Week 09 – September 2022

Wool prices lowered at this week’s Australian wool auctions. Subdued competition and lacklustre off shore demand were the key factors. Local traders backed off their intensity in purchasing and lowered risk, both in price and inventory as positive signals were not forthcoming from their overseas clients. It was left mainly to the indent operations from both Italy and China to absorb the majority of this week’s offering

Being a designated superfine sale in Sydney, there was a fair proportion of spinners and best top making types sub 19 micron for the European operators. Almost all of these lots were ultimately purchased by the Italian interests and in a majority of cases, the NM (non-mulesed) certified lots were highly sought and paid for, on top of the very healthy premium for the better processing quality of these types.  The forex rate of the Euro v AUD went a full percentage point to their advantage as well.

China’s largest three first stage processing top-makers were relatively quiet in their buying this week when compared to the normal percentages of their market share. This was noted by traders as a negative signal and in turn influenced the buying strategy of the trading buyers this week. Subsequently, prices fell consistently throughout selling but these same traders remained the key operators for the week and trying to manage forward positions profitably, run indents and to a lesser extent, careful stock accumulation.

By week’s end, most Merino types finer than 18.5micron were 40 to 60ac lower and the broader edge 5 to 10ac lower. Crossbreds sold comparatively well but still 5ac cheaper and cardings drifted 10ac down. Next week’s auctions are across two days of Tuesday/Wednesday with 37,000 bales.