Market pressure from large sales

Headshot of Bob Garnant
Bob GarnantCountryman
Rocky Gully woolgrowers Lian, Ian and Aaron Higgins with Landmark Albany agent Noel Hulm.
Camera IconRocky Gully woolgrowers Lian, Ian and Aaron Higgins with Landmark Albany agent Noel Hulm. Credit: Bob Garnant/Countryman

Another large national offering of wool took 20c off the Eastern Market Indicator last week, which finished at 1111c/kg clean.

Australian Wool Industries Secretariat executive director Peter Morgan said the 53,763 bale offering was slightly above the previous week's sale, creating the two largest sales of the season.

"The sales put the market under some pressure," he said.

This week's national offering is expected to fall to 47,600 bales.

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"Last week's sale had strong grower reaction, as they passed in 20.8 per cent of the wool on offer including 32.6 per cent of the fleece," Dr Morgan said.

"The losses were reasonablely evenly spread over the Merino micron ranges by the close of selling.

"The US exchange rate closed at 88.14c after gaining 1.31c on Monday and falling by 2.21c over Wednesday and Thursday.

"Analysts attributed Monday's gain to weaker jobs data from the US and the mid-week falls to concerns about softer growth in China and poorer jobs data in Australia."

Landmark said wool prices opened with significantly lower prices across the board, before recovering some of the losses during Thursday's sale.

"Falls were heavy in Fremantle sales on Wednesday, as prices retreated by 20c to 35c across the 18 to 22 micron categories on offer," Landmark said.

"Thursday's sale saw some positive price movements, with the market bouncing by around 20c for 18.5 micron to 22 micron wool, limiting the weekly losses to 10c to 15c.

"The 18 micron categories were much improved, lifting 42c and closing with a weekly gain of 7c."

Rocky Gully woolgrower Ian Higgins and sons, Lian and Aaron, attended last week's sale to witness their 220 bale Corranup clip go up for auction through Landmark.

The Higgins family run 3200 ewes mated to Billandri Poll Merino bloodlines over 40 years.

They also run 2000 wethers and cull at the age of four years.

"We run mostly sheep and some cattle," Mr Higgins said.

Mr Higgins and wife Alanna are both proud their sons have taken a strong interest in being part of the future of the family's livestock production.

"Recently we have introduced Coromandel bloodlines for a bit of size and added wool quality."

A 16-bale line of 18 micron Corranup wool, shorn in early December, that yielded 74.6 per cent, sold to a top of 967c/kg greasy.

Landmark Albany wool representative Noel Hulm said the Higginses produced one of the better clips in the district.

"The Corranup clip presented and sold very well," Mr Hulm said.

Elders said on balance, given the lack of stock in the pipeline, the expected renewed interest from China post-New Year, the outlook for the Australian currency, lower production expectations and an improved outlook for the world economy, a better price scenario in February or March would be more likely. Chinese Government policy would be watched closely.

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