Low wool offering triggers buy-up

This was thanks mainly to the limited supply of 20 micron and broader wools, with Chinese buyers competing strongly for what was available.

The Eastern Market Indicator finished the week at 2023 cents a kilogram, a rise of 31c/kg, with about 6000 less bales offered week-on-week. According to the Australian Wool Exchange, Melbourne achieved the biggest increases, with 18 to 23 micron price guides lifting between 20 and 96c/kg respectively, while the 30 micron indicator also lifted 39c/kg in the south.

Finer wools, of which a large selection of the national supply was tender, had a harder time finding demand, holding relatively firm in the south but dipping 3 to 11c/kg for 16.5 to 17.5 micron wool in the north.

It was the first time in a month the EMI has lifted, following record high monthly averages for the indicator in both August and September of 2066c/kg.

Merino cardings fell 28c/kg in the south to 1410c/kg, while it dropped just 3c/kg in the north. There were 32,072 bales offered nationally, with 29,709 sold at a 7.4pc pass in rate nationally. This dropped to just 5.7pc in Melbourne, and climbed to 11pc in Fremantle, Western Australia. 

And supply looks to be remaining tight for coming sales, with offerings for the coming three sales expected to range from 36,800 bales to 37,700 bales and to be 16.5 per cent less than in the same period last year.

National Council of Wool Selling Brokers of Australian executive officer Chris Wilcox said with the global wool textile industry “keeping a close eye on the wool supply likely to be available in Australia”, the Australian Wool Production Forecasting Committee will meet in mid-November, a month earlier than planned.

Mr Wilcox said in his weekly wool update that with seasonal conditions remaining difficult in many of the major wool producing regions, the committee decided “an earlier, considered assessment to the forecast would provide valuable, updated information to the market”.

At the AWPFC’s last report in August, they forecast a 5.7pc dip in its production forecast for the 2018-19 season, to 322 million kilograms greasy.

This is likely to drop further at the next forecast, as the predicted difference in wool supply to the end of October is negative 13.5pc.

Southern Aurora Wool’s forward contracts market report said little grower interest was received for contracts out to Christmas, which were sitting around the spot price. But trading for next year was proving strong, with June 2019 trading at 2165c/kg, which is well above the EMI June monthly average for this year of 2040c/kg.  

Landmark reported good to inferior wools were making up a majority of the national offering at present, with an average vegetable matter of 2.3pc, and 64.6pc of lots with less than 50pc mid-breaks.