Wk 50 11/06/2015. The AWEX EMI took a reality check at auction sales in Australia this week falling 17c to close on 1356c.
The market could be forgiven for posting its first two-day consecutive fall since February. It was a nervous market sentiment searching for a new level as it presented mixed signals in each of the three centres on the opening day. With Fremantle selling every second week their 104 cent rise in the WMR was simply a catch-up. On the east coast Sydney held its ground on Wednesday whilst Melbourne lost composure. The broader microns categories took the heaviest hit as it commenced to wash off some of last weeks rises. Thursday’s market saw both Sydney and Melbourne conceded ground, and despite their differing paths during the series the Eastern markets were both back in sync at the close of the week with only a few cents separating the MPG’s.
Whilst the medium and broader Merino categories lost about 30c the finer microns showed some resilience, particularly the better types which remained firm. The Merino Skirting sector followed the trend of the Fleece losing 20c. A very small Crossbreds offering experienced some strength in 25/26/27 micron ranges, while the 28-32 micron were largely unchanged. Merino Cardings posted a 10c increase and showed no signs of faltering. As we close out the 2014/15 season next week’s offering is a mere 23,937 bales, and the smallest selection offered in 12 months.
Whilst the EMI experienced a price retracement this week, it is far from the end of the world. Whilst some of the price falls could be contributed to the slightly stronger AUD and some contribution from the irregular quality of the offering, the main factor was undoubtedly the Chinese showing some resistance to the sky rocketing prices over the past few months.
The Forwards markets reflected a lack of confidence and bidders pulled back their already heavily discounted bids. As you can imagine the phone ran hot with wool producers wanting to get a forward price after the news of the correction spread, however, few were excited by the bid levels on offer and chose to wait it out for now. Whilst I strongly advocate for forward marketing I believe the heavy discounts in the bids are forcing producers to remain unhedged. One would hope that this gap closes with the bids rising and not the market falling further towards the lower bids. ~ Marty Moses