Wild roller coaster ride looks set to continue

Wild roller coaster ride looks set to continue

Sheep
This season's price volatility has broken all previous records.

This season's price volatility has broken all previous records.

Aa

This season's price volatility has broken all previous records.

Aa

The roller coaster ride looks set to continue.

While the wool market has found short-term support, the fundamentals remain unchanged and trade clearance volumes remain well below average for this time of year.

As surplus wool stocks mount up in broker warehouse and in the China wool textile pipeline, it is difficult to be optimistic about wool values in the short to medium term.

Several senior wool traders report recent market volatility as "surpassing anything they have previously experienced".

This is creating greater risk to their international trade businesses and may lead to further consolidation in the early stage wool export and processing sector.

This season's price volatility has broken all previous records and the flow on effect causes international trade confusion, leading to credit defaults and the unenviable issue of market related quality claims.

Elmore field days have been and gone, so the season is well under way as crops and grasses mature and seed starts to form.

Keep in mind that specialist wool buyers will pay significant premiums for wool which contains low vegetable matter particularly in lamb wool types that are 0.3 per cent or less.

Shearing before the seed enters their wool is ideal and of course, protects them from flystrike in the warmer months.

The lambs themselves grow out much faster once they have been shorn at this time of the season and with buoyant meat prices this provides further value for your sheep systems.

We can report that wool yields results are near to average in most of our growing regions, however, the average cut per head remains down compared to the previous season.

Fibre tensile strength is also suffering for those shearing annually in the spring as we can report ewe wool is below 28Nkt with high mid breaks.

Tensile strength is difficult to manage due to a long and dry summer coupled with a reasonable May break.

Wool top makers will discount wool that is tender and contains high mid breaks due to the outcomes they experience when they card and comb the fibre.

These discounts are more obvious in a weaker market and can be substantial.

In contrast, high N/Kt wool with low mid breaks will attract premium prices, as it will convert into wool tops more efficiently with less short fibre lost during the top making processes.

With sheep numbers at record lows, only a slight improvement in wool fibre demand will allow surplus stocks to be all but consumed, then upward price pressure can re-commence in our market place.

KareeWool trade tips:

  • Calculate and understand your per kilogram cost of wool.
  • Regularly consult with your wool service provider about risk management options.
  • Know your wool selling costs and benchmark your rates against others.
Aa

From the front page

Sponsored by