Wool market report with Marty Moses

Wool prices increase by 15c/kg at auction

The Australian Wool Exchange Eastern Market Indicator closed on 1172c/kg, which was up 15c at auction sales.

According to Moses and Son principal, Marty Moses the first scheduled auction sale of the New Year delivered generally positive news for woolgrowers after a disappointing close to the 2020 season back in December.

In USD, the EMI rose to 907c - up 33c on the December 16 close with the AUD closing the sale week on 77.41c - up 1.89c.

The return of sales after the three week recess saw the offering climb to 52,290 bales, of which 89.9 per cent was cleared to the trade with the highest pass in rates experienced in the crossbred and carding sectors.

Merino Fleece opened with positive buyer sentiment on Tuesday, and momentum continued into Wednesday's sale resulting in the 19-18.5 fleece types attracting a price increase of 11-61c with the finest end the best performers. 19-21 showed good support but came under some pressure on the final selling day in Melbourne giving back the previous day's rises. There was noticeable urgency from exporters on the prem wool lots offered which I assume are heading straight for the Chinese Knitwear sector.

Merino Skirtings followed the fleece's lead, however with the increase volume on offer, buyers were more selective on their purchases and lots with high VM and heavy colour came under pressure.

Crossbreds shearing season is in full swing and represented 1/4 of the national offering, and remarkably prices held up ok on the best prepared and styled lots, however buyers were cautious of the lots from some composite breeds which were unclassed and not skirted or were poorly skirted. The coarser end of the crossbreds are still extremely depressed.

Merino Cardings were also keenly chased by exporters and local processors adding an average 38c across the three centres. Crossbred oddments remain poorly supported especially the coarser end of the range.

Next week's sale resumes with 49,140 bales on offer, and the increase in the past two offerings have been a combination of the three week recess and a reflection of the national issue with delayed shearing. COVID 19 border restrictions have curtailed travel from many NZ shearing teams that make the trip across the ditch each season as well as the trans-border migration of the shearing teams.

While the positive start to the wool market is encouraging, one market result does not constitute a trend and like everyone in the industry, we hope and pray daily for a miracle that may restore prices to pre COVID levels. With the northern hemisphere under enormous pressure from escalating cases and deaths from the pandemic, I cannot see a fundamental shift in the Chinese buying strategy which has been stop buying out when it rises and buy when it falls. One can only hope a positive change is coming in 2021.