AWI Commentary Australian Wool Sales (11 January 2024)

The first sales of the 2024 calendar year at the Australian wool auctions at a quick glance appeared to produce largely unchanged results, but in fact some notable changes in price levels to individual type and categories occurred. 

The 17.5 micron and finer super fine and ultra fine Merino sectors added some strong gains in the vicinity of a general 30ac, but almost all broader Merino fleece wools drifted 15ac or more as witnessed by the lower WA market prices in Fremantle. Skirting types were solid, crossbreds drifted slightly and cardings managed small gains. 

Australia’s largest exporter dominated the buying of Merino combing wools this week resulting in almost a quarter of all bales of these types sold to them. Similar purchasing from one of the newer and ever rising exporter auction participants was seen on the crossbred segment. Two of China’s largest top makers representatives were also very active on Merino fleece as well, making it difficult for forward sellers.     

Given the potentially demand weakening foreign exchange (forex) movements which occurred during the three week recess, the results could still be considered favourable to grower sellers. In particular, the AUD v USD sat over or near the 0.68 level for almost the entire auctions break, somewhat inhibiting fresh business to a large part of the export destinations. The Euro was the only major currency to go in favour of grower sellers, but that destination remains subdued for demand at present.  

Over 55,000 bales is scheduled to be offered next week. Melbourne will require 3 days to sell their offering so auctions will be Tuesday to Thursday.

Source: AWI