Month: April 2017
There was a lot of anticipation about how the market would open up this week after the traditional one week Easter recess.
Early forecasts showed a sharp jump in roster volumes with close to 60,000 bales initially estimated. In today’s terms 60,000 bales is a very large volume week and when we consider that every merino bale is worth 50% more than twelve months ago, it was going to stretch the trades ability to fund the weeks sales. Thankfully we didn’t see the full 60,000 bales come to market, with final numbers coming in under 55,000 which no doubt helped with the sentiment as buyers sat down to sales in all three centres on Wednesday.
Unfortunately the slightly negative tone that was circulating during the break couldn’t be fully ignored and the market opened up cheaper, with 18.5 to 23 micron most affected. These mid microns lost between 15 and 30 cents for the day, while both finer merino types and crossbreds were quoted unchanged.
Looking at the market in a little more depth and we can see some changes in the offering beginning to take effect, in particular the vegetable matter content after the good spring and summer experienced up and down the eastern seaboard. Merino fleece in the Northern region is averaging nearly 2.5% VM, while their skirtings are closer to 8%. The same is appearing in the South, albeit not quite as dramatic at 2% and 6.5% respectively. This bodes well for our FNF (free near free) Tasmanian clip as it begins to come on line.
On another note, the entry forms for this year’s Campbell Town Show are out and can be found on their website. Why not take the time to enter some fleeces in this year’s show.
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I thought I would commence this week’s column discussing the abrupt correction we saw on Wednesday last week. After a long period of gains week after week, mainly in the finer microns and mainly driven by China. 21.0 and finer retraced between 50 and 100 cents with medium wools least affected. On face value it looked a lot worse than it was. As we’ve said many times when the market is particularly strong the poorer testing wools are discounted far less than they should be. Last week saw some of the large Chinese indent prices pulled back, thus the lower end of the clip returned to more appropriate discounts, the issue is that at this time of year the poorer end makes up a large percentage of the offering hence it heavily influences the micron price guides. On top of this the market retraced so quickly that it was particularly difficult for buyers to adjust their limits on the run, so many over corrected. The positive thing is that wool was sold the night after the sale, indents also reentered the market and merinos firmed slightly on the second day.
It was great to see that that strength carried into early trade this week with strong gains across all merino categories. 18’s closed in Melbourne on Wednesday at 2119 cents clean or only 30 cents behind the peak of two weeks ago. 21’s were particularly strong in early trade jumping over 60 cents to 1439 clean and cardings and xbreds firmed as well.
To be honest last week’s hiccup was a pretty good result for Tasmania’s wool growers, we needed a reality check, and much better that happens in a week when we’re not selling. Some of the prices achieved for better Tasmanian merinos this week were outstanding, further proof that quality fine wool is still keenly sought.
Sales will be in recess for 1 week next week, then resuming on the Wednesday after Anzac day.
Finally I would like to thank the readers that got in touch with us after the call was put out for Tasmanian Non Mulesed, demand is still strong here, so if you would like further information please don’t hesitate to let us know on firstname.lastname@example.org
With last week’s relatively significant correction in the market I thought it would be worth looking at what has happened since Christmas as a way of trying to keep things in perspective.
Included is a table that shows a snapshot of the market showing the indicator prices at the close of last week compared with the beginning of sales in January.
As can been seen from this table all most of the market strength has been driven by the sharp rise in fine and superfine values, with the mid microns basically unchanged or slightly cheaper, while crossbred prices are strongly dictated by micron, with the finer qualities slightly better and the broad types cheaper.
In every case the prices listed at the close of last week are between 30 and 70 cents less than the high point seen over the past couple of weeks.
|17 mic||1753||2314||+561 cents|
|18 mic||1714||2153||+439 cents|
|19 mic||1620||1897||+277 cents|
|21 mic||1410||1413||+3 cents|
|28 mic||666||720||+54 cents|
|30 mic||605||578||-27 cents|
As I reported a few weeks ago, the strength of the current market is being driven by China with early stage processors worried about supply (or lack thereof) coming to market in the short term. China of course is our largest trading partner, taking anywhere between 75%-85% of our volume each year, unfortunately what comes with this reliance is the fact that if they choose to reduce their limits the spot market inevitably pulls back.
Roster volumes have increased both this week and next leading into the Easter break in sales and I cannot help to suggest that this has had an impact on the market. While we are still only talking about weekly volumes of 47-50,000 bales both this week and next, in both cases this is a jump of over 10% on initial estimates.
In early trade this week the market took into account the increased volumes along with the bull run we have seen recently and traded sharply cheaper. All micron categories were effected with 18 & 19 micron losing 100 losing cents, while other categories lost 40-50 cents clean on last weeks close. With 3 more selling days before the Easter recess it will be a matter of not if, but how much the market retreats.
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The Stud Merino Breeders Association of Tasmania in association with AWI will be holding a Merino sheep classing and selection day at “Beaufront”, Ross on Friday the 21st of April.
The session will run from approximately 9:30am until 3pm and will be conducted by Stuart Hodgson from AWI. Stuart is a well-known and respected sheep classer who now works for AWI and has conducted similar workshops throughout Australia. The Classing Day will be free of charge and a BBQ will be available for lunch provided by the Ross Community Association.
Anyone interested in Attending is asked to contact Helen Clark. Secretary, Stud Merino Breeders Association of Tasmania by the 18th of April on 62547198 or email firstname.lastname@example.org