Weekly Market Reports


25 September 2020

Friday, September 25, 2020

WEEKLY MARKET REPORT

Week Ending 25th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S13/20

This Week

M13/20

Last Sale

S12/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1611

1641n 1474 +137 2003  -392

18

1407

1398

1279

+128

1965

-558

19

1208

1231

1096

+112

1871

-663

20

1104

1104

994

+110

1843

-739
21 1075n 1073 956n +119 1828n -753 
 26 668n 670n 623n +45 1240n -572

28

489n

483

466n

+23

988n

-499

MC

723n

703n

673n

+50

993n

-270

A THREEPEAT - IS THERE MORE IN STORE??

The talk of the anticipated rising market late last week came to fruition but much more than anyone was prepared to call. A frantic opening session was followed by a more measured approach on the final day but still the market did what growers had been yearning for, a big lift in prices. The AWEX EMI climbed by a massive 99 cents to 1036 to add up to a 178 cent lift (21%) over the past 3 weeks. The gain in US$ terms was 53 cents to 739 as the falling FRX to 71.35 certainly helped. This series’ opening day’s rise of 59 cents (6.3%) was the largest daily gain in 12 months and the largest weekly lift over the same period. This recovery goes part of the way to cancelling out the 27% (276 cents) fall the market suffered through August and early September. Merino fleeces all rose by triple figures, 100 to 140 cents with no type neglected. Skirtings also rocketed back to reasonable levels with < 18 micron adding 120/180 cents and broader lots 80 to 100 cents to the good. Cardings continued to claw back their lost money as the 3 centres’ MCIs averaged 60 cent increases. All descriptions added 50 to 130 cents depending on style, micron and VM.

The new business that was written 3 weeks ago has kept coming to most people’s surprise. One buyer we spoke to said the enquiry on Tuesday night was the highest level for 18 months thus giving exporters a new aura of confidence to do more business. Local traders led the recovery with Chinese indent orders and overseas top-makers sniffing around the edges. In other good news European and Indian orders were in the market with Italian mills picking the eyes out of this week’s designated Superfine sale selection (albeit at small volumes) but the more enquiry coming normally converts to fresh business being written and increased competition. The same buyer seems to think that these levels could be the base from which the market can go forward providing growers don’t flood the market with wool held in store that has been waiting for price increases that we have seen over the past 3 sales.

Ram sales continue with great results. This week’s sales have gone like this: Bella Lana at Wellington cleared all 125 rams for a top of $10,000 to average $2,490; Gullendah at Yeoval offered a mix of Dohne and Polls (140) to sell all but 1 poll ram. The Dohne’s averaged $3,115 to top at $5,000 twice and the Polls averaged $2,100 with 2 rams selling for $4,000. Tara Park at Boorowa achieved a top price of $10,500 to average $2,520 selling all but 2 rams. Trynow at Goolma had a top price of $1,600 5 times for an average of $1,070 to clear 86%; Poll Boonoke and Wanganella at Conargo sold all 200 rams to average $3,470 with a top of $13,000; also in the Riverina at Pooginook, Jerilderie, the mix of Polls and horned rams had a 98% clearance with a top of $7,000 for a poll ram with the top merino making $4,000 with an overall average of $2,625; Lachlan Merinos at Forbes sold all their 140 rams with a top price of $11,500 to average $4,075; a $10,500 top price was achieved by Coddington Uardry Poll at Dunedoo with a total clearance to average $1,740; and Calga Dohne stud at Coonamble sold all 73 rams for a $4,000 top price twice and an average of $2,375. Next week’s catalogue has grown to 33,200 bales. Will the market hold at these levels??

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

960

Main Buyers (This Week)

1

Techwool

3656

2

Endeavour Wool

3286

3

Fox & Lillie

2420

4

Aust. Merino

2074

5

Lempriere

2039

6

Modiano

1768

Eastern Market Indicators (AUD cents/kg clean)

1036 cents é 99 cents compared with 18/09/2020

Northern Market Indicators (AUD cents/kg clean)

1086 cents é 93 cents compared with 18/09/2020

   AUD/USD Currency Exchange

0.7133 ê 0.0185 compared with 18/09/2020

18 September 2020

Friday, September 18, 2020

WEEKLY MARKET REPORT

Week Ending 18th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S12/20

This Week

M12/20

Last Sale

S11/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1474

1456n 1420n +54 1967 -493

18

1279

1283

1207

+72

1902

-623

19

1096

1085

1045

+51

1775

-679

20

994

980

949

+45

1743

-749

21 956n 949 926n +30 1735 (M) -786 (M)
 26 623n 626n 591n +32 1195n -572

28

466n

466

441n

+25

953n

-487

30

-

374n

365 (M)

+9 (M)

791n (M)

-417 (M)

MC

673n

639n

638n

+35

934n

-261

TWO WEEKS RUNNING. WILL IT BE THREE?

The increased volume for this series looked to be problematical for exporters when valuing for this week’s sale as all the talk was for a cheaper market that was most likely going to erase last week’s gains. By the commencement of sales, sentiment had changed for the good with solid increases as the week progressed. The AWEX EMI added 47 cents (5.3%) to 937 with a similar gain in US$ terms - 43 cents (6.5%) to 686 cents. The extra 1% gain in US terms came about from the upward shift in the FRX. Normally this would be a hinderance to the market’s direction but helped the market this week as the FRX strengthened over the course of the sale to 73.20 cents, up by 1 cent. Merino fleece prices rose across the board from 30 cents for 21s to 70 cents for 18 micron. The highlights were in Melbourne and Fremantle where 17.5 and 18.5s rose by 100 to 115 cents something we haven’t seen for some time. Skirtings were also caught up in the increased demand as < 18.5 micron jumped by 50/80 cents with the broader selection gaining 30 to 50 cents. Cardings continued to make upward adjustments with the 3 MCIs averaging 30 cent rises as all types in this sector made gains from 30 to 100 cents. Crossbreds weren’t left behind as they continued their rise from the ashes with most microns lifting by 20 to 70 cents.

Chinese buyers led the charge with some European orders from forward sellers and indent top-makers. Fresh business coming from an increase of enquiry that has converted into firm orders is something that has been lacking in the market since sales resumed in August when speculative stock buying was non-existent and the odd new order was filled easily as no big volume of new business was written. Is there a change in the wind?? Two weeks of rises doesn’t lend itself to a full-blown recovery but any rise in any commodity is always welcome. Of course, the elephant in the room is the 2nd wave of Covid-19 that is rampant in some countries and lockdowns and restrictions are being re-introduced hindering economic growth. The widespread release of a vaccine in the Northern Hemisphere (our critical markets) will go a long way to getting people back to work quickly and consumers spending money again without fear of not being treated if they catch the virus.

Ram sales continued this week with some outstanding results for both Merino and XB studs. Some results include: Gullengamble at Yeoval clearing 91% for a top of $6,500 3 times to average $2,590; Yarrawonga at Harden sold 97% to average $2,975 with a top of $16,000; Gilgandra’s Weealla stud sold 97% of their draft for a top of $4,000 to average $1,660 ($260 higher than last year). Another local stud, Roseville Park, cleared all 210 rams to average $2995 with a top of $26,000 these 3 studs offering a mixture of Poll and Horned rams. Merryville stud at Boorowa sold 101 rams with a top price of $6,000 to average $1750 and the MPM Stud (Multi Purpose Merino) at Girilambone cleared all of their draft for a top price of $3,200 to average $1,540. Next week’s national catalogue is 25,000 bales with a designated super-fine sale in Sydney. Showfloor talk has the market dearer again.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

960

Main Buyers (This Week)

1

Techwool

3338

2

Endeavour Wool

3253

3

Lempriere

3195

4

Fox & Lillie

2313

5

PJ Morris

2073

6

Aust. Merino

1669

Eastern Market Indicators (AUD cents/kg clean)

937 cents é 47 cents compared with 11/09/2020

Northern Market Indicators (AUD cents/kg clean)

993 cents é 38 cents compared with 11/09/2020

   AUD/USD Currency Exchange

0.7318 é 0.0098 compared with 11/09/2020

11 September, 2020

Friday, September 11, 2020

 WEEKLY MARKET REPORT

Week Ending 11th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S11/20

This Week

M11/20

Last Sale

S10/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1420n

1369 1382 +38 1930 -510

18

1207

1193

1172

+35

1853

-646

19

1045

1024

995

+50

1755

-710

20

949

919

910

+39

1682

-733

21 926n 904 898n +28 1645n -719
 26 591n 571 526n +65 1165n -574

28

441n

438

396n

+45

953n

-512

30

-

365

319 (M)

+46 (M)

818n (M)

-453 (M)

MC

638n

609n

637n

+1

906n

-268

A SLIGHT RISE BUT ….

Talk of a reversal of the downward trend of prices rang true early in the series but the newfound optimism and hope that the market may have finally turned the corner went as quickly as it arrived as prices faded late in the sale. The falls weren’t as large as the rises so the AWEX EMI posted its 1st weekly gain since early July (following 5 weeks of falls totaling 276 cents) a rise of 32 cents to 890. The fall in the FRX to 72.2 cents had the EMI add just 12 cents to 643 in US$ terms. All fleece microns finished the sale 30 to 55 cents higher; the opening session’s rises saw 99% sold. Skirtings also saw a sharp increase in demand with all descriptions jumping by 30 to 50 cents as again growers were happy with the price hike to clear 98%. Cardings also rose but not to the extent of their combing counterparts as < 18.5 micron for all types added 20 to 30 cents to their previous values. Crossbreds also lifted themselves off the canvas to add 60/80 cents for 26s and finer while broader types were 30 to 50 cents dearer.

The sudden surge of enquiry late last week came almost exclusively from Chinese manufacturers converting virtually no demand into a dearer market that required prompt delivery which meant contracts had to be met quickly. This new business was the first real action to arise since the season opened in July. Exporters facing harder and leaner times need to cover risk quickly to maintain the funding of overheads with diminishing opportunities of trade while attempting profitable conclusions to those limited orders that are available at the moment. The new enquiry coincided with the smallest national catalogue since mid June and a favourable swing of almost 2% in the FRX the short lived price rise saw the national pass-in rate drop to just 6%, the highest clearance rate since July.

The Australian Bureau of Statistics has released data on wool exports for July which don’t paint a pretty picture. The total volume of wool exported was 8% less and the value was a massive 37% down when compared to July, 2019. Exports to China and Thailand were actually up by 8% and 13% when compared to July last year but exports to Europe fell by 59% and an incredible 79% in value while the volume to India saw a 37% decline in volume with the East Asia trio of Japan, Korea and Taiwan having a reduction of 45% from the previous July. All major wool processing countries saw declines also except Germany - their exports rose by 27% year-on-year for July. Other destinations saw declines: Italy back by 14%; Czech Republic down by 38%; and India 12% less. These figures are a stark indication of the falling wool market due to weak consumer demand.

Ram sales commenced this week with good results recorded so far. Kerin Poll at Yeoval offered 500 rams with a total clearance to top at $10,000 to average $3,100, up by $590 on last year. Hadden Rig at Warren also conducted their sale this week offering 230 rams - a mixture of poll and horned rams for another high clearance rate. Their top price of $12,000 was achieved twice - one poll and one horned with the poll rams averaging $3,210 and the horned selection averaging $2,525. An increase in volume to 33,000 bales next week will test the market. 

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

870

Main Buyers (This Week)

1

Endeavour Wool

2423

2

Lempriere

2268

3

Techwool

2013

4

United Wool

1751

5

Aust. Merino

1366

6

Fox & Lillie

1347

Eastern Market Indicators (AUD cents/kg clean)

890 cents é 32 cents compared with 04/09/2020

Northern Market Indicators (AUD cents/kg clean)

955 cents é 36 cents compared with 04/09/2020

   AUD/USD Currency Exchange

0.7220 ê 0.0135 compared with 04/09/2020

4 September 2020

Friday, September 04, 2020

 WEEKLY MARKET REPORT

Week Ending 4th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S10/20

This Week

M10/20

Last Sale

S09/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1382

1340 1448n -66 1842 -460

18

1172

1153

1249

-77

1783

-611

19

995

998

1085

-90

1578

-583

20

910

900

991

-81

1497

-487

21 898n 869 976n -78 1487n -589
 26 526n 546n 645n -119 1100n -574

28

396n

408

436 (M)

-28 (M)

849 (M)

-401 (M)

30

-

319n

368 (M)

-49 (M)

703 (M)

-384 (M)

MC

637n

581n

663n

-26

814n

-177

MARKET DIRECTION – ANYONE’S GUESS BUT WHO KNOWS??

The wool market continued on its sorry path downwards this week as little to no new business was written and, as we forecast, the EMI fell below 900 cents. The ascendency of the FRX by over 2.3% to 74 cents certainly didn’t help but the main factor was, again, the genuine lack of demand. Both days saw double digit falls for all types in all sectors. The EMI dropped by a further 71 cents to 858 and, with the stronger FRX, the fall was 37 cents in US$ terms to 631. Merino fleeces lost 65 to 90 cents across most lots with the Best style FNF, sound types up to 30/50 cents lower. Skirtings also took a hammering as losses ranged from 30 to 80 cents. Despite these heavy falls growers were willing to meet the market as just 7% was passed-in. After last sale’s unexpected rises cardings followed the combing types lead to cheapen as well with broader than 17.5 micron STN and CRT 20 to 30 cents back with all other descriptions either side of unchanged. The sorry state of the XB market continued with heavy losses for the finer microns; 26s collapsed by 120 cents in Sydney and 155 cents in Melbourne with all other microns falling by 30 to 50 cents. At just 190 cents (clean) 32 micron are at their lowest point since AWEX records began in 1995. AT these levels most XB fleeces (26 to 32 micron) are only bringing mid 300 cents to low 100s based on a yield of 70%, barely enough to cover shearing expenses.

Local traders dominated buyers’ lists this series with Chinese topmakers and Indent buyers adding some muted competition on the final day. Reports that European wool merchants are nearly all back from holidays and may lift the abysmal levels of enquiry over the next few weeks will be cautiously welcomed but growers shouldn’t be holding their breath. As usual, AWTA released their monthly testing figures this week. A massive 20% less wool was tested in August compared to the same month in 2019 and the progressive total for the season so far is 17% less than last season - 31.4mkg to 38.2mkg. In a surprise figure 11,680 bales (or 6.4%) more have been sold to the trade to date this season than last, this despite the market being a whopping 37% cheaper than 12 months ago and 750 cents (50% cheaper than the opening sale in January). Reasons could be varied for the extra sell-off from paying off feed or farming bills to just quitting their wool before the market gets any worse.

Increased demand will be the only thing that will pull the market out of this rut. A huge concern is the “2nd wave” of Covid-19 that some countries are experiencing and indeed some countries not getting on top of their 1st wave. If lockdowns and restrictions are enforced again or extended economic recovery will be even further stalled than is anticipated costing governments $billions extra in stimulus and welfare packages for their populations. More and more protests globally against these harsh restrictions may well lead to governments realising that, for the sake of the sanity of their people and their own political existence, a quicker return to normal life will speed up economic growth and may need the pandemic to run its course till a vaccine is released - the course of action they need to adopt??

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

870

Main Buyers (This Week)

1

Techwool

3297

2

United Wool

2134

3

Tianyu Wool

2047

4

Endeavour Wool

2005

5

Fox & Lillie

1273

6

Seatech Ind.

1122

Eastern Market Indicators (AUD cents/kg clean)

858 cents ê 71 cents compared with 28/08/2020

Northern Market Indicators (AUD cents/kg clean)

919 cents ê 63 cents compared with 28/08/2020

   AUD/USD Currency Exchange

0.7355 é 0.0162 compared with 28/08/2020

28 August 2020

Friday, August 28, 2020

 WEEKLY MARKET REPORT

Week Ending 28th August 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S09/20

This Week

M09/20

Last Sale

S08/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1448n

1438 1445 +3 1845 -397

18

1249

1228

1239

+10

1795

-546

19

1085

1062

1076

+9

1593

-508

20

991

979

1025

-34

1515

-524

21 976n 952 1016n -40 1499n -523
 26 645n 700 680n -35 1133n (M) -433 (M)

28

-

436

465n

-34 (M)

846 (M)

-410 (M)

30

-

368

428 (M)

-60 (M)

698n (M)

-330 (M)

MC

663n

624n

621n

+42

806n

-143

SMALL QUANTITY – SMALLER DEMAND!

The sorry state of the wool market was no more evident than this week as the market slipped further with only the 2 eastern seaboard centres in action. As we predicted the reduced weekly volume of just 20,500 bales - the smallest this season and the least offered since mid June - couldn’t sustain the market. The AWEX EMI lost another 16 cents to 926 with the fall identical in US$ terms (16 cents to 668). A reduction in the FRX by half a cent to 71.90 and the designated superfine sale in Sydney were not enough to keep the market from falling. With the finer superior style offering in Sydney, < 19 micron did show an ounce of resilience with the indicators up to 10 cents dearer with the odd lot attracting a premium up to 60 cents but 19s and broader dragged the overall market into the red as they fell by 10/55 cents. The story was similar for merino skirtings as the better style types were either side of firm while the broader/burrier types gave up another 20 to 30 cents. The carding sector bucked the downward trend of all other sectors and rebounded after 3 series of heavy losses (180 cents). LKS led the price recovery with gains of 40 to 70 cents while CRT/STN added 20 to 30 cents, a welcome rise after the recent battering they took. Crossbreds also contributed to the EMIs fall as all microns from 25 to 32 gave up another 20 to 60 cents. With some sectors of the market maintaining a ‘status quo’ or increasing in price the pass-in rate dropped sharply, to just 11%.

Chinese top-makers dominated buying lists with local trading exporters making some sort of impression across most types with the superior selection encouraging some interest from Italian mills on the very best types on offer. The bread and butter fleece wools from 19 to 22 micron (which was the easily traded and most used type) are struggling to capture any demand and continue to be out of favour with most processors. This is reflective of how current volume is unable to be moved swiftly through the supply chain.

The National Sheep Show and Ram Sale was held in Dubbo this week but under a Covid-19 affected format. Less studs were on show (34) and no commercial sheep on display or to be judged. There was no Supreme ram judged due to national travel restrictions not allowing any interstate champions to be on site to go up against the NSW champion. The auction was interfaced with Auctions Plus with 47 rams up for sale. Top price went to local stud, Roseville Park, with a sale topping price of $31,000 bought by Chris Bowman on behalf of a syndicate of 4 Australian and 1 NZ stud. Their draft of 8 rams averaged $9185. Other results included: Langdene, Dunedoo - 4 rams sold for a top of $10,000 to average $6125; Nerstane, Woolbrook - 1 ram sold for $6,000; West Plains Poll from Delegate sold 1 ram for $10,000; Adina, Cooma topped at $5,000 to average $3,500; Darriwell, Trundle sold 2 rams to average $6750 for a top of $10,000; and Coddington, Uardry achieved a top price of $3,500 to average $3,250. The 32 rams sold for an average $6155. Next week has all 3 centres in action with a catalogue of 33,000 bales. If more business isn’t forth-coming the market will struggle to stay above 900 cents.

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Oct/Nov 20

925

Main Buyers (This Week)

1

Endeavour Wool

2584

2

Techwool

1794

3

United Wool

1758

4

Tianyu Wool

1714

5

Fox & Lillie

1399

6

Kathaytex

1024

Eastern Market Indicators (AUD cents/kg clean)

929 cents ê 16 cents compared with 21/08/2020

Northern Market Indicators (AUD cents/kg clean)

982 cents ê 9 cents compared with 21/08/2020

   AUD/USD Currency Exchange

0.7193 ê 0.0052 compared with 21/08/2020

21 August 2020

Friday, August 21, 2020

 WEEKLY MARKET REPORT

Week Ending 21st August 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S08/20

This Week

M08/20

Last Sale

S07/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1445

1415

1499

-54

1952

-507

18

1239

1221

1284

-45

1888

-649

19

1076

1090

1143

-67

1728

-656

20

1025

1020

1100

-75

1683

-658

21 1016n 998 1086n -70 1667n -651
 26 680n 731 788 (M) -57 (M) 1148n (M) -417 (M)

28

465n

470

523n

-58

870n

-405

30

-

428

454 (M)

-26 (M)

701 (M)

-273 (M)

MC

621n

618n

651n

-30

895n

-274

DEMAND FALLS - MARKET SLIPS UNDER 1,000cents!

Last series’ small glimmer of hope that the consolidation of merino fleece prices may have finally signaled an end to falling prices and the AWEX EMI staying above 1000 cents was not to be. Another sharp correction across all sectors this week dashed any hope that the market could sustain prices above the 1000 cent “psychological” level at which many in the industry had probably hoped more than predicted  that the market would not fall under. The EMI lost 59 cents to 945, a 6% fall, now its lowest level since October, 2012. The fall was 30 cents in US$ terms to just 685 as the FRX ascended to 72.50 cents, up 1.25 cents for the week and its highest point since February 2019.

From the opening lot prices softened on all types in all sectors. Merino fleeces fell by another 30 to 75 cents with very little premium for NM lots or FNF types. Skirtings also suffered big losses as 17s and broader (regardless of VM) fell by 20 to 80 cents with superfine types < 3% VM just into buyers’ favour. After their big fall last week cardings also were cheaper but didn’t suffer losses like the previous series. All types in this sector fell by 20 to 35 cents. Crossbreds were the sector to suffer the biggest hit. 27 micron and finer collapsed by 80 to 140 cents while all other microns gave up 30 to 70 cents. 42% of the crossbred offering was passed-in in Sydney. Once again large European top-maker, Modiano, was the dominant buyer for this sector snapping up 27%, perhaps the only exporter to see value in these low price wools.

The market’s large fall saw pass-in rates soar to 26%, up from just 8% the previous sale, to see just 24,600 bales sold to the trade from the 33,100 offered but even this small quantity couldn’t be met with enough demand. The almost 2% upward shift in the A$ didn’t help but was by no means the sole contributing factor to the downward spiral the market is experiencing at the moment. Chinese topmakers dominated the merino combing sector but under limited competition especially for “off types” and the dwindling volume of dusty low yielding wools. Local and overseas traders fled to safety  as incomplete or easier traded types came under buyers’ scrutiny but the distinct lack of new business once these few outstanding orders were filled saw a few buyers barely bid and the market fell as no-one is prepared to buy “on spec’ in the hope of selling that wool post purchase to downstream users. Speculation has completely gone from the modern day traders psyche. It seems no buyer is risking purchasing any quantity of wool that hasn’t been sold on down the processing pipeline. It’s interesting to note 1.2% more wool has been offered to date this season than last and 7% more has been sold even though the market is a massive 37% cheaper. Just the 2 eastern seaboard centres are in action next week with 22,300 bales on offer. In this demand-poor climate, this may be too much wool.

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Oct/Nov 20

985

Main Buyers (This Week)

1

Endeavour Wool

2799

2

United Wool

2558

3

Tianyu Wool

2299

4

Techwool

2140

5

Fox & Lillie

1202

6

Aust. Merino

1086

Eastern Market Indicators (AUD cents/kg clean)

945 cents ê 59 cents compared with 14/08/2020

Northern Market Indicators (AUD cents/kg clean)

991 cents ê 55 cents compared with 14/08/2020

   AUD/USD Currency Exchange

0.7245 é 0.0122 compared with 14/08/2020

14 August 2020

Friday, August 14, 2020

WEEKLY MARKET REPORT

Week Ending 14th August 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S07/20

This Week

M07/20

Last Sale

S06/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1499

1484

1478

+21

2000

-501

18

1284

1275

1272

+12

1932

-648

19

1143

1141

1126

+17

1766

-623

20

1100

1093

1083

+17

1711

-611

21 1086n 1079 1081n +5 1695n -609
 26 - 788 784n (M) +4 (M) 1150n -

28

523n

525

520n

+3

835n

-312

30

-

454

421 (M)

+23 (M)

659n (M)

-205 (M)

MC

651n

651n

716n

-65

993

-342

CAN EMI STAY ABOVE 1,000??

All participants held their collective breaths this week as any downward shift in prices across the board would see the AWEX EMI fall below the 1000 cent mark - a demoralising stat that no-one, especially growers, would not want to eventuate. Thankfully this didn’t happen as slight movements both sides of a solid market had the EMI tract lower by just 2 cents to 1004. The market seemed to split into 2 directions as merino fleece wools edged higher over the course of the series to add 5 to 25 cents to their previous values. Growers seemed to accept the renewed interest from exporters as 95% of fleece types were sold. The twist in the tail came in Room 2 as skirtings < 18 micron finished in sellers’ favour by 10 cents while broader types slipped by 20 to 40 cents. Cardings was the sector that took the biggest hit as CRT/STN gave up another 20 to 60 cents while LKS tumbled by 60 to 100 cents with the carbonising types in this sector struggling to find any level of support post 1st stage manufacturing. The 3 MCIs fell by an average of 72 cents to now range between 651 on the Eastern seaboard to 669 in Fremantle. This seismic downward shift in Cardings caused the EMI to fall rather than stay unchanged or rise slightly. Crossbred’s movements were minimal as most types were up to 10 cents cheaper.

The supply and demand ratio looked about right this series as the 30,300 bales on offer were much more manageable than the previous sale’s volume. National quantities around this figure look about right relative to current demand as just 8% of the offering was passed-in. Local exporters led the consolidation on the opening day as overseas processors were caught off guard but then played catch-up in the final session to push merino combing types dearer. Some Chinese topmakers have moved some quantity to Merino skirtings with European activity concentrating on the Crossbred sector as Modiano again secured 1/3 of this sector. The EMI is now at its lowest point since August 2014 with some wools at 5 to 10 year lows. These cheaper types being used as machinery fodder to keep mills running could be an astute move in the long term as cheaper tops will be on offer when demand down the processing pipeline picks up. Fleece wools must also look attractive at these low levels especially in US$ terms - 21 micron fleece converts to 770 cents, 19s are about 815 and a 17 micron fleece type will cost about 1070 cents on today’s market, cost certainly not the prohibitive factor. After the opening sale in January these same microns were at 1315 (21s), 1350 (19s) and 1440 for 17 micron in US$ terms, even these prices not outrageous for downstream users to make money.

Can the market sustain a level above 1000 cents?? If harsher Covid-19 lockdowns come back in force in the northern hemisphere we may see the EMI collapse even further. Many good judges thought 1000 would be the low point - they may unfortunately be proved wrong. Melbourne’s sale may be held via Zoom next week and extended to 3 days due to Covid-19 restrictions.

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Oct/Nov 20

1075

Main Buyers (This Week)

1

Endeavour Wool

2984

2

Techwool

2962

3

Lempriere

2929

4

Aust. Merino

2316

5

Tianyu Wool

2207

6

Modiano

1954

Eastern Market Indicators (AUD cents/kg clean)

1004 cents ê 2 cents compared with 07/08/2020

Northern Market Indicators (AUD cents/kg clean)

1046 cents é 2 cents compared with 07/08/2020

   AUD/USD Currency Exchange

0.7123 ê 0.0066 compared with 07/08/2020

7 August 2020

Friday, August 07, 2020

WEEKLY MARKET REPORT

Week Ending 7th August 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S06/20

This Week

M06/20

Last Sale

S02/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1478

1476n

1638

-160

2117

-639

18

1272

1269

1428

-156

2075

-803

19

1126

1123

1279

-153

1923

-797

20

1083

1081

1229

-146

1909

-826

21 1081n 1067 1228n -147 1900n -819
 26 765n 784n 866 (M) -82 (M) 1320n -555

28

520n

520

574n

-54

1000n

-480

30

-

431n

466n (M)

-35 (M)

793n (M)

-362 (M)

MC

716n

733n

801n

-85

1040n

-324

A DISASTROUS RESUMPTION!!

While the 3 week winter recess was a welcome break from wool sales and a chance for everyone to catch their breath, it did little to enhance the positive market direction of prices we saw in the 2 opening sales of the season. As is always the case the lag time in receivals saw volumes of wool for the resumption build up to 47,000 bales and the FRX ascended by 2.5 cents to almost 72. This, coupled with a wait and see approach by many buyers, spelled disaster for the resumption of sales as talk of a price reduction of 60/80 cents was well and truly on the cards. If this was only true!! The market opened far worse than this predicted fall as all sectors fell by 40 to 165 cents. The AWEX EMI fell by 101 cents on the opening day of sales. The market steadied in the second session but still suffered losses. By week’s end the EMI retracted by 128 cents (11.5%) to just 1006 with the falls in US$ terms not as bad - a 63 cent drop to 723.  Merino fleece types fell by 145 to 165 cents while skirtings gave up 70 to 120 cents. Merino cardings also suffered heavy losses, washing types (< 3%VM) lost 50/70 cents while carbonising types > 3% VM fell by 80 to 120 cents. Crossbreds were the least affected sector with losses ranging from 40 to 60 cents.

The opening day’s fall of 101 cents was the biggest daily fall of the EMI for exactly 12 months. The fall in % terms in the opening session of 8.9% was the largest daily fall in 17 years. The weekly collapse of 128 cents is the largest since April when it lost 155 cents. The % fall of 11.5% for the week is the largest weekly fall since 1991 when the floor price was abolished and the market nosedived by 39%. The passed-in rate soared to 30% nationally, 51% in Fremantle with their opening session saw them with a pass-in rate of 65%. Another sad statistic is the year-on-year comparison of the EMI, 1006 to 1676 a year ago, a 40% drop in the market.  

No type was immune to the virtual, almost complete lack of interest from some exporters as the “wait and see” approach cruelled the market. Many in the industry questioned the 3 week recess under current circumstances should it have been shortened to 2 weeks and try to reduce the opening sale’s volume to a more manageable quantity that the subdued demand may have been able to cope with. As it turned out 42,700 went to auction with 4400 bales withdrawn and 12,800 passed-in to see only 30,000 bales sold to the trade but this looked to be far too much wool for the trade to handle at this stage. While prices collapsed competition was more widespread as European, Japanese and Indian inquiry lifted, as the major European top-maker, Modiano, bought 30% of the XB selection. Top-makers led the buying lists but enquiry further down the processing pipeline is almost nil, however, low prices can often deliver higher demand and eliminate the stumbling block of oversupply from held grower stocks and passed-in wool. Hopefully the market can steady next week with 33,000 bales on offer. No one wants a repeat of August 2019 when the EMI lost 379 cents - 1754 to 1375.

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Aug/Sept 20

1060

Main Buyers (This Week)

1

Techwool

4799

2

Tianyu Wool

3784

3

Endeavour Wool

3230

4

Modiano

2447

5

United Wool

1956

6

Fox & Lillie

1822

Eastern Market Indicators (AUD cents/kg clean)

1006 cents ê 128 cents compared with 10/07/2020

Northern Market Indicators (AUD cents/kg clean)

1044 cents ê 131 cents compared with 10/07/2020

   AUD/USD Currency Exchange

0.7189 é 0.0253 compared with 10/07/2020

10 July 2020

Friday, July 10, 2020

 WEEKLY MARKET REPORT

Week Ending 10th July, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S02/20

This Week

M02/20

Last Sale

S01/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1638

1658

1586

+52

2175

-537

18

1428

1434

1408

+20

2143

-715

19

1279

1274

1284

-5

2043

-764

20

1229

1253

1221

+8

2033

-804

21 1228n 1253 1200n +28 2037 (M) -784 (M)
 26 - 866 816 (M) +50 (M) 1373n (M) -507 (M)

28

574n

564

564(M)

0 (M)

1045

-471

30

-

466n

466 (M)

0 (M)

861 (M)

-395 (M)

MC

801n

832n

801n

0

1010

-209

A STRONG FINISH!!

Too much wool on offer with the subdued demand for exporters to handle?? Or the realisation that, with the looming 3 week winter recess upon us, this week’s sale would be their last chance to buy any meaningful quantity of wool till early August. Luckily for growers selling in this series the latter came into play. There was a real concern that the 35,000 bales on offer was going to be more than enough for the orders that were placed and a cheaper trend was on the cards, especially for us who were selling last on the final day with the 3rd largest catalogue in Sydney (1550 bales). This was far from the case as a cautious approach by buyers on the opening day pushing the market into sellers’ favour led to a more frantic buying urgency in the final session till the final lots were sold. This saw the AWEX EMI adding 18 cents to 1134. In US$ terms a 14 cent gain to 787 was the result as the FRX looks to be stuck at a whisker below 70 cents - virtually identical to a year ago. Finer and broader fleece types were the beneficiaries of the renewed competition with < 18 and > 21 microns lifting by 20 to 50 cents while 18.5s to 20.5 were just dearer while, in Melbourne, 17.5s rose 90 cents and 21s gained 60 cents. All descriptions of skirtings gained 20 to 30 cents while cardings finished the series just in buyers’ favour. Crossbreds followed the lead of their merino counterparts with prices ascending by as much as 20 to 50 cents. In a coup for our new partnership with Carmicheal & Co. they offered the largest XB catalogue in Sydney this week, 23% bigger than any other broker. Together we had a combined catalogue of 425 bales of XB wool. 

A good finish to the market as we head into a well earned 3 week recess after what can only be described as a 6 month period that as far as the health and economic destruction of the globe has been, historically it will be judged as bad or worse than anything preceding it. Other pandemics and World Wars have taken millions more lives but the economic ramifications could easily outdo the Great Depression, only time will tell. As we stated earlier the rush to secure wool before the 3 week recess led to a strengthening market. This opening 2 week increase for the season (24 cents) and the 28 cent rise over 2 sales in  late May/early June were the only 2 times the market has put together back to back gains since consecutive weekly increases before Christmas (a 66 cent jump to 1558) and, with the opening sale in January gaining another 51 cents to 1605 (117 cents for the 3 sales), today’s prices are a mile away from those levels pre Covid-19 and it could be a very extended period of time before we get close to them again.  

An email outlining Covid-19 market information is below this market report. This is a very informative document that outlines the damage that has been done to global economies by Covid-19 and needs to be read by woolgrowers.

https://macwool.worldsecuresystems.com/LiteratureRetrieve.aspx?ID=254269

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Aug/Sept 20

1170

Main Buyers (This Week)

1

Techwool

4263

2

Endeavour Wool

3441

3

Lempriere

3369

4

Aust. Merino

2540

5

Fox & Lillie

2266

6

United Wool

2146

Eastern Market Indicators (AUD cents/kg clean)

1134 cents é 18 cents compared with 03/07/2020

Northern Market Indicators (AUD cents/kg clean)

1175 cents é 16 cents compared with 03/07/2020

   AUD/USD Currency Exchange

0.6936 é 0.0016 compared with 03/07/2020



3 July 2020

Friday, July 03, 2020

 WEEKLY MARKET REPORT

Week Ending 3rd July, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S01/20

This Week

M01/20

Last Sale

S52/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1586

1598

1592

-6

2133

-547

18

1408

1409

1401

+7

2107

-699

19

1284

1291

1276

+8

2024

-740

20

1221

1219

1212

+9

2009

-788

21 1200n 1194 1197n +3 2022n (M) -828 (M)
 26 810n 816 810 0 1315n -505

28

-

564

551(M)

+13 (M)

1050 (M)

-486 (M)

30

-

466

466 (M)

0 (M)

835 (M)

-369 (M)

MC

801n

826n

814n

-13

981

-180

OFF TO A STEADY START!

With very little demand to support even a national catalogue of as few as 20,000 bales, most people thought this week’s opening sale of the season with 30,000 bales on offer was going to be a bridge too far for exporters. As we predicted last week, if new business wasn’t forthcoming, the market could’ve dropped below 1100 cents. Luckily this wasn’t to be as fresh enquiry led to spatterings of business being written. Also, with the 3 week winter recess almost upon us it was enough to keep the market’s head above water. Two solid days of selling saw the AWEX EMI add 6 cents to its value to 1116. In US$ terms the move was minimal (a 2 cent lift to 772) as the FRX traded in a range from 68.5 to 69.2 cents. All fleece microns recorded single figure shifts - 6 cents for 17s and finer and 3 to 9 cent increases for all others. Growers were happy to take the money as 98% of fleece was cleared in Sydney. Skirtings had a firm sale as all types were tending in buyers’ favour with < 16.5 micron “B” fault, best style skirtings were 30 cents dearer. Cardings continued to slide as the MCI fell by 13 cents to 801 undoing all the rises from a month ago. Crossbreds added 20 to 30 cents to their previous quotes.

Any rise is a good rise! The final 3 weeks of the season had seen the market lose 73 cents to come close to falling below 1100 cents but this week’s mini recovery might delay this unfortunate milestone mark. As was the case in May, a bit of business can lift or see the market stabilise when volumes are not large enough to fill the demand but, on the other hand, when the market is treading water or no demand is in the market even small national catalogues are too big for the market to handle. According to most exporters, a recovery in demand looks to be a long way off. Some restrictions are being lifted in some European countries, a sign that life may be returning to some form of normality but there are still many countries where the pandemic is in its 2nd wave and restrictions are being re-enforced and the brakes being put on economic recovery. As far as employment returning to pre-Covid-19 levels, it could be 12/18 months before the degree of employment is enough to allow economies to get back to full economic production. How quickly consumers feel they are able to spend their discretionary income on non-essentials will be the driver as to when the demand picks up for woolen products and the farm gate price improves.  We must ram home our advantage of a clean, green, renewable, sustainable and traceable product. If most growers were surveyed now this would be the message they would want to be conveyed to consumers when demand picks up. The 2nd sale of the season will take place next week, then we head into a 3 week winter recess. The largest sale since late March (36,000 bales) will be on offer. Hopefully there is enough enquiry about to keep the market where it is and, with the looming recess, limited opportunity to buy wool for 3 weeks.  

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Aug/Sept 20

1170

Main Buyers (This Week)

1

Techwool

4314

2

Endeavour Wool

3704

3

Tianyu Wool

2301

4

Lempriere

2259

5

Aust. Merino

1809

6

United Wool

1696

Eastern Market Indicators (AUD cents/kg clean)

1116 cents é 6 cents compared with 26/06/2020

Northern Market Indicators (AUD cents/kg clean)

1159 cents ê 1 cent compared with 26/06/2020

   AUD/USD Currency Exchange

0.6920 ê 0.0022 compared with 26/06/2020