Positive signs heading into special fine wool sale this week

Disparity continues at both ends of the clip

Wool
Fine wool is in the spotlight this week at auction sales, which have started the new year in positive territory.

Fine wool is in the spotlight this week at auction sales, which have started the new year in positive territory.

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COMMENT: A special fine wool sale comes on the back of continuing good demand at this end of the clip.

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COMMENT

Australian wool auction sales resumed last week after the Christmas recess with the biggest volume offered for the 2020-21 season to date.

Trading delivered better outcomes than anticipated, given stronger foreign exchange and larger supply volumes expected to hit the market in forthcoming months.

Merino categories all stood-up, noting a stronger start on the finer edge of the clip - including fleeces, skirtings and oddment types.

Medium Merino wools finished the week softer, as favorable seasonal growing conditions deliver gutsy, nourished - but broader - fibre diameter types into the market.

Those in 15 to 17.5-micron categories were trading positively - to 35-55 per cent of their five-year average values - and remain the healthiest sector of our industry.

Medium Merino wools measuring 19 to 21-micron struggled to hold and are trading between 5-15 per cent of their five-year average, with buyers given plenty of depth on the supply side.

Fine wool growers are now looking forward to this week, which continues to be promoted as a special fine wool sale.

Large volumes of crossbred fleece and lamb wool on offer with below average demand is causing irregularity in these types - trading to less than half of their value compared to this time last season.

It is notable that 27 per cent of crossbred wools were passed in on the final auction day in Melbourne last week, so stocks are building now both on-farm and in broker warehouses. This signals tough times ahead for the coarse edge of our clip.

As a grower, do you sit and wait for this end of the market to recover, or do you accept that this is the new trading range and meet the market?

No doubt this is the toughest area of our industry, with plenty of broader wool growers facing the same difficult outlook.

After a bumper grain harvest, which is mostly complete, woolgrowers now have the opportunity to return to their shearing sheds - and there is plenty of activity in our regions.

The wool forward market remains thin, as buyers and sellers struggle to find common ground - leading to minimal forward contracts being written.

Both sides of the transaction are watching closely to see if a basis will be formed in the coming weeks, and only time will deliver that news.

Lambs are being shorn everywhere so they can return to paddocks and for further fattening, with great expectations that meat markets will deliver optimum results throughout 2021.

It seems the global COVID-19 vaccination roll-out is building confidence around the world, which is critical as our meat and fibre industries rely on a healthy and vibrant retail sector.

Now that we are well into 2021, let's reflect and congratulate our industry for its handling of the coronavirus to date.

We have plenty more challenging times ahead, but let's acknowledge and praise the ongoing efforts of every wool selling centre in Australia - particularly the southern region.

Their hard work and discipline to maintain strong protocols in all auction centres has allowed us to continue to trade uninhibited and from week-to-week.

It has not been easy for buyers, auctioneers, exchange staff or brokers as we adjust to adhering to strict social distancing, completing attendance registrars and following ongoing hand and strict desk sanitisation rules.

Growers and the general public have not been able to attend our southern wool auction sales since Easter last year and this looks set to continue.

We thank all involved that continue to front-up and participate, as it has - and continues to - challenge each and every one of us in the trade.

Happy New Year to all our readers and all the best for a prosperous and, most importantly, healthy 2021.

A special mention to all the amazing people that devote themselves to our services industry.

We cannot thank you enough for the tireless and selfless dedication that delivers us world leading health and fire services.

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