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Last sales before christmas witness dip in wool prices

Last sales before christmas witness dip in wool prices Source: www.chinatexnet.com
Date: 19-12-2012
Visits: 258
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he AWEX Regional Indicators finished 1.1% lower, on average, at the last sales before the Christmas break in Sydney, Melbourne and Fremantle this week.  The US exchange rate rose by 0.8% to move above 105¢ for the first time since the second half of August, holding the fall in US currency at -0.2%.

It was also the largest offering of the season, as grower’s responded to the 67¢ rise in the EMI over the two previous weeks.  The EMI moved from 1077¢ at the end of last season to 940¢ in the last week of September, before commencing its rise, which peaked at 1087¢ last week.

The market was likely to come under some pressure this week following the large rises of the two previous weeks, the softer finish at the end of last week, the size of the offering and the lift in the US exchange rate.

As such, the fall of 8¢ in the Southern Indicator on Tuesday was not a surprise.  The falls were greatest at 18 and 20 to 22 microns.  These wools had experienced some of the greatest gains in the previous week.  The market appeared to settle on Wednesday, when the Southern Indicator finished a further 1¢ lower for the day; while there were larger “catch-up” falls in the North and the West.

It was a more mixed market on Thursday, with overall small gains in the North, an easing in the South and a positive finish in the West, where the local Indicator moved up by 3¢ for the day.

All AWEX Merino MPGs were down for the week, other than the 24 MPG, which was up by 2.3%.  This Indicator had fallen by 6¢ over the two previous weeks when there were substantial rises in other average MPGs.

The EMI has finished the first half of the season 117¢ (-9.8%) less than in the same week last year and 2¢ (0.2%) higher than at the start of the season.  The WMI finished 102¢ (-8.5%) less than in the same week last year and 19¢ (1.8%) higher than at the start of the season.

In other countries, sales are in recess in South Africa until 9 January.  In New Zealand, Wool Services International quoted fine crossbred fleece as “fully firm” and coarse crossbred fleece as “firm to 1.5% cheaper”.

Among other fibres, cotton Futures rose during the week.  March Futures closed at 75.09 US¢ on Friday, down by 1.6% since the previous week.  July Futures closed at 76.88¢, up by 2.6%.

54,165 bales were on offer, compared with 45,688 bales last week.  9.4% were passed in, comprised of 9.1% in Sydney, 7.7% in Melbourne and 14.3% in Fremantle.  Pass-in rates for Merino fleece and skirtings were 10.6% and 11.3%, respectively.

49,084 bales were cleared to the trade.

The first half of the season finished with the year-to-date offering 21,317 bales less (-2.3%) than at the end of the first half last year.  The number of “first time offered” bales was 0.3% less than in the same period last year.

The New Zealand Merino Company also offered 1,125 bales in Melbourne on Tuesday of which 23.9% were passed in.

Exchange rates continued to move up this week.  This week’s upward movement appeared to be largely influenced by events in the United States, where Ben Bernanke announced an increase in “quantitative easing” (printing money).  Many financial analysts now expect further increases in the US exchange rate.

Skirtings prices eased early in the week, but finished on a firm note in the East.  Crossbred types eased on Tuesday (but were less affected than Merino types), eased again on Wednesday and moved up by small amounts on Thursday. 

The increases on Thursday were not enough to cancel out the falls earlier in the week.  It was a mixed week for oddments.  The average AWEX Merino Cardings Price Guide was down by 1.9% following rises of 3.2% and 5.7% in the two previous weeks.

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

Highlights from the Australian Bureau of Statistics export data for October, and for the July to October period for the top five export destinations and for three other key destinations follow.

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