I write this week’s wool report from the airport returning from the last of the 2016/17 Tasmanian wool offerings in Melbourne.
With one selling day left in the season it is probably a little premature to look at the year that was (I will leave that up to Rob next week) but suffice it to say, for the most part it has been a good year for wool.
Merino types have now been going on what you would have to describe as a bull run for the best part of 6 months, fine crossbred types, in particular the well-bred Corriedales have recovered somewhat and are selling at acceptable levels, cardings have managed to hold on to their new higher basis, leaving really only the 30 micron and coarser crossbreds that have disappointed somewhat.
On Wednesday this week we saw the market give up the gains from last week, along with a bit extra. Most Chinese merino types were quoted 50 cents cheaper on the day with high vegetable matter and low tensile strength lots weighing heavily on the market. The European spec types were least affected, and in some cases within the Tasmanian catalogue quoted dearer on the previous week.
While the offering quality might have a little to do with the correction seen on Wednesday it is not the whole story.
On Monday afternoon of each week preceding a sale week AWEX distributes a four week forecast of the volume of wool allocated for sale in the upcoming weeks. This week we saw the forecast come out suggesting next week’s sale (the first for the new selling season) would have an increase in volume from the previous forecast only a week ago of nearly 27% or virtually 11,000 bales.
Of course I understand the reasons why this is the case, with many farmers having good income years it is pretty easy to hold over wool into the new tax year. I do however fail to understand why those brokers behind the sharp jump in volume next week were not aware (or failed to report it more likely) of this as recently as 7 days earlier.
The other question that should be asked is why dump this wool in the first week of the season? Last I checked there is 44 selling weeks in a season, not one.
The market was probably always going to be a little softer this week but we certainly don’t need poor information flow contributing to the softer tone turning what could be described as a price check into more like a price correction.
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