Aussie wool prices continue to fall

It was the last sale in Newcastle, which had commenced as a selling centre in 1928.  A very successful farewell function was held there on Wednesday night.

It was another mixed sale last week with a good start on Tuesday when sales opened in Newcastle on Tuesday.  Good gains were seen at the fine end, where there was some very good wool on offer, and buyers for Italy topped the sale purchases.  AWEX MPGs for 16.5 to 17.5 microns were up by 23¢, on average.

It was a steadier day on Tuesday, as the market eased in the North, where some of Tuesday’s gains at the fine end were lost.  Wednesday’s market in the South was relatively unchanged from the previous week, with a mixture of small gains and losses over the various Merino micron ranges.  However, trade reports indicated that the market was easing towards the end of the day, which was reflected in a fall in the WMI when Fremantle sold later in the day.

Demand was softer on Thursday, resulting in falls across all Merino micron ranges in all centres on the day.  The falls were greatest from 18 to 22 microns.  Falls at the fine end in Newcastle (together with those on Wednesday) cancelled out Tuesday’s gains.  Trade reports said that the better wools in the South picked up towards the end of the day.

Overall, crossbreds had a better week than the Merinos.

The EMI is 104¢ (-8.6%) less than in the same week last year and is 39¢ (3.6%) higher than at the start of the season.  The WMI is 98¢ (-8.0%) less than in the same week last year and is 55¢ (5.1%) higher than at the start of the season.

In Other countries, the Cape Wools Indicator in South Africa was down by 2.8% since last week against a 0.1% appreciation of the Rand against the US Dollar and a 2.6% appreciation against the Euro.

Among other fibres, cotton Futures moved up during the week after remaining relatively unchanged the week before.  May Futures closed at 85.40 US¢, up by 2.7% and July Futures closed at 86.05 US¢, up by 2.4%.

47,686 bales were on offer, compared with 50,239 bales last week.  9.3% were passed in, comprised of 4.0% in Newcastle, 9.0% in Melbourne and 15.4% in Fremantle.  Pass-in rates for Merino fleece and skirtings were 11.4% and 6.9%, respectively.  43,266 bales were cleared to the trade.

It was a mixed week for the US exchange rate, before it finished up by 0.34¢ for the week.  Financial analysts attributed the earlier losses firstly, to poor manufacturing data from China; and secondly, to uncertainty following the confused Italian election result.  Thursday’s upward movement was attributed to a better than expected Australian capital expenditure outlook data.  This led to a reduced expectation that the Reserve Bank will reduce the official cash rate when it meets on Tuesday.