New season wool drop helps lift prices

Buyers scrambled to secure good specification wools, particularly on the second day of the relatively rare-this-season two-day sale week and possibly the last two-day sale for the year.

Reduced volumes this week and for the next two weeks have seen a return to single sale days scheduled on a Wednesday.

A devaluation of the Australian dollar against the United States currency and early reports of the Chinese government easing finance restrictions also helped drive demand and prices.

Brokers expect prices to remain firm this week, given the smaller than expected sale offerings, the limited amounts of wool going into store, the Australian Wool Testing Authority reporting new wool testing is about eight per cent behind year-on-year, and reports Chinese wool stockpiles are depleted.

The market opened cautiously on Wednesday last week at the WWC, building on small gains achieved towards the end of the second sale day the previous week.

Newcomer Global Wool Export snapped up 21pc of the offering early, with Modiano (Australia) and Techwool Trading each taking more than 10pc in second and third place as major buyers, ahead of Michell Australia with 9.8pc.

Prices for all microns rose between 15 and 20 cents a kilogram clean through the day, with only 2pc of the small 4514 bale offering passed in and 9pc withdrawn.

On the Thursday with 11 buyers in the room, there was more interest, with strong competition for good lines.

Finer 18 and 18.5-micron wools attracted 30-34c more at 1388c/kg and 1371c/kg, while 19.5 mid-micron wools were also in demand, adding 35c to $1301c/kg.

Other microns put on between 19-25c.

Prices for 18 and 18.5-micron wools are 231c and 214c higher than they were at this time last year at the WWC, according to Australian Wool Exchange figures.

Mid-micron wools are bringing between 140c and 168c more than last year.

With Thursday's higher prices, only 1.6pc of the 4405 bale offering was passed in.

Techwool Trading was the main buyer, taking 15.2pc, ahead of Chinatex, 14.3pc, and Lempriere, 13pc.

The Western Indicator finished the week up 42c to 1247c/kg, compared to the Melbourne market up 34c to 1185c/kg and Sydney up 38c to 1236c/kg.

While the market looks promising for this week, Primaries wool manager Greg Tilbrook was cautious on the longer-term outlook.

"The volume is starting to slip already and it looks like the season will be very short," Mr Tilbrook said.

"While the good spec wool will continue to be well sought after, a high proportion of the WA clip is higher vegetable matter, high mid-break, low-strength wool.

"There's still a lot of the poorer spec wool out there.

"Shorter fleece from six-to-10-month shearing is still extremely well sought after and that's helping keep the price of 50 millimetre lambs' wool up.

"But the short lambs' wool - 20mm - is starting to struggle due to the number of bales on offer."

"That's the best prices I think I've ever had," said a surprised Des Seymour, Manjai Spring, Miling, after watching some of his Merino fleece wool sell at the Western Wool Centre (WWC) last week.

"Wait 'til I get home and show the sons these prices," said Mr Seymour, 77, who was raised in Moora and has spent his life farming in the region.

"I've got three sons on the farm.

"One's alright with sheep, but the other two just want to crop from fence to fence."

Mr Seymour said the 11 bales in two fleece lines were from an end-of-September shearing of ewe hoggets and "old orange-tag ewes" on their way to a Muchea sale.

The wool averaged 18.6 micron diameter, with comfort factors of 99.1 and 99.2 per cent, yields of 67.5 and 70.5pc and staple lengths of 75 and 69mm.

It was placed with Mr Seymour's traditional broker Landmark for Thursday last week, the second day of a relatively rare two-day sale week at the WWC so far this season.

Both lines sold, one to Chinatex and the other to PJ Morris Wool, on strong bidding which pushed the prices to 944 and 972 cents per kilogram greasy, about $80 above the estimate.

"I had a lot to do with an old uncle when I was much younger, he always said you don't hang on to wool, you sell it as quick as you can and you don't store it because the price might go down," a happy Mr Seymour said.

He was going home to assess bringing his main shearing forward.

Manjai Spring comprises 8090 hectares over five blocks and runs about 5500 Merino ewes.

"We generally do our main shearing in the second week of January, but this year that will mean they will have been 13 months between shearings and the wool will be too long,'' Mr Seymour said.

"The buyers seem to want shorter wool these days.

"The boys are getting stuck into harvest now and they should be finished in early December.

"I think we will look at bringing shearing forward to before Christmas and starting as soon as we finish harvest."

He said the enterprise focus in recent years had swung more to cropping.

Close to two-thirds of the area was given over to a program this year of canola, barley and wheat.

Canola harvesting started on Friday of the week before last.

"The yield is pretty good in the north, but not so good in the south (of the properties),'' Mr Seymour said.

"We were just into that rain belt, we got 102.5 millimetres in some of the rain gauges at the end of July, early August or thereabouts.

"That was the saviour.

"I thought it might go two tonnes to the hectare this year, but it's not as good as it looks when you get into it.

"It'll probably end up about 1.6t/ha."