Wool market moving in the right direction

Moving in the right direction last week, the Eastern Market Indicator strengthened by 28 cents to finish trading on Thursday at 1,550c/kg. After a reduced offering from the previous week, the 38,217 bales offered managed a pass in rate of just 3.6 percent.

The Sydney selling centre sold 10,403 bales with most Merino microns strengthening 30-60c, while crossbred wool softened 20-30c. The 18 micron indicator firmed 40c finishing at 2,112c/kg while the 20 micron indicator rallied 57c to conclude the sale at 1,654c/kg. Merino Carding wool continued building to its recent momentum adding a further 21c to the indicator, while also recording the lowest pass in rate for the region.

Nationally, the level of vegetable fault is starting to fall at last, while the shift in fibre diameter to broader wool is slowing quickly and is set to reverse in early 2018. While these factors will not change the overall level of the market they will have a strong influence on premiums and discounts operating in the market. Forward contract deals made this week saw mid-2018 delivery prices rise by up to 100c for 18 and 19 micron wool types. This has resulted in forward prices being available to a 19 micron clip for a June 2018 delivery at only 2 percent less than the current spot market.

This week the three selling centres will offer 39,716 bales, with Sydney to offer 10,671, 21,540 in Melbourne and 7,505 in Fremantle.