A BREAK in wool sales at the Western Wool Centre (WWC) this week may be opportune if there is to be a positive finish to the current season, with only two more trading weeks to go.
Last week's WWC sales followed the same pattern as the previous week, with fleece prices falling across the micron spectrum on the first trading day, followed by prices stabilising on the second trading day.
This pattern of losses one day, consolidation the next over the past two weeks, leading to overall falls in the Western Market Indicator of 14 cents to 1490c per kilogram clean by the end of last week - down from a season high of 1515c/kg on May 18 - followed four weeks of solid price rises.
After last week's sales some wool brokers indicated they believed the WWC sales recess this week and another the week after next - weeks 49 and 51 in the 52-week selling program - might help rebuild demand for a traditional strong final sale of the financial year.
Prices at the Melbourne and Sydney selling centres last week had not slipped as much as corresponding prices at the WWC and those centres will trade this week while the WWC is closed.
There is therefore potential for wool prices, particularly in Melbourne, to pull further ahead of WWC prices this week to create a positive "catch-up" scenario at the WWC next week when sales resume, the brokers said.
Also, a lack of WWC sales this week may act as a "circuit breaker" on easing prices of the past two weeks, one broker pointed out.
Brokers and buyers received a major confidence boost last week when Chinese authorities lifted the COVID lockdown on Shanghai and operations at its port - the busiest container port in the world and gateway to Chinese wool processors for much of Western Australia's wool exports - returned to normal.
A massive backlog of shipping at anchor off the Chinese coast is expected to be cleared quickly now, reducing some of the delay in getting wool to processors.
As previously reported, WWC buyers are working on an extended eight-week delivery cycle because of shipping delays and wool bought last week is not expected to be delivered until early August.
Price falls across the fleece micron segments at the WWC last week ranged from 24c (to 1988c/kg for 18.5 micron wools) to 6c (to 1428c/kg for 20 microns wools).
The only fleece segment to go against the trend was 21 micron wools which had been in demand on the first trading day last week and held gains on the second to finish up 6c for the week at 1357c/kg.
Merino cardings experienced the biggest fall of the week, down 54c to finish at 954c/kg.
With no WWC sales this week the national wool offering is down to 33,095 bales, compared to 34,872 last week with three centres operating.
According to Australian Wool Exchange, annual turnover from open-cry wool auctions so far this season is currently $2.4 billion, with potential to pass $2.5b before the end of the season.
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