The greater fall in the Western Market Indicator was again associated with a “catch up” following the break in sales in Fremantle last week. The ongoing global economic uncertainty associated with the Eurozone and Sunday’s elections in Greece; and its effect on confidence and demand was a major influence on the market this week.
Indicators were down across all Merino micron ranges and types on both selling days. The falls were larger than those of the two preceding weeks, but smaller than those seen during May. On the other hand crossbred prices hung on very well to finish the week with their average AWEX Micron Price Guides either unchanged or slightly up. This continues the overall better price performance seen in this sector this season.
The Eastern Market Indicator (EMI) and WMI have fallen by 116¢ (-9.9%) and 96¢ (-8.6%) respectively since wool, and other commodity prices, started falling in May. This was a result the announcement by the Greek political parties that they were unable to form a Government and the consequent negative impact on global economic certainty uncertainty.
However, the season average Eastern Market Indicator (EMI) and WMI remain above last year’s values as the end of the season is approaching. The average Eastern Market Indicator (EMI) is still 74¢ above the same period last year, while the WMI is 112¢ above the same period last year. Pass-in rates rose in response to the greater fall in the market.
In other countries, South African sales are in recess until mid-August. The Wool Services International coarse crossbred (36 – 39 microns) Indicator was down by 1 to 3% in New Zealand.
Among other fibres, cotton December Futures rose by 1.6% to 71.02 US ¢ per pound. 32,693 bales were on offer, compared with 27,601 bales last week (when only Sydney and Melbourne sold). 16.8% were passed in, comprised of 13.8% in Sydney, 14.2% in Melbourne and 26.5% in Fremantle. Pass-in rates for Merino fleece and skirtings were 19.6% and 14.8%, respectively. 27,188 bales were cleared to the trade.
The year-to-date offering is 37,941 bales less (-2.0%) than at the end of the same week last year. This figure is expected to remain virtually unchanged over the next two weeks when the current selling season finishes.
The US exchange rate was free of large fluctuations this week; and was virtually unchanged for the week, as the good economic data seen in Australia in the last week continued to overshadow the impact of the concerns in the Eurozone. The results of the Greek election on Sunday will be very closely watched in global economic markets.
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