Wool broker reports of solid demand from Asian and European buyers saw every category of fleece gain ground this week and pushed the EMI to 1500¢, even the coarse fibres enjoyed some of the action with rallies between 20-30¢ experienced in some crossbred categories.
The broad-based demand evident in the higher EMI in both local and US$ terms, gaining 51A¢ and 33US¢, respectively. The EMI not the only indicator to crack $15 this week with the WMI posting a 65A¢ rise, or 44¢ in US$ terms – Figure 1.
Both Wednesday and Thursday saw gains across the board with some of the finer fibres experiencing rallies in excess of 50¢ on a day. Standout performers for the week included 18mpg in Melbourne, up over 100¢ and Sydney 17.5 mpg not far off that with a 94¢ gain.
Some exporter reports of just not having access to enough wool to sell at the moment really fuelling the surge. A total of 40,626 bales offered this week with 39,461 sold on the red-hot demand kept the pass in rate contained to 2.9% – Figure 2.
The gains in the physical market spilling over into the Riemann Wool Forward market this week with a flurry of activity as growers get set on some healthy forward levels.
Figure 3 gives an indication as to the current mid-point forward prices for a selection of microns out until May 2018 for those that want to consider levels to get a hedge in place.
The week ahead
Next week we have just under 48,000 bales listed for sale with trading schedule over three days in Melbourne and two days for Sydney/Fremantle.