Wool supply slips, prices firm

And in a market of tight supply, it is the broader and Italian microns that have proven the strongest performers.

The Australian Wool Exchange Eastern Market Indicator (EMI) had been on an 11-day crawl without loss, but pulled up just short of 1300 cents a kilogram, dropping 1c/kg overall to finish the week at 1296c/kg.

AWEX reported just over 34,000 bales were offered nationally during the week, making it the second smallest three-centre offering for the season.

AWEX markets information manager Lionel Plunkett said prices reflected tight supply.

“It’s this time of the year too. Supply is a concern that is always in the forefront of buyers minds - as is price - and that’s probably been the catalyst here for what we’re seeing

“We had a bit of a softening this week obviously, but broader microns, and Italian microns, are doing very well because there’s very few of them about.”

There was talk in some regions that grower’s shearing schedules being brought forward to capitalise on the strong prices.

But Mr Plunkett said, if anything, any early cuts were and will probably be made by those feeling the pinch of a dry summer and autumn, as opposed to those looking to capitalise on the market.

“Some people will also hold their wool up and sell in the new financial year, for tax considerations,” he said.

“This time last year we saw a fair bit of extra wool flushed out, even older wool

“But anecdotally there’s not a lot sitting around in storage.

“If we saw a similar spike in price to last year there just wouldn’t be the supply.”

Landmark Boorowa agent Simon Flick agreed low supply was the main market driver, while Elders New England wool agent John Newsome said the northern NSW market was solid for 19-, 20-, and 21-micron gradings.

Mr Newsome said sub-15 microns were pushing up to 2000c/kg.

“There’s still more room in the market for sub-18s to improve too,” Mr Newsome said.

“The market definitely feels as tough if it’s peaking at the moment. But if volume drops we could see it go up again.”

Landmark's southern NSW wool manager Craig Lawson, meanwhile, has just returned from a 10-day industry tour of China.  

“The scourers are telling us there’s not an abundance of greasy wool there, it’s flowing through the system pretty consistently,” he said. 

“The mills are comfortable getting $US1000c/kg for 21-micron - about 1340c/kg – and they seem to be pretty satisfied with that.”

A STABLE, grower-friendly wool market is one of three pieces of fortune that has aligned for grower Bill Hurley, with a low Australian dollar, and a bounce in lamb prices proving a triple treat at at "Killanear", Boorowa. 

Mr Hurley, who runs 1250 Merino ewes and the same number of lambs, said he would bring his shearing schedule forward a week in order to make the wool selling season in Sydney – which he hopes will also intersect perfectly with peak prices. 

“(Wool prices are) pretty red hot at the moment, but more than that – it’s been very stable,” Mr Hurley said. 

“They’ve plateaued out for the past month and a bit at a high level, a very acceptable level for a grower.

“It’s given people a bit of confidence.” 

Mr Hurely said the same market 12 months ago was similarly strong, but proved more unstable, with prices peaking and falling rapidly.

“It was very simliar - but also very volatile – it was changing by 50 to 60 cents a week and was very hard to pick,” he said.

“This time it’s easier to rely on.” 

He said a run of warm weather had helped. 

“We haven’t had many frosts, the weather has been very kind, and the dollar has done the right thing by us too. 72 cents is always good. It’s sort of come together nicely.”

Mr Hurley said he was aiming for 19-microns and finer with a 6.5 to 7kg average across his flock.  

He’s also hoping the Merino lamb market stays strong.

“They usually do peak around this time of year, which would be pretty handy for us too.”