Australian wool market closes 0.5% higher
Australian Wool Industries Secretariat Inc (AWIS) releases wool sale report for the week ending March 9. The Australian Wool Exchange (AWEX) Regional Indicators finished 0.5% higher, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 1.5%.
This week was the last week of a four week trial in which all centres commence selling on Tuesday (except when there is a Public Holiday, as in the West this week). Sydney and Melbourne sold over three days and Fremantle over one.
The market was one of two parts this week – a subdued start to the week on Tuesday and Wednesday, followed by a strong finish on Thursday, particularly around 21 microns. History suggests that the slower start to the week would have been influenced by the reduction in global economic confidence that was associated with further concerns about the latest Greek “bale-out”. These concerns led to the fall in the US exchange rate and in global share markets during the week.
In other countries, the South African Cape Wools Indicator was up by 0.6% on Wednesday since last week against a 2.3% depreciation of the Rand against the US Dollar and a 0.2% appreciation against the Euro. New Zealand prices were up by around 1% in New Zealand terms but down slightly in US Terms.
In other fibres, May futures for cotton in the United States were virtually unchanged from the previous Friday at 88.25 US¢ per pound.
49,723 bales were on offer, compared with 47,102 bales last week. 11.6% were passed in, comprised of 9.9% in Sydney, 11.2% in Melbourne and 15.6% in Fremantle. Pass-in rates for Merino fleece and skirtings were 11.0% and 14.8%, respectively.
The national pass-in rate fell from 14.2% on Wednesday to 6.4% on Thursday. 42,574 bales were cleared to the trade. The year-to-date offering is 38,834 bales less (-2.8%) than at the end of the same week last year.
The widespread floods in New South Wales and North Eastern Victoria will cause delays to shearing in many areas, which seem certain to affect auction offerings for some weeks. The impact may be already apparent with current estimates for the next three weeks all behind the same week last year and less than current offerings.
The US exchange rate (Reserve Bank) fell sharply this week in a familiar response to further queries about the likely success of the current Greek 'bale-out” plan. The resulting decline in global economic confidence again led to a movement of currency from Australia to the so called “safe haven” such as the United States, Switzerland and Japan. The Chinese announcement on Tuesday that it had reduced its expected economic growth to 7.5% for this year added a negative component to the US exchange rate.
Fine wool Merino average AWEX Micron Price Guide (MPGs) eased in Sydney on Tuesday after the previous week's Newcastle sale. Overall, the average AWEX Micron Price Guide (MPGs) for the week were down at the fine end and up from 19 to 22 microns, with the greatest gains at 21 microns. As reported above, this was driven by strong demand on Thursday.