UI]ITED STATES DEFARTTI.IET OF AGRICULTURE
Bureau of Agricultural Economics
WOOL-25 January 11 1939
.. HE WOOL SITUATION
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U S DEPOSITOR Summary
The domestic wool situation has not changed materially in the past
month, the Bureau of Agricultural Economics reports. Sales of raw wool in
the Boston market remained small in December and prices declined slightly.
The decline in prices in the domestic market was accompanied by declines in
foreign markets, and the spread between Boston and London prices showed
The weekly average rate of mill consumption of apparel wool in November
was about 20 percent higher than in October and was the highest for any month
since March 1937. Consumption on a scoured basis for the first 11 months of
1938 was 20 percent smaller than in the same months of 1937. .':ill sales of
men's wear fabrics for the spring season are reported to be much larger
than a year earlier, and mill activity is expected to continue at a relative-
ly high level in the early months of 1939.
In view of the continued improvement in domestic mill consumption it
appears quite certain that stocks of raw wool in the United States at the
opening of the 1939 season in April will be smaller than a year earlier. A
considerable quantity of domestic wool held at the present time is covered
by Federal Government loans.
On December 1, apparent supplies of wool in the five principal export-
ing countries of the Southern Hemisphere were estimated to be about 2
percent smaller than a year earlier and also 2 percent smaller than the
December 1 average supplies in the 5 years 1932-36. The relatively large
carry-over into the current season in the Southern Hemisphere has been
offset by the decline in production in Australia and by larger exports.
Mill consumption has improved in some European countries in recent
months, and the outlook for disposal of the current clip in the Southern
Hemisphere is more favorable than at the beginning of the season.
RF.CENT DEVELOPMENTS IN DOMESTIC SITUATION
BACK3RCUI[rD- As a result of large imports and reduced mill con-
s'-imption in 1937, the 1938 domestic wool marketing season opened
in April with a much lInrgCr carry-over of wool than in the pre-
vious season. Thl a-veragc farm price of wool at the opening of
the 1938 seon a5 ?-..' ,5 percent lower than in April 1937.
The decline :: :U."; J in 1937, ho. ;ri- was greater
than the cVli'.o ai,: ol : 1oo.ds to corsusrt.r;r an d stocks
of manufa :,,, .:.... .- :.:,: turned d wool go -.s wo-e sharply re-
duced in the o-arl, ;.:e o 3s, TI!. Federal Governeont loan
program for *;o! .u' cers provided an important stabilizing
influence on dcmrestic prices in the early months of the 1938
'ool consumption and prices also declined in foreign coun-
tries in 1237 ai: '-"e early months of 1938, but the declines
were not .so .-cat as in the Unr.ited States. Since the early
summer of 1938 domestic mill cornumrption of wool has increased
materially ariddomestic prices have advanced moderately, but there
has been little recovery in foreign wool prices in this p'-riod.
Wool sales and prices
',ool1 sales in the Boston market wore relatively small in recer.ber.
Quotations on most grades declined slightly during the month. Snall juanti-
ties of fine Delaine bright fleece wools were sold at 23-31 cents a pound,
grease basis, the last week of DecC.,-bLr conparud with 29-31 cents the end
of November. Combing length 3/8 blood bright fleece wools were quoted late
in December at 31-32 cents grease basis, cor.;.arcd with 32-33 cents a month
earlier. mixede d grade countr:y-.iAckcd 3/8 and 1/4 blood bright fleece sold
readily at about 30 cents a round in the grease, delivered to Eastern
markets, but few lots were offered at this price.
Quotations on graded territory combing wools at Boston in December
declined 1 to 2 cents a foundd on a scoured basis, Average prices for
D.:ccmber were slightly below the November navrage but were about 10 percent
above the low point in June,
The United States average farm price of wool on December 15 was 20.2
cents a pound co.-par;d with 20.5 cents on JNove.ber 15 and 23.6 cents on
Dcc.-~:br 15, 1937.
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Wool imports and stocks
United States imports in November of 4.1 million pounds of apparel
wool for consumption were smaller than those of October but were slightly
larger than imports in November 1937. Imports of such wool in the first
11 months of 1938 were only 26.4 million pounds compared with 147.4
million imported a year earlier and a January-November average of 46 million
pounds for the 5 years 1932-36.
Imports of carpet wool for'consumption were 58 million pounds in the
first 11 months of 1938 compared with 169 million pounds for the same period
in 1937. The January-November imports of apparel and carpet wool were the
smallest for those months in any recent year except 1932.
SStocks of apparel wool in the United States have been sharply reduced
as a result of the large mill consumption and small imports in recent months.
But, because of the larger carry-over into the 1938 season and the small
consumption in the'early months of the year, stocks of wool remaining at
the end of :Iovc-r.bor were estimated to have been larger than a year earlier.
A considerable quantity of domestic wool stocks is covered by Federal
Government wool loans, which were made available beginning April 15, 1938.
The Commodity Credit Corporation states that through December 19 loans had
been riad- on about 77 million pounds of grease wool. To the same date 12
million pounds had been released by ropaynrcnt of loans.
Production, imports and'mill conzur.u:tion of apparel wool, grease
basis, in the United States, specified periods, 1935-38
Year be. inning : Production : Geeral ill
April 1 imports 1/ consumption
: million Million i:i llion
: pounds pounds pounds
1935-36 ........................ 431 83 2/ 673
1936-37 .....................: 427 164 582
1937-3 ............ ........... : 433 60 407
Apr.-I;ov. 1937 ...............: 3/ 433 55 312
Apr.-IIov. 1-'3 preliminary .....: 3/ 435 17 337
Imports from the Bur.:Lu of Foreign and Domestic Commerce.
Consumption Fror., the Lurcau of the Census.
1/ Weight as roorted greasy, scoured and skin wool added together. General
imports include v.'ool entered for immediate consumption and entries into
2/ Stocks of apparel ..ool in the United States wore largo at the beginning
3/ Production for entire year.
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The rate of -c.-.s:-zurition of apparel wool by United States mills in
November averaged 5,878,000 pounds, scoured basis, per week. This was
about 20 percent hi:iher than that of October-and was the highest reported
for any month since il.'rch 1937. The increase in consumption in INovember
was in contrast to the usual seasonal trend which is downward. Because of
the low rate of consumption in the early months of the year, consumption
of apparel wool, scoured basis, in the first 11 months of 1938 was 20 per-
cent smaller than in the same months of 1937.
Mill ccriZji.it.ion on a grease basis from January through November was
equivalent to 349 million pounds of shorn wool and 60 million pounds of
pulled wool. The total consumption of pulled and shorn wool in this period
was 60 million ':unds smaller than consumption in the same months of 1937.
:ill sales of wool fabrics. were not large in December, due to season-
al factors in the industry. The bulk of the orders for men's wear fabrics
for the spring season was placed before the end of Novr.iber
In view of the substantial increase in domestic mill consumption in
recent months, and th, s...all i:. .ortc of apparel wool, it was pointed out in
the Dec'..o.r ',ool Situation that the carry-over of wool into the 1939
domestic marketing season probably will be smaller than the carry-over
into the current season. But, because of the continued increase in the
spr-ad between domestic and foreign iool prices, it was also stated that
further .aiv..cci in prices of domestic wool which i.i:-ht result from the
improvement in domestic wool consumption are likely to be limited unless
there is some rise in foreign prices in terms of United States dollars.
DL'.'elopments in the domestic and foreign wool markets in the past
month have not altered those conclusions. The slight decline in wool prices
in the domestic market in Dece ber was accor.Fanied by declines in foreign
prices, and the spread between -Doton and London :-ricos showed little change.
The outlook for domestic mill consumption in the early months .of 1139
continues favorable. Orders for men's wear fabrics for the spring season
are much lar,'.r than a year earlier. In view of the small stocks of
manufactured wool goods and the material increase in consumer purchasing.,
po-'.cr in recent months, orders for fall season fabrics to be placed within
the next few r.:onths, also arc expected to show a considerable increase
over the previous year.
Mill consumption of wool has increased in some European countries in
recent r.onths. By Decor.bear 1, the relatively large carry-over into the
1'33'-39 season in the Southern ;I:risz;hero had been offset by the smaller
production in Australia and an increase in exports. Available supplies in
the five Southern Horeisphcre countries as of December 1 were smaller than
a year earlier and also wore smaller than the Dececber 1 average for the
5 years 1 .-36. Henco, the outlook for disposal of the 1938-39 clip of the
Southern :..:iphcre is now more favorable than at the beginning of the
season in July.
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prices of most wools declined slightly during the final London auc-
tions of 1938 which closed-December 7. At.the close of the series prices
of greasy fleece wools in English currency were about equal to or slightly
lo.rer than at the close of the previous series on September 30.
The increase in the exchnr.e value of the English pound in the early
part of Dece':.ber, which had the effect of increasing foreign prices in terms
of United States dollars, was completely lost by January 3 and-the average
rate of exchange for December was the lowest for any month since October 1933,
Quotations of London prices in United States dollars reflect changes
in the exchange rate of the En_:lish pound as well as ch-'r:.es in wool quota-
tions, Monthly average prices in United statess dollars for fine and medium
grades of wool on a clean cost basis at London in D-cer.ber were the lowest
Southern Hemisphere sales
Wool prices in Austr alia have shown little change since the 1976-39
season opened in September. Although prices were li,:htly irregular in the
latter part of November and early Dicc.cb.r, sales continued good and prices
were reported firm and ui.cha iJ ed when the sales reoFn.r-d at Sydney after
the holidays. On the basis .of export statistics from July through November
of the current season, sales of Australian wool to all of the principal wool
importing countries, except Germany and Italy, have been much larger than
in the same months of the previous season. Total disposals of wool from
July to November were about 18 percent larger than in the same months of 1937.
The price of Australian 70s warp wool at the Sydney sales in November
averaged 45.2 cents a'pound clean basis, delivered Bradford, compared with
44.9 cents in October and 57.7 tents -in o;'.'or.b.r 1937. uotations on
average quality wools, declined slightly in November.
The average price of 70s warp wool at South African selling centers
iniN'ov-..ib-r was 44.4 cents a po6uiLd clean basis, -cQrpared with 45.1 cents
in.October and 53.1 cents in Navembcr 1937. A iqline of about 1 cent per
pound was reported in prices of such wool in the first half of December
before the markets closed for the holidays.
Wool prices were firm in New Zealand during December. Luropoan
countries were the princiFal buyers and the United States purchased rather
Sales of South American wools in the current season have been re-
latively large but prices have declined in recent months, according to
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SuIcrl:es in Hyithern H':.:isphere December 1
On December 1, aecarent su-ilies I/ for disposal in the five
principal Southern :-:ri;-here wool exporting countries duringg the remainder
of the 193-39 sc'=ing season were estimated to be about 2 percent smaller
than a year earlier and also 2 percent smaller than the average supplies
as of D--c.:-.' r 1 in the 5 years 1932-36.
Exports of.wool from Australia, the Union of South Africa and New
Zealand in the first 5 months (July through l;ovember) of the current season
were 18 pcrccnt larger than a year earlier, and were 3 percent larger than
avera-e exports for those months in the 5 years l':32-36. Exports from
Ar.-r.tina and Uruguay in Cctobcr and November, the first 2 months of the
So-th American export season, also exceeded those of the previous year as
well as the 5-year average.
1/ Carry-over from ;r.c--di-ng season plus estimated production, minus exports
from b.: -nr.ir:g of s%;ason to end of ::ov: ibocr,
,7:ol exports from five Southern Hemisphere countries to NIovoe-bcr
30 of the 1'i3-39 season, with cor~parisons
Country : Friod Average : 1936: 1937 1938 1/
~- -- 1932-36 __ _
: I million M nilion lion iion million
: : pouounds cunds pounds pounds
Australia 2/ ............:Jul:,-ov. : 3317 320.9 295.0 350.5
Union of South Africa 3/ : .* 75.7 73.6 57.4 69.1
New Zealand 2/ ..........: n 32.7 32.7 32.0 33.5
Total 3 countries ....; : n 1 : 440.1 427.2 384.4 453.1
Argentina ./ ............:Oct.-::c : 31.1 30.6 15.0 43.9
Uruziay ...............: : 13.2 11.6 2.6 14.6
Total 2 countries .....: : 44.3 42.2 17.6 58.5
1_/ .--.,i i.i i-r:..r,-.
2/ Estimates of Dalgcty and Company.
3/ Official estimate.
/ Co.eorcial estimates supricd by the Buenos Aires office of the Bureau,
Tatle li-Prices of ':ool per pound irn speified s.arets and prir~s of
textile raw -st-.-rials in the United States, selected reriods, 1926-38
: _ver_ e : Dec. : 198
Market and 'es:rirtion
: 197 : 1_9_7 : 1937 : Oct. : Nov. : Lee.
Boston: : Cents rents Cents Cents Cernte Cents
Tgritory combir.g, scoured
basis 64s, 70s, 80s (fine) : 92.0
56s (3/8 blood) 80.4
46s (low 1/4 blood) 65.9
United St tes: '
Farm price, .15th of month,
grease basis 26.9
Average quality, clean cost2:
70s : 58.4
46s : 23.8
64s warp : 59.8
50 s 29:7
Average price at selling
centers, grease wool 4/ 23.0
Sydney (delivered Bradford)
70s warp, clean basis 5/ :6/ 62.9
Union of South Africa:
Average export price greasy :
Price at selling cent.r,70s :
warp, clean cost 8/ :7/ 59.2
Coarse crossbred, greasy 10/ :11/15.6
C.ossbred, greasy 13/
Fine 50/56s-6Cs : 34.2
Coarse 32/36s-44s : 27.9
Textile fibers- 15/:
Wool, territory fine staple : 92.0
Cottor., 7/8 F;iddlin; 16/ : 11.9
Silk, Japanese 13-15 17/ : 176.6
Rayon yarn, 150 denier 18/ 5.6
64.7 52.0 43.6
45.2 ,.35 27.8
"24.7 22.0 16.2 17.1
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Table l.-Pries of wool 'e-r pound in speified markets and prices of
textile ra-: materialss in the United Stittes, selected periods,
Foreign prices have been converted at prevailing rates of exchange.
Yearly aver-",s are averages of r.onthly prices except United States farm
price which is a weighted av-.rage.
1/ Av ra-e? of quotations for each series of London sales reported by the
London office of the Bureau. *For months when no sales were held, figures
2/ Top and noil in oil.
3/ Quotations reported, about the 25th of the month by the London office of
4/ Reports of the ..ational Council of Wool Sellin. Brokers.
5/ Monthly averages of-weekly quotations from the Wool Record end Textile
'6/ 7-month avrcge. '.o quotations April to August.
7/ 8-month average. :No quotations May to Au:u:st.
8/ South African Ministry for Agriculture.
9/ 10-month average. No quotations July and August.
10/ V:'cls of South and Southeast Eiucnos Aires Province. Revista Quinconal de
Pre'ios Salaberry Bercetche & Cia.
11/ 10-month average. No quotations Au'iust ar.d Sctczmb.r.
12/ 4-month average. ;1o quotations April" to .overbcr.
13/ Boletin de Hacienda, Uruguay.
14/ 6-month av~rare. No. quotations May to October.
15/ Scour,:d basis at F.ostor..
16/ Av-:-r- at 10 markets.
17/ 78 percent white at LA. York-Bureau of Labor Statistics.
ID./ Eural'u of Labor Statistics.
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Table 2.-United States: Wool imports, consu-wmrtion and machinery
activity, specified periods, 1977-95
Imports for consumption,
actual weight: 1/
Finer than 40s
Hot finer than 40s
basis: 2/ (Weekly av.)
Machinery activity: 2/
Carpet and rug looms
Jan. -ov. : ':ov.
19-7 : 93 : 19
1 ,., 0,.
I -'2 0:-
: 0.t. : Nov,
6,220 10,436 11,963
2,651 4,924 5,878
682 1,732 1,918
10,604 24,619 23,512
2,"'8 8,660 7,716
Percent Percent Percent
Import figures from official records of the Pureau of Foreign and Domestic
Commerce, Consumption and Machinery Activity from the Bureau of the Census.
1/ Weight of greasy, scoured and skin wool added together.
2/ Figures for November based on 4 weeks, October on 5 weeks, January to
November on 48 weeks. No adjustment made for holidays.
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