47,000 bales were rostered for sale this week, with Melbourne selling in isolation on Tuesday, then all three centers in action Wednesday and Thursday. The merinos continue to push to new highs, while basically unchanged on Tuesday they firmed between 5 and 20 cents on Wednesday. There was also some positivity in the xbred sector for the first time in a long while with 28’s firming over 20 cents in early trade. The most encouraging thing is the xbreds managed gains despite the strong AUD. At the time of writing this report the AUD is sitting a shade over 77 us cents which almost equals it’s highest point in 3 months, in actual fact the strongest it’s been in the last year is 78 cents for a fleeting moment. You may recall we spoke several times about the 1000 usc ceiling for the EMI between June of last year and Christmas, well now it’s at 1115 and in a steep upward trend.
From a selection point of view we’re in the change over period, VM increasing, along with midpoint breaks. Exporters with some foresight will start actively accumulating fleece wool testing under 1% vm as they will be like hen’s teeth in 3 or 4 weeks time. The challenge they will face is buying and holding stock at record price levels.
From a historical point of view wools on the wrong side of specification aren’t being discounted as much as usual, this is a natural result of an extremely strong market and the “bottom end” being forced up as buyers try to secure wool at a price. Another influencing factor is the interest in fine wool tops, the early stage processors take less notice of greasy test results as they put together processing lots to hit a wool top specification. The good news for Tasmanian growers is that there are now several topmakers making 100% TASMANIAN wool tops, which explains the enormous money being paid for skirtings etc in our February catalogue.
The question on everyone’s lips is how long this bull run can continue, not just for wool but beef and lamb as well. One thing is for certain nothing lasts forever, I still think we can maintain these wool levels for a little while yet, supply will start to disappear in about 4 weeks time which hopefully protects any downside. As always please forward any enquires directly to firstname.lastname@example.org