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Slow processing season no dampener for Australian wool

Despite it being a slow point of processing season when buyers face uncertainty about price trends and volume for the forthcoming season, Australian wool market has performed well once again. The overall result was an increase of 1 cent in EMI with rise in superfine wools and crossbreds offsetting similar declines in the medium merino segment. A strong, but relatively stable local currency had little effect on the wool market last week and overall, prices rose just 1 USC across the week.

Last week, buyers seemed to be less critical when it came to lower spec wools partly due to the continued tightness of supply with next week’s offering a meager. As buyers look to obtain their share of the available quantities of high quality wool lots available, superfine wools appear to be gathering steam for a jump in price.

Similar to last season, European buyers are aware of the volumes of wool available that meet their specifications as well as seasonal nature of this supply. The futures market indicates that there will be little correction in coming months with 21-micron trading at 1425 for September. Hence, the downslide appears to be limited to perhaps only 20 or 30 cents.

However, if the market were to ease by 20 or 30 cents in coming weeks, and then start to rise again, these purchasing managers would feel more comfortable that they have made the correct decision to capture the maximum seasonal opportunity.

 
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