Weekly Wool Prices

Week Ending July 6 (Week 01)

9 July 2012

The AWEX Regional Indicators finished 0.1% higher, on average at the first sales of the new season in Sydney and Melbourne this week when the US exchange rate rose by 1.5%. The EMI was up by 1.6% (17¢) in US currency.

Next week’s sale will be the last prior to the mid-year three week break.

The market opened on a mixed basis in Australian currency on Wednesday, with gains in most Southern Indicators and falls just outnumbering gains in the North. The movement in prices was more subdued than in the two previous sales, but was much stronger than in the sales from the mid-May to mid-June. Keen demand for 22 and 23 micron wool in the Melbourne resulted in rises of 13¢ and 17¢ respectively in their AWEX MPGs. When looked at in US currency, the EMI was up by 20¢ since the previous Thursday.

The market was much the same on Thursday, with the EMI unchanged; and the Northern and Southern Indicators finishing within 1¢ of Wednesday’s closing values. The EMI eased by 3¢ in US currency.

The more subdued note to prices led to a small increase in pass-in rates.

When compared with last season, the EMI was 282¢ (-20.8%) less than in Week 01 last year.

In other countries, there was no sales in either South Africa or New Zealand this Week. New Zealand will be selling again next week.

Among other fibres, December Futures for cotton rose mid-week, but fell to 70.62 US¢ by Friday, down by 1.0% for the week.

Centre Last Sale Day-to-Day Changes (Week 01) Sale-to-Sale Change Closing Indicator Sale-to-Sale Changes
Week Indicator Tuesday Wednesday Thursday US ¢ Euro ¢
Eastern 521076No Sale+10+1 (+0.1%)1077+17+12
Northern 521089No Sale-1+10 (0.0%)1089+16+11
Southern 521066No Sale+3-1+2 (+0.2%)1068+18+13
Western 521096No SaleNo SaleNo Sale    

32,526 bales were on offer, compared with 34,068 bales at the last sale (when all three regions sold). 6.0% were passed in, comprised of 6.0% in Sydney and 5.9% in Melbourne. Pass-in rates for Merino fleece and skirtings were 6.1% and 5.5%, respectively.

30,589 bales were cleared to the trade.

This week’s opening sale was well down (-6,842 bales) on the same sale last year, when the market was still up and growers were keen to sell all available wool. Next week’s sale is expected to be around 49,000, 17,000 bales more than this week, but still well down on the same sale last year.

The US exchange rate rose sharply at the beginning of the week after the positive news from the latest EU Finance Summit. There were indications of agreement among the EU Member Nations about the way forward, including the creation of a more centralised financial control mechanism. The exchange rate continued to rise during the week after the Reserve Bank left the Cash Rate unchanged, good domestic retail data and the expectation of a further cut in Chinese interest rates.

The US exchange rate is at its highest level since early May, when it fell back to under 98¢ following the inability of the Greek parliamentary parties to form a Government that created the need for a second election.

Exchange Rates
(Reserve Bank)
Last Sale Day-to-Day Changes Sale-to-Sale
Closing Value Season Min & Max
Monday Tuesday Wednesday Thursday Min Max
United States 101.18+1.09+0.43+0.25-0.28+1.49 (+1.5%)102.6795.00110.55
Euro 80.87+0.16+0.45+0.27+0.16+1.04 (+1.3%)81.9171.5082.27

Sale-to-Sale Changes in Average AWEX Merino Micron Price Guides (MPGs)
Micron 16.5 17.0 17.5 18.0 18.5 19.0 19.5 20.0 21.0 22.0 23.0 24.0
Since Last Sale:
Change ¢ +11+12-3-110-8-11-8-9+9+9+5
Change % +0.7%+0.8%-0.2%-0.8%0.0%-0.6%-0.9%-0.6%-0.7%+0.7%+0.8%+0.4%
Since Start of the Season:
Change ¢ 000000000000
Change % 0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%
Since Same Week Last Year:
Change ¢  -922-792-647-488-379-309-253-199-161-58 
Change %  -31.9%-36.3%-32.7%-27.3%-22.9%-19.8%-17.0%-14.9%-11.6-4.6% 

It was another very good week for skirtings types also, with prices moving up sharply on both days. The good demand was reflected in the lowest pass-in rate (5.5%) in recent weeks.

Crossbred wool price movements were similar to those seen among the Merino wools.

Oddments, overall, were little different to last week, but experienced some ups and some downs in prices during the week.

Sale-to-Sale Changes in Other Average AWEX Price Guides
Micron 25.0 26.0 28.0 30.0 32.0 MC#
Since Last Sale:
Change ¢  0-1-6-1+4
Change %  0.0%-0.2%-1.0%-0.2%+0.7%
Since Start of the Season:
Change ¢ 000000
Change % 0.0%0.0%0.0%0.0%0.0%0.0%
Since Same Week Last Year:
Change ¢  45-48-35-71-214
Change %  +5.1%-7.1-5.5%-12.6%-26.2%

# Average Merino Cardings Price Guide

Buyers for China were dominant this week, followed by strong support from buyers for Europe and India.

Highlights from the Australian Bureau of Statistics export data for April for the top five export destinations and three other key destinations follow.

Country % Share of Australia’s Wool Exports by Weight of Wool Shipped Year-on-Year % Change in Wool Exports
April 2012 July - April This Season July - April Last Season
China 79.2%75.6%75.0%-10.7%
India 5.6%6.6%7.3%-20.2%
Italy 2.9%5.2%5.3%-13.3%
Czech Republic 5.9%4.0%3.9%-10.1%
Taiwan 1.9%2.3%2.4%-14.6%
Korea 0.9%1.5%1.1%18.1%
Malaysia 0.5%1.0%0.7%35.8%
Thailand # 0.0%0.2%1.1%-79.9%
# Affected by Bangkok floods in October 2011 Change all Countries -11.3%

Sales will be held in Sydney, Melbourne and Fremantle next week, when 49,152 bales are currently rostered for sale, a 16.5% decrease when compared with the same sale last year.

Sales are in recess in South Africa until 15 August.