There were approximately 37,000 bales rostered for sale this week, offered in all three selling centers. The market continued to ease slightly in the merino categories but held relatively firm in cardings and xbreds. It appears as though China have “gone quiet” with it difficult to even get counter offers back some of the major Chinese agents. This is not unusual for the time of year, with limited volume coming to market over the winter period, some major processors take the risk of sitting out and hoping the market comes back. I call this a risk, because the longer they sit out for the more pressure they put on themselves to secure quantity in the future, and too much pressure on the buy side will force prices straight back to where they’ve come from.
From a growing point of view it’s really important to remember that fine merino prices are still excellent on historical standards. With 17.5 trading around 2200 cents clean it works out to be roughly $70 per head in wool value (subject to yield, kgs etc) and with mutton, surplus sheep sales at near record levels it is a far more encouraging time to be a wool grower.
We often discuss the varying premiums and discounts depending on the direction of the market. With demand being a touch soft right at the moment the discounts for “off types” or anything that’s not prepared appropriately will start to increase. It’s a good opportunity to reinforce the message to keep preparation standards high to capture the best prices available.
The four week forecast currently has the week beginning the 7th of June as only having 25,000 bales up for sale – it’s rare to see quantity so low in a week, and this could change as we get closer to the time. It does give us a taste of how supply will drop off shortly, and China can’t sit out forever.
As I’m sure everyone is aware the Campbell Town Show has come round again. It is on the 2nd and 3rd of June. It is a great opportunity to see some examples of the states wool and sheep production. I look forward to seeing some readers there next week. Please forward any questions to firstname.lastname@example.org