Market calms after dramatic price gyrations

Wool market calms after dramatic price gyrations

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This week will see another relatively large offering of about 40,000 bales nationally, and due to the Monday public holiday, only two days of sales will be held.

This week will see another relatively large offering of about 40,000 bales nationally, and due to the Monday public holiday, only two days of sales will be held.

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The Eastern Market Indicator fell 33 cents a kilogram to finish the week at 1576c/kg, down 2.05 per cent.

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It was a comparatively calmer environment in the wool market last week, contrasting the previous week's dramatic price movements.

The Eastern Market Indicator fell 33 cents a kilogram to finish the week at 1576c/kg, down 2.05 per cent.

In US dollar terms this equates to 1082c/kg. With the EMI dropping by 2.6pc in US dollar terms, overseas interest may improve as prices remain comparatively cheap.

The 19-micron wool out of Fremantle was the only category that held its ground, sitting at 1795c/kg, up 1c/kg on last week.

Online activity was much weaker this week, seeing 231 bales sell on AuctionsPlus, compared to the 3700 the week before.

The 15 and 16-micron fleece wool sold to a top of 1506c/kg and 1700c/kg (greasy) or 2372c/kg and 2304c/kg (clean).

The 17 and 18-micron fleece wool sold up to 1600c/kg and 1328c/kg (greasy), or 1600c/kg and 1863c/kg (clean), while 19 and 20-micron fleece wool sold up to 1125c/kg and 1283c/kg (greasy), or 1616c/kg and 1283c/kg (clean).

The top priced lot online was a line of 16.5-micron, SUPER AAAA Merino fleece wool. This lot was offered by Elders, branded DF/CROYE, selling for 1700c/kg (greasy) or 2304c/kg (clean).

Looking back to the live auctions, passed-in rates were once again higher, with 15.9pc of the offering failing to sell.

Growers would have a good idea of where prices should be in relation to the current supply issues. It had been reported that the lower prices brought interest at a processor level out of China and Europe.

Markets have taken a hit globally in response to the outbreak of the Coronavirus in China, which will no doubt have a flow-on effect regarding wool prices.

This coupled with China being essentially in a shutdown period due to the Lunar New year celebrations, may act to further increase passed-in rates and hamper demand.

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