales listed for the first day and 833 listed for the second day and 19 oddments bales listed for the first day and 251 listed for the second day, were withdrawn before the auctions, the actual WWC offering ended up at 9697 bales.

Of those, 8642 were sold.

As reported in Farm Weekly recently, wool buyers have complained about brokers' tactics in nominating large listings for auction on a particular week, then withdrawing a number of lots immediately before the auction.

This has the potential to throw buyers' plans into confusion when some of the catalogue listings they have earmarked to bid on for specific orders, are withdrawn at the last minute.

The brokers' aim of course, is to induce buyers to bid up by increasing competition for the remaining lots on offer.

This week's WWC offering is more evenly distributed across the two trading days, with a total of 5650 bales listed by AWN, Elders and Westcoast for the first day and 5392 listed by Dyson Jones, Nutrien and Wool Agency for the second day.

Because of the Anzac Day public holiday and to prevent the Melbourne centre trading on its own on the last of three days, trading days at the WWC this week have been moved back a day.

- Turnover from AWEX wool auctions this season compared to last season indicates how complex COVID-19 has made direct trading comparisons.

National turnover from wool auctions last week was $54.77 million, compared to just $28.76m for the corresponding week 43 last season, according to AWEX.

But better wool prices in the first half of last season - until the virus began impacting trade - meant that despite higher wool volumes this season, the cumulative $1.635 billion wool auctions turnover so far (July-April) trails the $1.756b turnover for the same period last season.

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