Global fear spooks prices

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Bob GarnantCountryman
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Wool prices continued to tumble last week as fears of global financial uncertainty wreaked havoc in the non-food commodity market sector.

The Eastern Market Indicator was down 2.9 per cent in $A terms, to 1121cents/kg clean, the lowest since December 2010, according to The National Council of Wool Selling Brokers of Australia executive director Chris Wilcox.

"Since the elections in France and Greece two weeks ago fears have amounted around the world about the stability of the euro," Mr Wilcox said.

He said the situation had caused sharp falls in equity and non-food commodity markets.

Oil prices have dropped by 12 per cent, copper prices are down 9 per cent, tin prices off by 11 per cent and cotton lost 13 per cent in value.

"By comparison, the EMI in $US terms is down by 7 per cent with the largest falls seen in fine and superfine wool," Mr Wilcox said. "The 18 micron indicator is down by 9 per cent in the past two weeks in $US terms."

Partially cushioned by the falling exchange rate, Tambellup wool grower Ken Schlueter sold more than half of his 85-bale S/Gurleen wool clip last week in the Landmark catalogue.

The Schlueter family's top-price of 875c/kg greasy came from a four-bale line of 19.2-micron Pooginook-blood Merino wethers.

The good yielding 65.9 per cent line, with a staple strength of 25N/kt had a staple length of 102mm.

Mr Schlueter said his father, Herb, began running Pooginook rams in the flock 50 years ago.

Mr Schlueter, who farms with wife Beth and their children, Zac and Amy, continues to produce the Peppin sheep with excellent results.

"Unfortunately prices this year were not near the 1000c we received a year ago," he said.

With the ambition to build up sheep numbers to a normal capacity of 2200 breeders, Mr Schlueter said he was counting on much needed rain for his 60/40 crop/sheep farm, especially in times of lower than expected wool prices.

The Landmark Wool Weekly report said that the one-day sales in Fremantle resulted in lower prices in the order of 20-30c/kg across the board.

"A large portion of the offering consisted of high vegetable matter (more than 2 per cent) and lower strength lots," Landmark said.

Mr Wilcox said economic uncertainty looked set to be around for some time, with Greece scheduled to hold another round of elections on June 17 after the stalemate reached after the May 6 elections.

On top of these European woes Mr Wilcox said seasonal conditions remained very patchy across Australia. Many areas were still waiting for rain and the autumn break.

"Very few of the major sheep producing regions in the southern half of Australia have received mean rainfall in April," he said.

According to the Bureau of Meteorology's seasonal outlook for May to July, the prospects are not encouraging for croppers and sheep producers in Tasmania, much of Victoria and in the south-east corner of South Australia.

Prospects are for median rainfall in WA and through much of New South Wales but average rainfall in Queensland.

This week another low 34,900-bale offering is rostered for sale.

Last week's season high 23.2 per cent pass-in rate will be the figure to watch.

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