Buyers seek fibre to keep operations going - buoyed by favorable currency conditions

Mills need wool on machines

Sheep
More wool is flowing on to the market and signs early in the week from the online selling system indicated buyers are able to keep up at this stage.

More wool is flowing on to the market and signs early in the week from the online selling system indicated buyers are able to keep up at this stage.

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Favourable currency movements and relatively cheap wool have enticed overseas mills into the market

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A rise in the wool market last week saw wool buyers and exporters flow back online to the AuctionsPlus Offer Board.

A favourable US to Australian Dollar exchange rate, coupled with relatively cheap wool, enticed overseas mills into the market.

Global wool trading conditions are still being directly impacted by COVID-19 and will continue to be until a vaccine is widely available.

But mills need to put wool on to machines and have not seen prices at these levels for years.

The market upswing last week was reflected by the Australian Wool Exchange Eastern Market Indicator (EMI) gaining 20 cents a kilogram on Tuesday, and putting on a further 6c/kg on Wednesday - to close at 1022c/kg. This was US727c/kg.

In the western region, the indicator gained 30c/kg to finish the week at 1054c/kg.

Online, the AuctionsPlus Offer Board saw plenty of buyer inquiry and 506 bales sold over the seven days.

Lines of 15 and 17-micron fleece wool sold up to 1252c/kg and 1126c/kg (greasy), or 1844c/kg and 1604c/kg (clean).

For 18 and 19-micron fleece wool, values were up to 1040c/kg and 853c/kg (greasy), or 1417c/kg and 1208c/kg (clean).

The top price lot online this week was for 16.1-micron AAA Merino superfine fleece wool.

It had a very low vegetable matter of 0.2 per cent, was 84 millimetres in staple length, was offered by Elders Melbourne and branded EML/Glenholme and sold for 1283c/kg (greasy), or 1765c/kg (clean).

Looking ahead, there has been strong inquiry this week on the AuctionsPlus Offer Board and reports suggest the market may have found a base to work from for buyers and brokers.

At this week's physical auction sales, there were an estimated 30,000 bales offered at Sydney, Melbourne and Fremantle - and similar volumes are likely to be offered in the coming weeks.

The increased supply did see many in the trade question how the market would take the larger offering, but it appears the overseas mills are still keen to buy.

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