The return of wool sales after the Christmas recess saw more than 50,000 bales offered but the Eastern Market Indicator ultimately ended up at a comparable level to the final selling week of 2023.
The EMI finished out the week 1213c/kg, just 1c up on the last week before the recess, with strong gains in the 17.5 micron and finer super fine and ultra fine Merino sectors tempered by price drifts of 15c of more in broader Merino fleece wools.
Southern Aurora Markets partner Mike Avery said with relatively few growers taking up hedging opportunities, there could be some "bumpy" weeks ahead.
"We sort of had optimism and that optimism was backed up by how people were pricing the forward market," he said.
"When we went in Tuesday's sale people were bidding out to June flat to cash... so they're happy to take stock at that level and then Tuesday's market probably looked a little bit better than it was.
"They were bidding there fairly strongly which indicated we'd have a good sale... it was a little weaker on the last Thursday sale before Christmas and it opened and made that ground back on Tuesday.
"Everyone thought that optimism has been vindicated so we'll bid out again into the future fairly strongly... didn't get any response from growers at all on that, which was probably the optimism was there on their side and the market fell back."
Mr Avery said a combination of factors including pent up stock and the upcoming China processor shutdowns during Chinese New Year could make the next few selling weeks challenging.
"I think we've got 50 odd thousand for sale again this week... for the market to hold at those levels without very good demand signals is very tough and I think that's what we're in for the next three or four weeks until we get through the Chinese New Year," he said.
"In general I think it's very hard to predict where the market is going to go and that's always the toughest part of being a trader, but from an historical level, we think the overall supply and demand balance isn't bad.
"We've just got to work through this bumpy period of, really a lack of confidence in all countries and all walks of life.
"The cost of living challenges are there and textiles can be put on the backburner in those situations.
"The optimists say it will all be better after Easter... I think it's going to be better but putting a timeline on that is just too hard."
Mr Avery said the pass in rate last week had been low at under 10 per cent the first two days, and 10pc the final day.
"People are accepting the price in the market place which means people require cash but there hasn't been any movement in the forwards to sort of insulate that," he said.
"If we were to drop 50c or 60c in the next month and people are in a position where they need to sell again, they haven't taken any insurance out against that.
"It just seems a bit unusual that the volumes are so light on the forward market when the passed in rate is also low."
Victoria Nugent
National sheep and wool writer for ACM's agricultural publications. Former livestock editor for Queensland Country Life. Send your story tips to vnugent@austcommunitymedia.com.au
National sheep and wool writer for ACM's agricultural publications. Former livestock editor for Queensland Country Life. Send your story tips to vnugent@austcommunitymedia.com.au
