Strong European interest bolsters market

Strong European interest helps boost Australian wool market

Sheep
Some woolgrowers will be expecting a supply strain to boost prices in the future, and may be holding off for this to happen.

Some woolgrowers will be expecting a supply strain to boost prices in the future, and may be holding off for this to happen.

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To the shock of many observers, wool prices rose across the board at last week's auctions.

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To the shock of many observers, wool prices rose across the board at last week's auctions.

With the full extent and damages of the coronavirus on global economies yet to be quantified, many predicted uncertainty to plague auction results.

Australian Wool Innovation reported that strong European interest, as well as large volume buying from a Chinese top maker helped boost the market.

Consequently, the Eastern Market Indicator finished the week up 1.9 per cent or 29 cents a kilogram to total 1557c/kg. In US dollar terms, the EMI pushed up 2.1pc or 23c/kg to close at 1066c/kg.

The 17-micron wool out of Melbourne saw the greatest leap in price, with a 74c/kg rise to close at 2078c/kg.

Online activity rose marginally, with 65 bales selling on AuctionsPlus, compared to the previous week's 28 bales. 16 and 17-micron fleece wool sold to a top of 1410c/kg and 1590c/kg (greasy) or 2064c/kg and 2078c/kg (clean). 18 and 19-micron fleece wool sold up to 1460c/kg and 1330c/kg (greasy), or 1962c/kg and 1710c/kg (clean), while 20 and 21-micron fleece wool sold up to 1204c/kg and 821c/kg (greasy), or 1661c/kg and 1616c/kg (clean).

The top priced lot online was a line of 17.3-micron, AAAM Merino fleece wool. This lot was offered by Elders Melbourne, branded B/H IN A BOX, selling for 1590c/kg (greasy).

Early in the week, the Australian dollar weakened against the US dollar due to fears of the Asian region coming under economic pressure. This helped to initially boost buying activity.

The European top maker forced prices higher for the better wool types, with confident buying resulting in higher limits.

Once again, high withdraw and passed-in rates suggest many growers are still not happy with current prices, and are willing to wait until such time as the price appreciates.

Next week will see 43,000 bales offered for auction.

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