On Tuesday this week Melbourne hosted the traditional Tasmanian February wool sale. With Melbourne selling in isolation and the day being exclusively assigned to the Tasmanian store catalogue it was a perfect test of where this current market is at and how it relates to our wool types.
From the opening bid (which turned out to be the highest price for the week) competition was vigorous throughout the entire day, with fleece wool selling to levels not seen for 6 years. For me it was the spread of buyers that was most encouraging, with the usual candidates like New England Wool and G Schneider bidding up aggressively; it was the lower profile companies like Fox (buying in part for New Zealand Merino), Australian Merino Exports and Tianyu that purchased the volume.
The market reacted well to the stylish offering and was generally quoted 10-15 cents dearer on fine and superfine types when compared to last weeks close, with high nkt spinners types selling to more extreme levels. Crossbred types were quoted in sellers favour, while skirtings and cardings were exceptional, again.
A special mention should go to the Gee family from “Snowhill” for receiving this year’s top price, well done.
The Tasmanian providence story is gaining more and more momentum due to the ongoing promotional work we are doing both here and in our key markets overseas. This was clearly displayed this week, with half a dozen firms requesting meetings to discuss our value add proposition. The fact that exporters are now fielding requests from their downstream customers to process 100% Tasmanian origin batches means we are now getting to the position where we are able to take control over the price we receive for our product. One very large firm noted in our discussions “what you are doing and what you have to offer is so unique, coupled with the natural beauty of Tasmania, Tasmanian wool is now becoming the most sought after product available and we can use what you provide to differentiate our offer and ultimately maintain and increase our margins”.
Ultimately it is about turning Tasmanian wool growers into price makers, not price takers. Talk to your local Roberts wool representative to find out how you might be able to get involved and help strengthen our offer.
Sales continued on Wednesday with all three centres selling. The market retreated from the highs set the previous day, with fine and superfine fleece and skirting categories losing the gains they made on Tuesday.
The Roberts 2 Tooth Ewe Competition concludes today (Friday) with a presentation function being held at the Powranna livestock selling complex beginning at 6.30 pm. Please join us to hear the results of what has again been another successful event while getting the chance to share a drink and a conversation with your fellow peers.
Please email any questions you may have or discussion points you would like covered to firstname.lastname@example.org
There were 45,000 bales rostered for sale this week, selling Wednesday and Thursday in all three selling centers. Once again 19 and finer surged dearer. 18’s closed in Melbourne on day 1 at 1933 cents clean. This is a staggering number. Even more remarkable is the spread between 20 micron and 18, nearly 400 cents clean. We’ve spoken a bit about the equilibrium of supply and demand heavily influencing the current market, interestingly when you look at the number of bales sold at auction over the last 9 years and only twice have we sold more volume than this year to date. This is a clear indication that there is an increase in demand.
Fortunately for Tassie growers the mainland selection is starting to deteriorate from a VM point of view, with vegetable matter increasing dramatically this week. This looks to be about a month earlier than last year and is obviously a direct result of the amount of grass across the country. By comparison Tasmania’s wools are very free and will be keenly sought by Europeans and China alike.
I hope you got to see the Landline special on China last week, it provided a nice insight into the Chinese industry, frustratingly one comment was made that at this level wool is not competitive to cotton and synthetic fibers. This isn’t just coming out of China, India’s largest consumer of wool has also highlighted the disparity. When will they realise they’re not comparing apples with apples. Wool is a luxury product that demands a luxury price point? Don’t get me started on this one.
All in all it’s a good time for wool, and bodes extremely well for Roberts feature February sale next week. We sell in isolation on Tuesday, this a great result as it should generate some real interest with all eyes on a 100% Tasmanian selection.
Don’t forget the Roberts Flock Ewe Competition kicks of next week, contact your wool representative to get the full program.
Please forward any enquires to email@example.com
Auction markets returned to their usual 2 day Wednesday &Thursday rotation this week after last weeks Australia Day holiday.
The market in Melbourne followed on from the solid finish last week and retraced the small steps lost in early selling from the previous week. Again it was the finer Merino types that lead the way, with the better specified “European” types leading the way.
The average top making types were more irregular, with high mid break, overlong fleece lots less sought after.
Continuing on with the fleece commentary, it seems 19.5 and broader has hit a bit of a wall now, again the spinners types selling well, with poorer lots in and out in price.
Looking now at what might happen over the coming months, I think that overall supply and demand is going to continue to split the market into three or for sections and determine the market direction. Firstly we have the sub 18.5 micron types. There is likely to be less wool coming to market in this category. The season has improved dramatically, therefore the wool produced will be broader. There has been a shift in breeding direction, with producers looking to increase productivity, again increasing the micron and finally there is now some genuine demand for these superfine types again. Therefore I think it is perfectly feasible that the fine and superfine wools continue to improve in price…hopefully.
Then we have the broader merino types. For many of the same reasons as outlined above, I think we could see 20 micron and broader come under a bit of pressure? There will be an increase in supply for one, plus the current price is actually very high relative to their finer counterparts.
Then we have the crossbred market. Unfortunately I don’t see a lot of joy here. While I think we have already seen the major correction with the market returning to more “normal” levels, as supply increases and demand wanes, I cannot see a significant improvement for some time? This is being mirrored in NZ, the worlds largest producer of crossbred wool.
While everything I have outlined here is simply just an opinion, I do think we are in for some good times in the wool industry for a while yet.
Please send any questions or topics you’d like covered through to firstname.lastname@example.org
After two weeks of significant rises in the wool market, this week things came to an abrupt halt. Most of the fall was experienced in the middle micron brackets, with loses of 30-40 cents clean for the 19.5-22 micron range. As reported last week, the finer micron qualities have been leading the way and this week the sub 18 micron types were least effected, losing only a few cents.
On the other end of the scale we saw some stabilisation in 28 micron, which was unchanged on last week, while 30 and 32 micron continued their downward spiral, losing between 10 and 15 cents for the day.
Sales concluded around the country on Wednesday due to the Australia Day holiday on Thursday, with the market hanging on, just. Most categories were quoted in “buyers favour” losing a few cents on the previous day.
Talking with various exporters prior and during this week’s sale, the cheaper market came as no surprise. The last couple of weeks have run hard and as is often the case the sprint couldn’t be maintained.
Market commentators often refer to the pass in rate, as a percentage of the total offering, as a way of understanding the level of acceptance growers have of the current market levels. Barring any anomalies, a pass in rate in single digits is usually considered as a good clearance, while a figures in above 12% or 13% would suggest a cheaper market, with prices not meeting wool grower reserves. The reason I mention this is that even with the very strong market last week, we saw over 10% of the offering passed in. In the main this is due to the higher proportion of the clip made up by crossbred types, which as reported are not following the same trend as the finer merino types and are therefore not coming up to growers price expectations in many cases.
We have 2 day sales scheduled over the next few weeks, with 43-45,000 bales on offer nationally. It will be interesting to see if this relatively low volume can underpin the market.
Please send any questions through to our Wool Manager Alistair at email@example.com
The second sale at Oatlands for the lamb selling season has certainly been one to remember, not only for the fallen hammer results but for the quality line up of lambs presented by producers.
The January sale at Oatlands traditionally sees a majority of lambs, shorn and in light to forward store condition for paddock finishing. This years sale however didn’t resemble that of the year before with many buyers and producers commenting the lambs were an average of 10-15kg heavier and only a portion of the yard shorn.
The sale saw strong competition on the day. Local and mainland processors fort it out to secure numbers of the trade lambs on offer, with a small pen of 25 lambs from Pelham topping the sale at $150.
Restockers requiring lambs had confidence to pay over $100 on lighter lambs with only five pens of tail end lambs dipping below the rounded number.
Market highlights include:
Mungala, Acc: BJ & L Fish
Sold 971 2nd cross lambs at a top of $130 to average $122.50
Sold 859 1st cross lambs at a top of $103 to average $103.82
Sold 332 1st cross lambs at a top of $138(ewe lambs) to average $121.42
Riverbanks: Acc P. Burns
Sold 200 2nd cross shorn lambs at a top of $126 to average $122.10
Wenlock- Acc RT & JM Lame
Sold 767 1st & 2nd cross lambs at a top of $124 to average $110.67
Gettington- Acc: GJ & SG Scott
Sold 751 2nd cross lambs to a top of $120 to average $114.19
Should you have any questions regarding the sale or anything moving forward, please don’t hesitate to e-mail firstname.lastname@example.org
The wool market opened on Tuesday this week with Melbourne again selling in isolation. After last week’s huge rises in the merino categories it was a little of a wait and see approach to see what might happen this week. Some exporters were suggesting that an unchanged market would be a good outcome, while others were thinking a slight increase would be seen. How wrong both predictions were, with the market on Tuesday continuing in the same vein as last week. It was again the finer merino fleece types leading the way, adding in excess of 50 cents clean for the day, while the 21 to 23 micron categories were basically unchanged. At the other end of the scale the crossbred types continue to fall out of favour losing further ground.
Sydney and Fremantle joined Melbourne selling on Wednesday and it was again the same story. Melbourne saw the 16.5 micron price guide add a further 60 cents clean for the day, while Sydney played catch up with most categories 18 micron and finer adding nearly 100 cents for the day.
Looking at the 16.5 MPG, which is the finest MPG that is quoted, in 5 selling days in Melbourne for 2017 it has added 252 cents clean, or 14% to the pre-Christmas close.
The benchmark Eastern Market Indicator set a new record hitting 1439 cents on Wednesday which eclipses the previous record set of 1425 cents back in June 2011.
The rises we have seen over the past 2 weeks has sent the forward market into a frenzy with exporters covering purchases as far out as Spring 2018 at levels most people would have been very happy with at any stage during the previous 5 years. Feed them while they’re hungry is always the best approach, so its good time to look at your forward production and consider using some risk management tools to cover any down side risk.