Month: January 2017
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.