Wool market update

The Australian wool market has returned from the annual three week mid year strongly, rises in the merino fleece sector pushing the market higher.

Although shearing activity is slow in some areas, as growers continue with their yearly cropping programs and wet weather preventing shearing in other parts, some wool growing regions are in full swing.

With this the first selling opportunity in nearly a month, this is traditionally one of the larger sales of the season. There were 41,303 bales available to the trade. This was the largest sale since Week 42 last season, which was in April just before the Easter recess.

The benchmark Eastern Market Indicator (EMI) added 8 cents for the series, closing the week at 1,247 cents. The rise was largely on the back of merino fleece types.

The EMI has continued its upward run, the 2 cent rise recorded on the second day of this series was the eighth consecutive daily rises in the EMI. The run started on 8 July. The EMI rising by 39 cents across this period, an increase of 3.2 per cent.

The EMI is now at its highest point since April.

We cannot escape this week without talking about currency. Much of the positive movement this series can be attributed to the weakening of the Australian dollar (AUD) compared to the US dollar (USD), since the close of the previous series. The AUD has dropped 1.24 cents since 23 July, giving exporters more buying power in USD, which in turn led to higher prices.

The news was not so positive when viewed in USD terms. The EMI fell by 10 US cents for the week, closing at 804 cents.

Next week’s offering falls dramatically, as the backlog of wool accumulated during the recess, was mostly offered in this week’s sale. There is currently a total of 30,596 bales on offer nationally.