Weekly Market Reports


27 November 2020

Friday, November 27, 2020

 WEEKLY MARKET REPORT

Week Ending 27th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S22/20

This Week

M22/20

Last Sale

S21/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1844

1824n 1806
+38 1980 -136

18

1560

1576

1570

-10

1863

-303

19

1377

1378

1386

-9

1744

-367

20

1234

1231

1229

+5

1713

-479
21 1178n 1167 1188n -10 1716n -538
 26 768n 783 798n -30 1168n -400

28

490n

488

559n

-69

855n

-365

MC

734n

746n

704n

+30

1054

-320

OUR RELIANCE ON CHINA GROWS!

This week’s sale played out as the several sales beforehand have done in regards to volumes and withdrawn wool and passed-in rates. The anticipated national catalogue of 41,500 bales never eventuated with 12% (5,000 bales) withdrawn prior to auction and, with a flat market, the passed-in rate dropped to 12% from 19% last series to have just 32,000 bales cleared to the trade - hardly a supply overload. For the 2nd time in the last 3 sales the AWEX EMI was restricted to single figure movements, just a 9 cent fall to 1150. With the strengthening FRX to 73.50 cents the market added 2 cents to its value in US$ terms to 846. It was a tale of 2 markets as merinos were mostly unchanged to dearer while the XB sector fell out of favour to suffer big falls. The fleece market started on a cheaper note but did finish the sale strongly with the inferior style types with poor test results (low yields, tender, high mid-breaks and high CVHs) dragging some MPGs into the red. With a designated super-fine sale in Sydney the superior offering saw 17 micron and finer add 25 to 40 cents and more (60/80) as the style improved while all other microns were 15 cheaper to sellers’ favour. All descriptions of skirtings added 10/20 cents from the previous series while cardings recovered all of last sale’s losses as all types in this sector climbed by 15 to 60 cents, the MCI adding 30 cents to 734. Crossbreds were the disappointing sector of the sale and directly contributed to the EMI losing ground. Finer than 26.5 micron fell by 30/50 cents while the broader types were hammered losing 50 to 80 cents with some individual microns falling by over 15%. Buying interest was from across the board from processors to indent operators and traders. When prices lowered or were filled in the opening session there was a quick buyer replacement that stepped in to maintain good competition and price levels indicating a strong book of orders for now.

Have we come to a new price level?? Taking out last week’s 30 cent fall the market, either side of that has barely moved. For the moment the wild volatility seems to have gone but the past 5 sales (10 auction days) has seen the EMI move 560 cents (up and down) a daily average shift of 56 cents. Over the past 3 weeks though the EMI has moved between 1189 and 1150, a 39 cent movement and taking out 2 days when the EMI was at 1188/1189 the shifts have been restricted to 1150 to 1161, a very tight price range.  What does this mean? Have we reached a price point that the wool pipeline is happy with and can all successfully pass on prices at a profitable level? Or are we in a holding pattern till the next upward shift (fingers crossed) or will  the 2nd wave of the pandemic in Europe and the seemingly out of control status in the US stifle demand  due to lockdowns and falling retail activity just when they are on their knees begging for some sort of global Christmas spending recovery. Or will health authorities give the green light to the 4/5 vaccines that are trialing with 70 to 90% success rate. There are reportedly 10s of millions of doses already produced awaiting approval - some maybe before Christmas. We can only hope.

Our reliance on China as a market this season has grown with them now taking 83% of the clip with the next 3 countries (India, Italy and South Korea) buying 8%. The recent “Singles Day” online shopping extravaganza saw $115 billion of merchandise change hands on just 2 major platforms - Alibaba and JD. Hopefully there is some restocking of retail shelves to happen. The importance of the well-heeled Chinese consumer has never been more important. Their woolen clothing purchases for 2019 of 125mkg is more than the next 3 countries combined, USA, Japan and Germany at 115 mkg. Next week’s offering of 41,800 will not make it to auction unless the market finds a new level.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Mar/Apr 21

1120

Main Buyers (This Week)

1

Techwool

4916

2

United Wool

3168

3

Endeavour Wool

3078

4

Fox & Lillie

1896

5

Aust. Merino

1803

6

Tianyu Wool

1659

Eastern Market Indicators (AUD cents/kg clean)

1150 cents ê 9 cent compared with 20/11/2020

Northern Market Indicators (AUD cents/kg clean)

1209 cents ê 5 cents compared with 20/11/2020

   AUD/USD Currency Exchange

0.7357 é 0.0071 compared with 20/11/2020

20 November 2020

Friday, November 20, 2020

 WEEKLY MARKET REPORT

Week Ending 20th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S21/20

This Week

M21/20

Last Sale

S20/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1806

1824n 1845
-39 2008 -202

18

1570

1578

1605

-35

1885

-315

19

1386

1376

1413

-27

1781

-395

20

1229

1228

1278

-49

1738

-509
21 1188n 1174 1226n -38 1729n -541
 26 798n - 838n -40 1200n -402

28

559n

561

600n

-41

899n

-340

MC

704n

768n

731n

-27

1052n

-348

PRICE DIRECTION IS ANYONE’S GUESS!!

The wool market didn’t quite go to script this week as sentiment changed from late last week to pre-sale. Futures trading indicated par to +20 but most exporters were talking the market down before the sale commenced. The talk was spot on as the opening session had all fleece microns giving up 30 to 50 cents. The final day saw a distinct change in sentiment as the market steadied to see some types in sellers’ favour to finish the sale 20 cents lower than the previous week.  Skirtings couldn’t do what the fleece sector did with no second day recovery as falls over the entire sale saw all types and descriptions drop by 40 to 70 cents. Cardings continued to fall as fine LKS < 17.5 micron gave up 65/80 cents with the broader types and CRT & STN 20 to 40 cents cheaper. The MCI lost 27 cents to sit at 704 - the 4th week in a row it has lost ground from the 811 cent high in October - a 107 cent reduction. Crossbreds also continued to lose ground from their highs of 4 weeks ago. All types from 25 to 32 micron fell by 30 to 60 cents and now all about 100 cents from the peak of a month ago. The A$ finished the sale slightly lower than where it was early in the week (73.25), this a factor in the softening prices on the opening day coupled with the anticipated 40,500 bale offering. The AWEX EMI fell by 30 cents to 1159 and lost 24 cents in US% terms to 844 cents.

Most prompt orders had been seemingly covered by exporters last week to leave buyers in a “holding” pattern early in the sale as they waited on a clear price signal from overseas or new business to be written or the market to fall to  new bid levels that downstream users would be happy with to negotiate new business at these price levels. The final days’ price stability coming from a conservative purchasing mode to buy to price advantage rather than accumulate inventory. One of the large Chinese topmakers (Tianyu) looked to ramp up their buying of merino fleece this week to dominate with 20% of the offering, with the next 2 buyers on the list securing 21% between them (Techwool and Endeavour). Traders and 1st stage manufacturers kept pace with the dominant topmaker in the opening session but was outgunned on the final day. Once again the volume of wool to be offered and what actually made it to sale and eventually sold again were worlds apart. The original offering of 40,500 bales failed to make it to auction with over 10% (4,200) withdrawn and, with the falling market, 20% was passed in leaving 29,100 actually sold to the trade. General consensus is that a figure of 40,000 bales/week is enough for current demand to handle but anything over this becomes problematic for exporters to handle. Only 4 sales this season have had a predicted national catalogue of over 40,000 bales and the end result being 10/15% withdrawn and the largest catalogue adding up to 37,500 bales. Next week should be the same with 41,500 rostered but about 37,000 to be actually offered. Surely the Chinese must realise now that the anticipated volume never makes it to sale. Market direction is anyone’s guess depending on which price pattern is followed - weekly or daily movements.

The Responsible Wool Standard (RWS), a farm certification system, has been a growing force in the marketplace of recent times. Big name European and American brands are not only asking for non-mulesed but requesting it with RWS certification. On behalf of our clients we have joined with the Schneider Wool of group of Italy and this week we were the first to be audited in the group’s scheme which includes a couple of other brokers from other regions and states. Around a dozen clients have signed up with the remaining audits to happen between now and Christmas.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Jan/Feb 21

1120

Main Buyers (This Week)

1

Tianyu Wool

4116

2

Techwool

3286

3

United Wool

3174

4

Endeavour Wool

2551

5

Lempriere

1779

6

Aust. Merino

782

Eastern Market Indicators (AUD cents/kg clean)

1159 cents ê 30 cent compared with 13/11/2020

Northern Market Indicators (AUD cents/kg clean)

1214 cents ê 38 cents compared with 13/11/2020

   AUD/USD Currency Exchange

0.7286 ê 0.0021 compared with 13/11/2020

13 November 2020

Friday, November 13, 2020

 WEEKLY MARKET REPORT

Week Ending 13th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S20/20

This Week

M20/20

Last Sale

S19/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1845

1838 1808
+37 2027 -182

18

1605

1570

1578

+27

1920

-315

19

1413

1391

1393

+20

1818

-405

20

1278

1259

1259

+19

1773

-495
21 1226n 1225 1208n +18 1763n -537
 26 838n 840n 838n 0 1204n -366

28

600n

613

615n

-15

910n

-310

MC

731n

781n

764n

-33

1053n

-322

DAY-TO-DAY VOLATILITY – UNHEARD OF!!!

When looking at the market reports for this week’s sale the barest movement in the AWEX EMI of just one cent ascendency to 1189 would suggest the market was pretty stable, something that both sides have been seeking for some time. A closer look at actually what happened tells a very different story. After the final day’s cheaper trend in the last series (if previous weeks’ patterns were any guide), this week’s market was going to be falling by some major margins. By the time the opening lot was due to be sold this savaging of the market was not going to be as bad as was first predicted with spatterings of business done. Fleece prices ranged from 20 to 50 cents back in the first session (showfloor chatter had the losses between 60/80 cents). The final day of selling brought hope of a recovery as Fremantle’s market barely moved and finished par to 20 cents higher than the Eastern Seaboard prices on the opening day. All centres recorded good gains to finish the sale on a strong note. 18.5s could only manage a 1 cent gain for the week while all other microns rose by 20 to 40 cents and, in some cases, a 100 cent turnaround from day to day in identical types. As mentioned earlier it was just a 1 cent gain to 1189 for the EMI. In US$ terms the rise was 16 cents to 869 due to the global strengthening of the greenback on the US election result. Our FRX was up by 2% to 73.10 cents but this didn’t seem to adversely affect the market. Skirtings finished to the good after the roller-coaster ride like the fleece wools. Finer types < 17.5 finished the sale on a firm note with broader lots 10/20 cents higher than the previous sale.  Cardings, unlike their merino combing counterparts, had failed to recover their opening day’s losses with most types falling by 20 to 30 cents. The MCI gave up 33 cents to 731. This large loss for cardings the contributing factor the EMI could only add 1 cent. Crossbreds also couldn’t recover all the opening session’s losses with 26 micron and finer unchanged and broader microns back by 20 to 30 cents for the sale.

The volatility continues unabated not from week to week but, for the past 2 sales, day to day. The wool trade is no stranger to big price swings and volatility but the magnitude of the recent price movements has been on a scale that even veterans of the trade have not seen. This is indicative of current strategies of minimal to zero risk appetite of stock of forward exposure by both seller and buyer. The sudden change in sentiment late in the opening session saw a good recovery in most sectors led by renewed Chinese enquiry seemingly, for the moment, shrugging off the worry and fear that wool could be caught up in trade embargos between our two countries that is involving a raft of exports and uncertain future for some commodities. AWTA figures for October were released with an 18% fall in weight of wool tested when compared to the same month in 2019. The progressive total for the season (July to October) is back by 11.4% (10.8mkg less), 84.8 to 95.6mkg. The amount of wool offered is slightly lower than last season - 8,620 bales (1.6%).

The news of the likely outcome of the US election and, more importantly, news of several vaccines having a 90% success rate in trials being conducted and release dates either side of Christmas sent stock markets and commodities climbing as infection rates in the US climb and Europe is trying to combat the 2nd wave with another round of restrictions and lockdowns. The mass release of a vaccine can’t come quick enough. 40,000 bales are on offer next week and, if futures trading is any guide, firm to 20 cents higher is the most likely outcome.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Jan/Feb 21

1180

Main Buyers (This Week)

1

Techwool Trading

4709

2

Endeavour Wool

3987

3

Tianyu Wool

3495

4

Lempriere

2239

5

United Wool

2535

6

PJ Morris Wool

2461

Eastern Market Indicators (AUD cents/kg clean)

1189 cents é 1 cent compared with 06/11/2020

Northern Market Indicators (AUD cents/kg clean)

1252 cents é 7 cents compared with 06/11/2020

   AUD/USD Currency Exchange

0.7307 é 0.0130 compared with 06/11/2020

6 November 2020

Friday, November 06, 2020

 WEEKLY MARKET REPORT

Week Ending 6th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S19/20

This Week

M19/20

Last Sale

S18/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1808

1810n 1741
+67 1978 -170

18

1578

1579

1516

+62

1875

-297

19

1393

1374

1313

+80

1776

-383

20

1259

1270

1191

+68

1725

-466
21 1208n 1208 1158n +50 1713n -505
 26 838n - 803n +35 1204n -366

28

615n

623

593n

+22

919n

-304

MC

764n

774n

778n

-14

1055n

-291

WILD VOLATILITY SET TO CONTINUE!!!

The market correction we spoke of in our last report was indeed swift but, on the flipside, the downward trajectory that usually follows the large upward jolt was just as quick. The volatility in the market has everyone bamboozled as now the day-to-day wild movements in the market are impossible to predict and harder to keep up with. The market roared away in the opening session only to give back half of the first day’s gains on the 2nd day. We have been fortunate enough to sell on the “dearer” days when the market has lifted significantly over the past few sales. All microns added triple figures to their values on Wednesday (100 to 135) only to give up 40 to 60 cents in the closing session. This saw the AWEX EMI ascend by 50 cents to 1188 for the sale with a 40 cent rise in US$ terms to 853. The slight fall in the FRX early in the week may have assisted the market but then the rise later in the week certainly helped the buyers pull the market back. THE A$ sits well above 72 cents on Friday morning - not a good sign for next week with the national catalogue at 42,000 bales.

All fleece microns finished the sale 50 to 80 cents higher but, looking at the quotes, some identical types had up to 100 cents difference in price from day to day. There was a similar pattern in the skirting sector but, for 17.5 and finer, these types managed to hang on to their 110 to 130 cents gains on the first day with broader lots rising and falling over the course of the sale to finish the week 30 to 40 cents to the good. Cardings also told a similar story to their merino combing counterparts - up on the opening day only to fall more than the initial gains in the final session as the 3 MCIs lost an average of 19 cents as all types in this sector were 10 to 20 cents cheaper. Crossbreds followed a similar pattern to the merinos with good rises on the opening day only to adjust downwards in the final session to finish the sale 20 to 30 cents higher. The passed-in rate fell from last week’s high of 26% to 9% this week (2.6% on Wednesday and 15% on Thursday when the market fell).

The current volatility we are experiencing has been nothing like we have seen before, certainly not to this extent. Over the past 10 selling days, stretching back to early October, the market has moved in total by 466 cents (an average of 46 cents/day). The current purchasing pattern of stepping in and buying like there’s no tomorrow then taking a “sit on the fence and wait approach” to let the market lose all the ground it gained the day or week before is frustrating to all in the industry here and complexing as to how the Chinese can make money when the market is fluctuating so widely within the space of days and weeks. Planning to offer wool on hold is now becoming a lottery as picking a market that might remain solid after a good rise is nigh on impossible as current volatility now rules out any ideas of where the market might be in a week or two.

Also on the horizon is the re-emergence of the pandemic in Europe. Britain went back into lockdown last night with only essential services operating. The inability of consumers to go out and spend money could cruel some EU economies that were getting back on their feet. This could put the wool market’s recovery in a tailspin if Europeans can’t spend in what is one of our most important markets as the big Christmas spending period is approaching fast and a northern hemisphere winter is very close, a peak period for consumers to buy woolen products. As we said earlier 42,000 bales are on offer next week and the cheaper pattern on the final day of this week’s sale looks set to continue next sale.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Jan/Feb 21

1150

Main Buyers (This Week)

1

Techwool Trading

5104

2

Endeavour Wool

3093

3

Lempriere (Aust)

2869

4

United Wool

2239

5

PJ Morris Wool

1289

6

Tianyu Wool

992

Eastern Market Indicators (AUD cents/kg clean)

1188 cents é 50 cents compared with 30/10/2020

Northern Market Indicators (AUD cents/kg clean)

1245 cents é 55 cents compared with 30/10/2020

   AUD/USD Currency Exchange

0.7177 é 0.0033 compared with 30/10/2020

30 October 2020

Friday, October 30, 2020

 WEEKLY MARKET REPORT

Week Ending 30th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S18/20

This Week

M18/20

Last Sale

S17/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1741

1743 1846
-105 1992 -251

18

1516

1503

1622

-106

1928

-412

19

1313

1317

1419

-106

1848

-535

20

1191

1199

1292

-101

1800

-609
21 1158n 1147 1243n -85 1782 (M) -635 (M)
 26 803n 821n 883n -80 1233n -430

28

593n

598

663n

-70

959n

-366

MC

778n

799n

811n

-33

1086n

-308

MARKET CORRECTED BUT RECOVERY WILL BE SWIFT!

The wild volatility that the market has experienced kept going this series with the upward momentum that showed signs of stopping late last week hitting a brick wall this sale. Showfloor talk of a big correction under the weight of a large catalogue was spot on as the market gave back 80% of the previous series’ gains. A big drop on the opening day followed by a more tempered fall in the final session had the AWEX EMI lose 81 cents to 1138 and 50 cents in US$ terms to 813. The FRX did strengthen during the week by 2/3rds of a cent to 71.45. This certainly not helping but not the major contributor to the falling market. All microns were savaged - 16.5 and 21s the only ones not to fall by 100+ cents (90 and 85) with 17 to 20 micron dropping by 100 to 120. On the flip side, however, we did have some fleece lots realise prices above the quotes that had VM, TDR and high mid breaks suggesting the market had steadied late in the final session. Skirtings were also swept up in the big price adjustment as < 19.5 collapsed by 130 to 160 cents with the broader types reduced by 80/100 cents. Cardings escaped to a lesser extent compared to their merino combing counterparts with all types in this sector giving back 70 to 90 cents. Crossbreds also couldn’t sustain their recovery as finer than 28.5 micron fell by 60 to 100 cents while broader types were quoted down by 40/50 cents.

The market’s reaction to the big offering was highly predictable. The magnitude of the previous fortnight’s rises caught everyone by surprise and the fact that there was no “correction” before this week was probably more of a surprise to all in the industry. The anticipated large catalogue of 44,000 bales was, as history has shown, never going to make it to the auction rooms. 6,000 bales (13.6%) were withdrawn prior to sale and, with the high pass-in rate due to the falling market (9,700 bales, 26%), this left just 27,700 bales sold to the trade incredibly 5,000 less than the week before. How can the market fall with figures like this?? Perception can be a difficult thing to gauge with a normal human reaction to a commodity price rise being to try and take advantage of that short term increase in demand which sometimes, on the demand side, is hard to comprehend why suppliers would want to take advantage of the increased interest and have a situation of a “flooded market” which tends to result in a price reduction.

Ram sales have just about wound up in this area with the focus moving to the south of the state. A few more results: Bungulla at Manilla cleared 92% of their draft to average $1,705 with a top of $6,500; Blink Bonnie at Tarana had a top price of $3,500 to average $1,145 and cleared 87%; Hillcreston Park at Bigga achieved a top price of $7,000 with an average of $1,985  to clear 71%; Hazeldean at Cooma held their “Riverina” sale at Hay with a top price of $7,000 to average $2,600 and clear 90%; Cottage Park at Cooma cleared 92% to average $3,265 with a top price of $11,250.    

As the market tries to stage a recovery the elephant in the room is still Covid-19. The pandemic looks to be on a 2nd wave in Europe with fresh outbreaks as big in numbers as the initial stage. Some governments have reimposed lockdowns and restrictions which will slow economic growth and hinder consumer spending - not a good sign for the wool market looking for increased demand. There should be no problem in the short term however. Already the talk for next week is positive and widespread. The losses of this sale should be cut in half. Good luck in the Cup!!

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1140

Main Buyers (This Week)

1

Techwool Trading

3622

2

Endeavour Wool

3064

3

Lempriere (Aust)

3017

4

PJ Morris Wool

2055

5

Aust. Merino

1865

6

Tianyu Wool

1093

Eastern Market Indicators (AUD cents/kg clean)

1138 cents ê 10 cents compared with 23/10/2020

Northern Market Indicators (AUD cents/kg clean)

1190 cents ê 11 cents compared with 23/10/2020

   AUD/USD Currency Exchange

0.714 é 0.0012 compared with 23/10/2020

23 September, 2020

Friday, October 23, 2020

 WEEKLY MARKET REPORT

Week Ending 23th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S17/20

This Week

M17/20

Last Sale

S16/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1846

1820n 1777
+69 1922 -76

18

1622

1615

1543

+79

1865

-243

19

1419

1390

1309

+110

1789

-370

20

1292

1283

1177

+115

1748

-456
21 1243n 1204 1140n +103 1743n -500
 26 883n 886n 753n +130 1160n -277

28

663n

673

520n

+143

899n

-236

MC

811n

816n

763n

+48

987n

-176

SIX MONTH HIGH!!

An explosive opening to this week’s sale as the 1st day’s rise of 123 cents (up to 1240) was 2nd only to the 130 cent daily climb in September, 2019 (S11) in the 20 years of market reporting by AWEX. Prices did soften in the final session in what was quite a week for wool sales. By week’s end the AWEX EMI had added 102 cents to finish at 1219 - its highest point since late April - this surge in the market now stretching back 7 weeks to see a gain of 360 cents (38%). In US$ terms the 1.2% fall in the FRX assisted in holding the EMI in check somewhat rising by 62 cents to 863. Rises for fleece wools ranged from 70 to 130 cents while the skirting selection had a very tight price rise with all types increasing by 100 to 110 cents. Cardings also kept up with their merino combing counterparts and didn’t really suffer any downward adjustment in the final session to add 30 to 80 cents across all types in this sector. Each centre MCI averaged a 45 cent rise to see the 3 MCIs well and truly aligned in price (811 to 816 cents). Crossbreds were also swept up in the price rising frenzy but unlike the merinos which fell on the final day - they added to their values to finish the sale up by 90 to 130 cents (15 to 30%).
After last week’s hefty rises (95 cents) and the 100 cent lift a month ago, all participants were wondering when the inevitable correction would come as it would be a case of when not if. There was a downward price adjustment after the big lift 4 weeks ago, but the recovery was swift - just 1 sale to recover the losses. After the big rise last week many thought this sale would be under pressure but show floor talk of 50 cents or more was commonplace - even with quantities growing by over 5,000 bales after last week’s sale had concluded. It’s always a given that when the wool market rises so rapidly there is a rush to offer wool. Next week is no exception, week to week forecasts have gone up by 6.5% (2,150 bales) from last Monday to this Monday - the latest figure being 44,000 bales up by 20% (8,700) from earlier in the week. Buyers have said for months now that with the reduced demand, the market can only absorb up to 35,000 bales/week - so next week’s quantity could be problematical for the increased volume at current price levels. Since the price recovery started in September the average weekly offering has been 26,800 bales - a big factor in why the market has jumped to its current level from the low point of 858 cents in early September. The volatility over the past 12 to 18 months has been dramatic, the EMI has moved more than 30c/kg on 40% of the auction days so far this season. For a smooth upward trajectory to continue we need a steady increase of demand - not all in and then sitting on the fence as has been the pattern for a long time. Demand for sweaters and uniforms out of China is good hence the latest price rises. Talk that Indian processors look to be recommencing work while Europe is still battling the 2nd wave of the Pandemic leaves us with key markets outside of China struggling to sell woolen garments and fabrics but there is light at the end of the tunnel.

A few ram sale results: Grogansworth at Bowning cleared 97% for a top price of $7,500 averaging at $2,625; Merrignee at Boorowa averaged $2,260 clearing 93% for a top of $4,500; Grassy Creek at Reids Flat sold all 152 rams to average $2,970 with a top of $9,000. Egelabra at Warren also achieved a top of $9,000 averaging $2,975 for all 158 rams offered and Glenwood at Wellington sold all but 2 of their 140 rams penned to average $3,100 with a top of $12,000.

The softer market late this week looks to continue next week under the weight of the largest catalogue since early August.


        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1180

Main Buyers (This Week)

1

Techwool Trading

4,703

2

Endeavour Wool

3,736

3

Lempriere (Aust)

2,248

4

United Wool Co

2,078

5

Fox & Lillie

2,006

6

Australian Merino

1,877

Eastern Market Indicators (AUD cents/kg clean)

1219 cents ê 21 cents compared with 20/10/2020

Northern Market Indicators (AUD cents/kg clean)

1278 cents ê 19 cents compared with 20/10/2020

   AUD/USD Currency Exchange

0.708 é 0.0038 compared with 20/10/2020

16 October, 2020

Friday, October 16, 2020

 WEEKLY MARKET REPORT

Week Ending 16th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S16/20

This Week

M16/20

Last Sale

S15/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1777

1732n 1626
+151 1898 -121

18

1543

1532

1402

+141

1850

-307

19

1309

1304

1195

+114

1763

-454

20

1177

1160

1069

+108

1722

-545
21 1140n 1145 1030n +110 1712n -572
 26 753n 748 693n +60 1160n -407

28

520n

515

484n

+36

899n

-379

MC

763n

754n

732n

+31

987n

-224

HOW QUICK THE SENTIMENT CAN CHANGE!!

The market exploded into action this week as buyers were desperate to secure wool from the opening lot to the final fall of the hammer in Fremantle on Wednesday. It was tipped to be a sedate series late last week with most good judges talking a firm market to sellers. Favour changed late on Friday when the enquiry started from China and kept coming all weekend. As one buyer said, “we got smashed,” with agents keen to book up any type of wool. Futures pointed to gains of 40 cents and the market didn’t disappoint as the AWEX EMI climbed by 44 cents on the opening day. This was followed by even higher rises in the final session (51 cents) to finish the week at 1117, a rise of 95 cents (9.1%). The rise in US$ terms was almost as impressive - a 74 cents gain to 801 - despite the FRX ascending by 0.65% to 71.75 cents. All fleece types were swept up in the dash to secure quantity as all microns climbed by 110 to 150 cents regardless of any discounts on faults. Some of the better superfine (< 18 micron types) were up 200+ from last week’s quotes. Just 36 bales of fleece were passed-in in Sydney - a clearance rate of 99.25%. The skirting sector performed just as good with all types across all microns adding 3 digits to last week’s values. Finer than 18.5 rocketed up by 130 to 180 cents while the broader microns added 110 to 150 cents. Once again, growers liked the new price levels as just 10 bales (0.6%) failed to sell in Sydney. Cardings also enjoyed price rises but not quite to the extent of their combing counterparts. All types < 17.5 micron lifted by 90 to 120 cents while the broader wools were 30 to 60 cents to the good as the 3 MCIs now range from 788 to 754 cents. Crossbreds, like the carding sector, didn’t have the hype of the merino combing wools but still rose 50 to 70 cents for 27.5 and finer and 30 to 40 cents for the coarser types.

Traders were again the dominant force in pushing the market up with 1st stage manufacturers appearing in the top 5 buying positions for merino skirtings and cardings. Risk mitigation is key in these trying times and the buy and sell prompt methodology is working in favour of the inventory building traders. The frantic enquiry over the weekend and the steep opening session’s price rises didn’t deter Chinese mills from baulking at the new levels which could form a basis for the foreseeable future. One buyer told us every bale they bought on Tuesday was sold by 7:00 that night. The EMI now sits just 7 cents below the Sale 2 level with < 19 micron all higher than in July - before the rot set in when sales resumed in August. Since the resumption the market has collapsed and then recovered 276 cents, most of that over the past 6 weeks. Fremantle had its largest daily gain (113 cents) since September 2019.

Whilst the news of this current price recovery and a possible “floor” in the price is welcome, there is still a long way to go before we can assume all is good with the wool market. Many global factors will influence market direction. The geopolitical nature of the Pacific rim is a concern for all countries when trade is mentioned. As Australia has seen recently diplomatic tensions have led to bitter trade tensions between China and Australia that have seen crippling tariffs placed on our wine, barley and beef exports into China. The latest victim looks to be cotton (an $800m export market) with Chinese mills told not to buy Australian cotton with the threat of a 40% tariff being imposed. Cotton millers are given an import quota each year and have been told they may not receive this allowance if they continue to buy our cotton. Worrying times indeed.   

Futures have traded at a good premium to the spot price indicating another good market next week.


                                                   Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1110

Main Buyers (This Week)

1

Endeavour Wool

4,263

2

Australian Merino

3,103

3

Techwool Trading

2,578

4

Fox & Lillie

2,350

5

PJ Morris Wool

1,611

6

Tianyu Wool

1,169

Eastern Market Indicators (AUD cents/kg clean)

1117 cents é 51 cents compared with 13/10/2020

Northern Market Indicators (AUD cents/kg clean)

1184 cents é 56 cents compared with 13/10/2020

   AUD/USD Currency Exchange

0.717 é 0.0004 compared with 13/10/2020

9 October 2020

Friday, October 09, 2020

 WEEKLY MARKET REPORT

Week Ending 9th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S15/20

This Week

M15/20

Last Sale

S14/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1626

1608n 1591 +35 1902 -276

18

1402

1403

1382

+20

1867

-465

19

1195

1181

1160

+35

1788

-593

20

1069

1058

1049

+20

1762

-693
21 1030n 1027 1010n +20 1753n -723
 26 693n - 678n +15 1170n -477

28

484n

483

469n

+15

940n

-456

MC

732n

701n

730n

+2

991n

-259

MOST LOSSES RECOVERED!!

As we forecast last week the EMI rose back through the 1000 cent barrier adding 26 cents to its value to finish this series at 1022. An FRX rate that remained flat throughout the sale had the EMI in US$ terms up by 19 cents to 727. Finer fleece types (< 17.5 and 19s) edged higher by 30 to 40 cents with discounts for overlength, tender, VM and high mid-breaks almost non-existent with these wools selling for levels usually reserved for European types while all other microns added 20 to 25 cents with most growers happy to accept these price rises as just 4% was passed-in.  The skirting catalogue had an identical sale as < 17.5 rose by 30 to 50 cents; 17.5 to 18.5 were quoted 25/40 dearer while broader types across all VM levels added 20 to 30 cents. Again growers were happy to accept these price increases clearing 97%. Cardings had a very solid sale as all types were quoted as sellers’ favour. Crossbreds also staged some sort of comeback with all microns lifting from 15 to 35 cents.

Opinion was divided as to which way the market would go. One of our well informed sources said the market would be solid to dearer but other exporters were tipping firm to buyers’ favour. As the opening day progressed the “fence sitters” had to re-enter the market to avoid buying wool at the dear point of the series. Traders dominated the fleece sector with first stage processors calling the shots for all other types. Chinese demand is still dominant but, as each week goes by, small pockets of enquiry from India and Europe are becoming more evident. Even as greasy prices improve the retail sector is still very cautious to commit to placing new season orders as big volumes of old (or out of season inventory) is sold to the consumer hopefully as at small profit or break-even point but signals from retail on a macro level are on the improve. The elephant in the room is still Covid-19 and the race to find a vaccine is still at the forefront of all Western governments desperate to get the masses back to work to get economies growing again without having to go deeper into debt with more stimulus packages. The more chance consumers have to go shopping and spend money on discretionary goods such as wool the quicker the market has the chance to recover to acceptable levels.

A few more Ram sale results: Parkdale at Dubbo sold 115 rams for a top price of $8,200 to average $1,795; Boxleigh Park at Wellington cleared 95% with a top of $3,750 to average $1,860 for their mix of Poll and Horn rams; also at Wellington Mumblebone averaged $2,920 to clear all but 2 of the 260 rams offered with a top of $14,000; Bundilla at Young sold all but 5 of the 300 rams on offer to average $3,790 ($520 higher than last year) with a top of $11,000 twice and Charinga in Victoria achieved a top of $38,000, an average of $4345 for 141 Poll rams and Horned rams average $2,680.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1030

Main Buyers (This Week)

1

Techwool

3885

2

Lempriere

3505

3

Endeavour

2812

4

United Wool

2213

5

Tianyu Wool

1191

6

Fox & Lillie

1136

Eastern Market Indicators (AUD cents/kg clean)

1022 cents é 40 cents compared with 02/10/2020

Northern Market Indicators (AUD cents/kg clean)

1076 cents é 23 cents compared with 02/10/2020

   AUD/USD Currency Exchange

0.7118 é 0.0002 compared with 02/10/2020

2nd October, 2020

Friday, October 02, 2020

 WEEKLY MARKET REPORT

Week Ending 2nd September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S14/20

This Week

M14/20

Last Sale

S13/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1591

1572n 1611 -20 1872 -281

18

1382

1363

1407

-25

1840

-458

19

1160

1136

1208

-48

1739

-579

20

1049

1025

1104

-55

1699

-650
21 1010n 1003 1075n -65 1684n -674 
 26 678n - 668n +10 1150n -472

28

469n

465

489n

-20

908n

-439

MC

730n

696n

723n

+7

1005

-275

EMI UNDER 1,000 BUT JUST FOR ONE DAY!!

The wool market was unable to sustain its mini recovery this week as prices softened across most sectors. A combination of factors from softer enquiry levels, urgency for prompt shipment abating and the increase in volume by 7,700 bales to 31,000 (the largest catalogue since mid August) was the impetus for buyers to take their foot off the pedal and take a step back from the buying patterns of the past 3 sales. The AWEX EMI retreated by 40 cents to 996 (-4%) and gave up 30 cents in US$ terms to 709 as the FRX softened by a third over the course of the sale to 71 cents to have nil impact on price direction. All fleece types lost 20 to 60 cents, the discounts followed the microns, increasing as the wools got broader. The skirting selection followed the same pattern as their fleece counterparts - just a 20 cent fall for < 17 micron as broader types across all descriptions fell by 40/60 cents. Cardings had a mixed sale as < 17.5 LKS gave up 30/40 cents while the broader types added 10 to 15 cents with merino and XB lambs gaining 20 to 50 cents with STN/CRT fully firm. These movements saw the MCI up by 7 cents to 730. Crossbreds opened the sale on a dearer note (+10 cents) but 28s and coarser lost 30 cents in the final session to finish the sale cheaper. As the sale progressed buying became more widespread across all types. Merino fleece was dominated by traders with all sectors in room 2 (skirtings, cardings and XBs) coming under more pressure from 1st stage manufactures and processors - a good sign of interest being reignited down the processing pipeline. The light at the end of the tunnel is still on the dim side but may become brighter in the run to Christmas. Intertextile Shanghai was held last week with Chinese fabric producers showing off their collections for Autumn/Winter 2021-22 with good levels of enquiry for samples and price requests. This does not lead to a full blown recovery but a bumpy ride with some speculators talking more upside soon as the August slump was an over-reaction, but on the flipside the 3 week rise we saw was over-reaction in the other direction - who’s right or wrong?? Recent HIS market surveys of PMIs (purchasing managers intentions) the US services sector fell from a 17 month record high but manufacturing was up on the previous month. This was a similar scenario in Europe.

AWTA released its September testing figures with a surprising jump of 7.8% more wool tested than September 2019.This could be a result of some growers shearing early to avoid a clash of shearing with (hopefully) the big harvest just around the corner. The cumulative figures for the 1st quarter of the year show an identical fall (7.8%) in wool tested when compared to last season 57.5mkg to 62.4mkg.

Some ram sale results from the past week: Allendale at Wellington had a top price of $4,000 to clear 87% with the average increasing by $85 to $1870; Cassilis Park Cassilis offered a mixture of Polls, Horns and Megas to sell all but 1 ram from 80 offered to average $2,145 with a top price of $6,400; Dunbogan at Elong sold all 56 rams on offer to average $2,245 with a top of $4,000 four times. Langdene at Dunedoo cleared 98% of their draft of Polls and Horned rams to top at $6,500 twice to average $3,230 up by $200 on last year; Bogo at Yass sold all 169 rams with a top of $5,000 to average $2,805; Richmond at Quandialla sold all 110 rams to average $2,275 up by $336 from last year with a top of $10,000. A $15,000 top price was achieved by One Oak Poll at Jerilderie to average $2,435 clearing 95%; also, at Jerilderie, Willandra had a top of $13,000 to average $2,735 to clear 91%. Show floor chatter is for a firm market next week with the EMI to break through 1000 cents again.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

990

Main Buyers (This Week)

1

Techwool

3855

2

Lempriere

2646

3

Endeavour

2570

4

Aust. Merino

1873

5

Fox & Lillie

1721

6

Tianyu

1114

Eastern Market Indicators (AUD cents/kg clean)

996 cents ê 40 cents compared with 25/09/2020

Northern Market Indicators (AUD cents/kg clean)

1053 cents ê 33 cents compared with 25/09/2020

   AUD/USD Currency Exchange

0.7116 é 0.0017 compared with 25/09/2020

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