Weekly Market Reports


24 January 2020

Friday, January 24, 2020

 WEEKLY MARKET REPORT 

Week Ending 24th January, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S30/19

This Week

M3019

Last Sale

S29/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2082

2073

2122

-40

2538

-456

18

1917

1922

2005

-88

2432

-515

19

1809

1803

1909

-100

2313

-504

20

1778

1776

1878

-100

2277

-499

21 1766 1758 1870n -104 2245n -479
26 1111n 1116 1195n -84 1298n -187

28

838n

835

914n

-76

934n

-96

30

-

690n

711 (M)

-21 (M)

741 (M)

-51 (M)

MC

1145n

1131n

1123n

+22

1186

-41

HIGHER VOLUME STRETCHES MARKET

The market opening felt the pain of the increased volume of bales in the Australian wool market this week. After last Tuesday’s increases between 100 and 120 cents, this week’s offering jumped from earlier predictions of 49350 bales to 59900 bales. With this came discounts from the start as buyers struggled to find the finance for sudden increased volumes of wool.  A three day sale in Melbourne saw them open up, selling on their own, on Tuesday. The softer tone was evident when selling began in the merino sector. The individual Micron Price Guides (MPGs) for 17.0 micron and coarser falling by 14 to 40 cents by day’s end.

As Sydney did not sell last Thursday or Tuesday this week, everything was pointing in one direction for when our market opened Wednesday. Fremantle was in the same boat and both centres were pulled back to match Melbourne’s levels. Freemantle dropped between 9 and 31 cents, not as great a drop as Sydney due to Freemantle selling last Thursday and taking some of the losses then. Sydney, however, dropped between 37 and 110 cents of which 19 micron and broader took the biggest brunt of the losses losing between 98 and 110 cents respectively. These drops, compared to the previous Tuesday’s sale, meant that a lot of wool was pulled out of the market ending in a week where the offering ended up being 52,666 bales of which 15.9% was passed in, continuing at historically higher than normal rates. Thursday seemed to find a consolidated level across all three centres as buyers seemed to be happy with securing as much wool at these levels as they could. By the end of Thursday’s selling period the market seemed to be a bit more positive. All wool types were very firm to 10c dearer with most attention drawn back to the merino fleece sector of 19 micron and broader.

The AWEX Eastern Market Indicator (EMI) lost 33c or 2% this week to move to 1576c clean/kg. The EMI in US Dollars (USD) was lower again as the 0.6% lower exchange rate helped depreciate that indicator by 2.6%. The USD EMI adjusted down to a 1082c US clean/kg close for the week which was a 29 USC loss. Even with these drops the EMI is still 18c clean/kg ahead of the last sale before Christmas - still very good levels. Merino Skirtings had strong support all week ending the week fully firm to 20 cents dearer across all microns. The oddment sector defied the trend of all other sectors. Locks in particular were well sort after pushing prices up by 30 to 40 cents. The crossbred sector took a fair hit this week as well as they seemed to be out of favour with the buyers all together losing between 21 and 84 cents.

Next week sees another 40680 bales go under the hammer. As Monday is a public holiday there will only be two selling days, Wednesday and Thursday. Also China will celebrate their lunar New Year and will pretty much be shut for the week so it will be very interesting to see how our Australian Wool Market performs. Fingers crossed, firm to dearer!

HAPPY AUSTRALIA DAY and safe travels to anyone travelling!

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1760

Main Buyers (This Week)

1

Techwool

7358

2

Endeavour Wool

4157

3

Aust. Merino

3324

4

Tianyu Wool

3046

5

Modiano Aust

3026

6

PJ Morris Wool

2619


Eastern Market Indicators (AUD cents/kg clean)

1576 cents ê 33 cents compared with 17/01/2020


Northern Market Indicators (AUD cents/kg clean)

1617 cents ê 61 cents compared with 17/01/2020

   

AUD/USD Currency Exchange

0.6863 ê 0.0044  compared with 17/01/2020

17 January 2020

Friday, January 17, 2020

 WEEKLY MARKET REPORT 

Week Ending 17th January, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S29/19

This Week

M2919

Last Sale

S25/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2122

2082

2005

+117

2523

-401

18

2005

1930

1907

+98

2407

-402

19

1909

1838

1818

+91

2304

-395

20

1878

1803

1792

+86

2256

-378

21 1870 1783 1783n +87 2225 -355
26 1195n 1166 1180n +15 1339 -144

28

914n

865

914n

0

941n

-27

30

-

711

729 (M)

-18 (M)

719 (M)

-8 (M)

MC

1123n

1089n

1071n

+52

1202

-79

NEW YEAR BUT SAME RESULT!

As has been the case for a number of years now the market started the new year with a bang. After last week’s 5% rise in the South African market talk on the showfloor was of a similar scenario. The chatter was spot on as all merino microns added 100 to 120 cents on Tuesday on the Eastern Seaboard. On Wednesday, as Fremantle came on line, Sydney was a fraction cheaper (10 cents) Melbourne mixed and after an explosive start Fremantle could only add 30/40 cents to their pre-Christmas values as talk of a correction was common. The big downward price adjustment came on Thursday with Sydney not selling with the other 2 centres as all microns lost 25 to 100 cents. After the wild fluctuations the AWEX EMI did post a 51 cent rise to 1609.

Skirtings also benefitted from the initial jump in the market to have this sector 70/90 cents to the good with cardings ranging from 40 to 70 cents higher. The crossbred sector couldn’t go with their merino counterparts and added just 10 cents to their values. With the market’s jump the EMI is equal to its spring peak in late September (1609) and just the 2nd occasion since August that 1600 cents has been achieved. Even though the market rose there are big price discrepancies between the 3 centres. As Sydney escaped the big closing falls on Thursday we are well ahead of Melbourne’s levels (78 cents on 18s and 19 to 21s, 40 cents for 16.5 to 17.5 and 18.5s.) This could signal more price reductions next sale as growers rushed wool into next week after Tuesdays jump to try and capture the rises pushing the roster to 59,900 bales, a 14% (8,100 bales) increase since Monday. It will be the largest sale since April 2018. This opening sale (52,200 bales) was the largest since the corresponding sale last year. Buyers are somewhat perplexed as to why growers continue to rush wool onto the market after big rises pushing volumes to levels where finances aren’t enough to buy all the wool on offer at competitive levels. If the rises weren’t so large, like before Christmas and late October, we could avoid the situation of big rises leading to large offerings, then buyers virtually running out of money to buy all the available wool and the market losing all the previous gains. Buyers seem to think that volumes over 45,000/sale becomes a bridge too far. That doesn’t augur well for next week and then Chinese New Year the following sale. Some exporters did write some business last night - enough to steady the market next week is anyone’s guess.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1760

Main Buyers (This Week)

1

Techwool

8058

2

Tianyu Wool

3433

3

Aust. Merino

3410

4

Kathaytex

2839

5

Fox & Lillie

2783

6

Michell Wool

2498


Eastern Market Indicators (AUD cents/kg clean)

1609 cents é 51 cents compared with 20/12/2019


Northern Market Indicators (AUD cents/kg clean)

1678 cents é 79 cents compared with 20/12/2019

   

AUD/USD Currency Exchange

0.6907 é 0.0062  compared with 20/12/2019

20 December 2019

Friday, December 20, 2019

WEEKLY MARKET REPORT 

Week Ending 20th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S25/19

This Week

M25/19

Last Sale

S24/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2005

1989

1925

+80

2532

-527

18

1907

1863

1815

+92

2402

-495

19

1818

1789

1723

+95

2247

-429

20

1792

1771

1708

+84

2178

-386

21 1783n 1769 1705n +78 2145 -362
26 1180n 1164 1120n +60 1205n -25

28

914n

913

840n

+74

855n

+59

30

-

729

671 (M)

+58 (M)

693 (M)

+36 (M)

MC

1071n

1051n

1040n

+31

1146

-75

CONFIDENCE IS KING!!

Last sale’s upward shift in the market accelerated this week - the final sale before the 3 week recess. The AWEX EMI rose by 55 cents to 1558 and 32 cents in $US terms to 1066 despite the FRX staying well above 68 cents. Buyers were keen from the get-go with large increases in the opening session followed by a more measured approach on the final day but still good gains. All fleece microns posted gains of 75 to 95 cents regardless of style or any faults. Skirting’s were also in good demand as buyers pushed all types in this sector 60 to 90 cents higher. Crossbreds were also keenly sought after as most microns added 60/70 cents. The only sector to not explode in prices was cardings. Sydney and Fremantle averaged 20 cent rises while Melbourne lost 7 cents to have the 3 centres’ average price at 1070.

Despite the anticipated large offering (39,400), the high FRX and shipping logistics delays, the market had its largest weekly increase for 12 sales. The final volume offered was 12% lower than originally rostered due to a high withdrawal rate and with no chance to buy any meaningful quantity till mid January buyers were under pressure to fulfil outstanding commitments from the reduced selection on offer.

This year, particularly the final 6 months, has been one of the toughest periods for all in the industry. Firstly growers are still combatting the worst drought for over 100 years, massive reductions in sheep numbers, poor quality wool and a drop in the market of 17% (1862) from 12 months ago to 1558. The peak of the market was in mid February at 2027 and the low point was early September when the EMI got down to 1365, a 33% swing. At the high point in February just 252 cents separated 17 from 21 micron (2620 to 2368). At the cheapest point of the year the spread wasn’t much wider, 17s at 1842 and 21s were 1487 - a 355 cent difference. Exporters have had a year to forget as well. The high prices from last year into 2019 proved unsustainable as global events that we have spoken about in several reports conspired against them as consumer demand weakened. The market’s demise started in May and peaked in August, falling 163 cents in a single week only to stage a remarkable recovery in S11 climbing by 170 cents. Buyers, understandably, couldn’t trade with any confidence with such wild swings and are still feeling the effects now. The British election outcome and the softening of trade tariffs have boosted confidence that will hopefully carry on into the new year.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1690

Main Buyers (This Week)

1

Techwool

4996

2

Fox & Lillie

4068

3

Endeavour Wool

3581

4

Aust. Merino

3430

5

Tianyu Wool

2881

6

PJ Morris

2077


Eastern Market Indicators (AUD cents/kg clean)

1558 cents é 55 cents compared with 13/12/2019


Northern Market Indicators (AUD cents/kg clean)

1599 cents é 72 cents compared with 13/12/2019

   

AUD/USD Currency Exchange

0.6845 ê 0.0040  compared with 13/12/2019

13 December 2019

Friday, December 13, 2019

 WEEKLY MARKET REPORT 

Week Ending 13th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S24/19

This Week

M24/19

Last Sale

S23/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1925

1950

1908

+17

2532

-607

18

1815

1815

1808

+7

2402

-587

19

1723

1727

1706

+17

2247

-524

20

1708

1711

1683

+25

2178

-470

21 1705n 1709 1681n +24 2145 -360
26 1120n 1149 1135n -15 1205n -85

28

840n

854

833n

+7

855n

-15

30

-

671

648 (M)

+23 (M)

693 (M)

-22 (M)

MC

1040n

1058n

1061n

-21

1146

-106

MARKET BACK OVER 1500!!

After 7 straight days of falls adding up to almost 100 cents, the market had an unexpected turnaround as the AWEX EMI posted an 11 cent gain to 1503. Several factors were pointing to further losses for the market: the large offering, adverse FRX rates, the ongoing poor quality and global economic concerns almost certain to lead to a cheaper market. High rates of withdrawn wool (12%, 6000 bales) saw a much more manageable quantity for buyers to handle and some hidden prompt that appeared was all the impetuous the market needed to strengthen.

Despite the small upward adjustment this series was one of the most impressive sales of the season insofar as the big players of each segment dominated, local based traders to China led the merino sector, the biggest top-maker in the world was atop the crossbred sector and the largest global carbo processor was No.1 for cardings and oddments. Most fleece microns added 10 to 25 cents to their values. Skirtings had a mixed sale as the opening sessions’ gains were given up on the last day to leave them just in sellers’ favour for the week. Cardings averaged 19 cent losses across the 3 centres as all types fell by 10 to 30 cents. Crossbreds also had mixed results as < 26 microns were 15 cents lower while broader types added 10/20 cents.

The steadying market was welcome news after 3 weeks of falls and no talk that the market was about to stop its downward trend. Even after the high percentage of withdrawals buyers were faced with the largest catalogue since May but the end result was pleasing to all participants. The national turnover for wool sold passed the $1billion mark this week but it took 7 more sales to reach this milestone than it did last season - a result of the falling market and less wool offered (80,650 bales 10%). In what will be good news for the global economy (and the wool market) the US has agreed to halve tariff rates on $350bn worth of Chinese goods, some of which were as high as 25% and, in return, China would boost purchases of US farm products. This latest agreement should avoid US threats to impose tariffs on more than $150bn worth of Chinese exports that were due to start next week. Stock market reaction was swift as Asian markets rose 2% and Wall Street again set new records. Confidence is a great thing!! The market should end the year on a solid to dearer note for the final sale of the year.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

January 20

1670

Main Buyers (This Week)

1

Techwool

5954

2

Fox & Lillie

4166

3

Endeavour Wool

4068

4

Tianyu Wool

3195

5

Aust. Merino

2922

6

PJ Morris

2323


Eastern Market Indicators (AUD cents/kg clean)

1503 cents é 11 cents compared with 06/12/2019


Northern Market Indicators (AUD cents/kg clean)

1527 cents é 3 cents compared with 06/12/2019

   

AUD/USD Currency Exchange

0.6885 é 0.0046  compared with 06/12/2019

6 December 2019

Friday, December 06, 2019

WEEKLY MARKET REPORT 

Week Ending 6th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S23/19

This Week

M23/19

Last Sale

S22/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1908

1914

1980

-72

2513

-605

18

1808

1798

1863

-55

2379

-571

19

1706

1712

1744

-38

2218

-512

20

1683

1674

1713

-30

2147

-464

21 1681n 1671 1716n -35 2129 -448
26 1135n 1133n 1168n -33 1205 -70

28

833n

835

855n

-22

855

-22

30

-

648n

694 (M)

-46 (M)

683 (M)

-35 (M)

MC

1061n

1077n

1054

+7

1183

-122

MARKET FALLS UNDER 1500 cents!!

Another tough week for the wool market as the downward trend continued on for the 3rd sale in a row. Steady falls all week saw the AWEX EMI peel off by 38 cents to fall below the 1500 cent mark to 1492 - its lowest point in 13 weeks, 357 cents lower than this sale last year. In US$ terms the loss was only 15 cents to 1020 somewhat cushioned by the strengthening FRX to 68.5 cents. This ascendency, along with the subdued demand, contributes to the falling market. Losses were most severe in the finer microns, < 18.5 giving up 50 to 70 cents while 19s and broader fell by 30/40 cents with the better style, good spec types less affected while the dustier/tender lots saw the discounts widen on these. Skirtings also took a hammering with all types falling by 50 to 80 cents. The only highlight was the Carding sector which added 7 cents to 1061 while crossbreds lost 20 to 30 cents.

A wane in demand, the logistical headache of shipping wool over the Christmas/New Year period, the timing of the Chinese New Year (25th January) and a sudden spike in offerings for the last 2 sales of the year are all conspiring to send the market on a downward spiral - 100 cents fall over the past 6 weeks. The large offerings and inability of buyers to deliver wool on time is severely hampering normal buying and shipping activities. This week was, in effect, the final opportunity to ship wool to China for arrival before their New Year shutdown so the large offering at this time is bad timing for exporters and mills. This means a 2 to 4 week additional financing period that is required for exporters for any wool destined for China that is bought over the next 2 sales if delivery is not “prompt”, one week for shipment delay due to Christmas and up to 2 weeks for the Chinese New Year shutdown. The margins are tight at the best of times let alone this situation when hand to mouth modus operandi that all the trade use.

AWTA released their November figures which saw a 1% fall when compared to the same month last year with the progressive total for the year running at 8.5% less wool tested than last season (127.5mkg to 139.4mkg) and 77,175 (10.5%) less bales offered than last season. Next week’s sale (48,500) could be the largest since end of April growing by 9,000 bales (23%) since last Friday, Melbourne’s catalogue ballooning by a massive 27%.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

January 20

1680

Main Buyers (This Week)

1

Techwool

4100

2

Aust. Merino

3065

3

Fox & Lillie

2926

4

Endeavour Wool

2600

5

PJ Morris

1872

6

Tianyu Wool

1117


Eastern Market Indicators (AUD cents/kg clean)

1492 cents ê 38 cents compared with 29/11/2019


Northern Market Indicators (AUD cents/kg clean)

1524 cents ê 37 cents compared with 29/11/2019

   

AUD/USD Currency Exchange

0.6839 é 0.0074  compared with 29/11/2019

29 November 2019

Friday, November 29, 2019

WEEKLY MARKET REPORT 

Week Ending 29th November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S22/19

This Week

M22/19

Last Sale

S21/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1980

1968

2008

-28

2487

-507

18

1863

1849

1885

-22

2372

-519

19

1744

1743

1781

-37

2188

-444

20

1713

1700

1738

-25

2141

-428

21 1716n 1700 1729n -13 2129 -413
26 1168n 1161 1200n -32 1335n -167

28

855n

845

899n

-44

946 (M)

-101 (M)

30

-

694

704 (M)

-10 (M)

753 (M)

-59 (M)

MC

1054

1079n

1052n

+2

1199

-146

MARKET STALLS!!

The recent pattern of price movement was broken this sale as the “up and down” direction over the past 6 to 8 weeks shifted to a falling trend now into its 5th selling day (a 50 cent reduction). Last week’s Thursday firming market in Fremantle gave a false hope that the market would tract upwards but that wasn’t to be. Steady falls over both days saw the AWEX EMI fall by 25 cents to 1530, a similar margin (22 cents) in US$ terms to 1035 despite the FRX falling by 0.30 of a dollar to 67.65 cents - a worrying sign when the market falls and the FRX goes in our favour.

All fleece types fell as all microns gave up 15 to 35 cents with the poorer style types (MF6/7) neglected even more by 50 to 80 cents. Only the very best style (MF3 and better) and NM lots were immune from the discounts. After a few sales of maintaining levels skirtings suffered losses of 30 to 50 cents except < 2.5%VM which halved those falls. All types in the Carding sector were fully firm to sellers’ favour and XBs recorded losses on both days to finish 30 to 45 cents off the pace.

Signs of weaker demand are coming to bear at the present time which is critical for the Autumn/Winter retail season in the Northern Hemisphere. Current price trends and the level of consumer confidence are reflecting the uncertain economic conditions in many countries. Many EU economies have weakened over the past 12 months as consumer confidence wanes there as well in Japan which is at its lowest level for 7 years and worst since 2017 in South Korea. On the flip-side US consumers remain upbeat with low unemployment, a strong economy and wages increasing and stronger consumer confidence in China - a welcome turnaround from low economic growth and the trade war impact with the USA.

More news from the AWI AGM: The main item was the ousting of one-time Chairman and long term director Wally Merriman. The board also announced a further reduction in expenditure and draw down of a further $7.5 million from its reserves due to the less than anticipated levy revenue as a result of less wool being sold, lower prices and the levy % down to 1.5% from 2% which started July this year. The board has also commissioned a review of WoolQ (the platform that has cost several $million). Over 41,000 bales are on offer next week giving the buyers too much of a chance to take a “pick and choose” approach to the market.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

December 19

1700

Main Buyers (This Week)

1

Techwool

3975

2

Aust. Merino

3353

3

Fox & Lillie

3013

4

Endeavour Wool

2238

5

Tianyu Wool

2186

6

United Wool

1816


Eastern Market Indicators (AUD cents/kg clean)

1530 cents ê 25 cents compared with 22/11/2019


Northern Market Indicators (AUD cents/kg clean)

1561 cents ê 30 cents compared with 22/11/2019

   

AUD/USD Currency Exchange

0.6765 ê 0.0030  compared with 22/11/2019

22 November 2019

Friday, November 22, 2019

WEEKLY MARKET REPORT 

Week Ending 22nd November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S21/19

This Week

M21/19

Last Sale

S20/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2008

1963

2027

-19

2472

-464

18

1885

1883

1920

-35

2343

-458

19

1781

1788

1818

-37

2204

-423

20

1738

1734

1773

-35

2172

-434

21 1729n 1723 1763n -34 2158 -429
26 1200n 1196n 1204n -4 1245n -45

28

899n

884

910n

-11

845n

+54

30

-

704

724 (M)

-20 (M)

734 (M)

-30 (M)

MC

1052n

1079n

1053n

-1

1180

-128

SAME OLD, SAME OLD ……

The recent pattern of “up and down” for the wool market continued on this series as the AWEX EMI slipped by 19 cents to 1555 - the exact amount of the previous week’s gains. In $US terms the downward shift was a similar figure, a 13 cent loss to 1057 as the FRX moved above 68 cents on Wednesday only to fall back below that level today. Last Thursday’s falling market was the precursor to this sale as falls across the 3 centres on Wednesday were followed by a more positive tone in the final session. All fleece microns suffered, falling by 20 to 40 cents with only the very odd best type or NM lot attracting any sort of premium up to 60 cents. Skirtings again looked to be far less affected by the ebb and flow of demand of their fleece counterparts and sold to sellers’ favour. Cardings also had an uneventful sale with some types in buyers’ favour to have the MCI shed just 1 cent. Crossbreds followed last sales pattern shaving up to 10 cents from their values.

The current price movement of the market continues on. The practice of exporters writing some new business and  buying wool and pushing up prices by 50 to 80 cents then being in the situation of the market going “too high too fast” has them immediately on the back foot and prices retract just as quickly as they were pushed up. The price fluctuation over the past month or so has been around 40 cents (1550 to 1590) as the EMI has been unable to break through the 1600 cent mark. When it does and if that level can be maintained is anyone’s guess.

The Australian Wool Production Forecasting Committee met this week and downgraded its shorn wool production for this season to 272mkg a 9.2% decline from 2018/19, the lowest since 1923/24. The 2 main reasons for this decline are higher slaughter rates (resulting in record prices for lamb and mutton) due to increased demand for red meat caused by the global outbreak of African Swine Flu which has resulted in 25% of the world’s pig population eradicated; and the persistent drought lowering numbers to 67 million, a 7.5% fall from 2018/19.

AWI held their AGM this morning and voting was conducted for the 3 vacant spots on the board. Of the eight candidates up for election, 2 new directors were voted in (Michelle Humphries and Noel Henderson) with incumbent director, David Webster, holding his position. One time Chairman, Wally Merriman, failed in his bid to be re-elected and Haddon Rig principal, George Falkiner, also was unsuccessful in his bid for a spot on the board. Fremantle’s firming market on Thursday bodes well for next week’s sale but how much will it rise??

Southern Aurora Fwd Prices              

Micron

Date

Low

21

December 19

1720

Main Buyers (This Week)

1

Techwool

5147

2

Endeavour Wool

2845

3

Aust. Merino

2679

4

Fox & Lillie

2623

5

Kathaytex Aust.

1830

6

PJ Morris Wool

1373


Eastern Market Indicators (AUD cents/kg clean)

155 cents ê 19 cents compared with 15/11/2019


Northern Market Indicators (AUD cents/kg clean)

1591 cents ê 19 cents compared with 15/11/2019

   

AUD/USD Currency Exchange

0.6795 ê 0.0003  compared with 15/11/2019

15 November 2019

Friday, November 15, 2019

 WEEKLY MARKET REPORT 

Week Ending 15th November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S20/19

This Week

M20/19

Last Sale

S19/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2027

1984

1978

+49

2445

-418

18

1920

1894

1875

+45

2278

-358

19

1818

1811

1776

+42

2104

-286

20

1773

1763

1725

+48

2057

-216

21 1763n 1738 1713n +50 2048 -285
26 1204n 1215 1204n 0 1140n +64

28

910n

918

919n

-9

760

+150

30

-

724

728n (M)

-4 (M)

684 (M)

+40 (M)

MC

1053n

1062n

1055n

-2

1100

-47

JUST LIKE A BROKEN RECORD!!

The wool market continues to do the same thing, up and down, this time over the very short period of this week’s sale as the sale started with a bang and lost ground on the final day. Since September the pattern has been 2 or 3 days of gains followed by losses over the same period of time. Again it was a case of “rising too high too quickly” as most fleece types ascended by 45 to 65 cents only to lose up to 20 cents in the last session. By week’s end the AWEX EMI had lifted by 19 cents to 1574 with just a 2 cent rise in US$ terms to 1070 as the A$ lost ground to all major currencies to fall below 68 cents with all microns adding 35 to 50 cents across the merino fleece spectrum. Skirtings fared better than their fleece counterparts as the opening day’s lifts were maintained to see a 30/40 cent gain for all types with the < 17.5, low VM lots 40 to 60 cents to the good. Cardings recorded very little change as LKS were in buyers’ favour to have the MCI give up 2 cents to 1053. Crossbreds also had a flat sale as > 27 micron fell by 10 cents with all other types firm.

The market is like a broken record doing the same thing week after week but the volatility of price shifts has narrowed. In August/September the shift was 100 cents or more but the past 6 sales has seen the EMI move either way 25 to 40 cents bar one rise over 2 weeks that added 75 cents, this narrowing price adjustment much more palatable for buyers.

Volatility remains the bugbear of all in the processing pipeline. Exporters’ margins are savaged by the magnitude of the daily price shifts leading to a conservative “just in time” approach if they can’t cover their forward risk. This, in turn, reduces efficiency in the pipeline and disrupts a smooth flow of product which can constrict consumer demand.

Australian buying houses led the way followed by Chinese indent buyers and selected top-makers but, as the opening day’s levels rose beyond downstream users’ comfort zone, the inevitable pull back in price saw support drift on the final day seemingly now making the 2/3 weekly changes closer to erratic daily swings of price.

The AWI AGM will be held next Friday. Voting closes for the 3 spots on the board next Wednesday at 10am. Postal votes should be in today’s mail with online voting open up until 10am, Wednesday. The AGM will be webcast, go to www.wool.com/about-awi/how-we-consult/annual-reporting/ to watch. The scheduled 40,000 bales rostered for next week and the softer market on Thursday might put prices under pressure to hold their levels.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

December 19

1740

Main Buyers (This Week)

1

Techwool

5068

2

Fox & Lillie

3970

3

Endeavour Wool

2980

4

PJ Morris

2632

5

Aust. Merino

2484

6

Tianyu Wool

2111


Eastern Market Indicators (AUD cents/kg clean)

1574 cents é 19 cents compared with 08/11/2019


Northern Market Indicators (AUD cents/kg clean)

1610 cents é 27 cents compared with 08/11/2019

   

AUD/USD Currency Exchange

0.6798 ê 0.0067  compared with 08/11/2019

8 November 2019

Friday, November 08, 2019

WEEKLY MARKET REPORT 

Week Ending 8th November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S19/19

This Week

M19/19

Last Sale

S18/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1978

1967

1992

-14

2495

-517

18

1875

1858

1928

-53

2318

-443

19

1776

1788

1848

-72

2109

-333

20

1725

1728

1800

-75

2050

-325

21 1713n 1726 1782 (M) -56 (M) 2043 -330
26 1204n 1205 1233n -29 1143n +61

28

919n

910

959n

-40

745n

+174

30

693n

728n

733n

-40

636n

+57

MC

1055n

1064n

1086n

-31

1020

+35

THE SAME PATTERN CONTINUES!

The market kept going on its rollercoaster ride this sale as predictions of a cheaper market after the opening day last week rang true as the quick price ascent was never going to be maintained. The previous 3 sales before last week’s big rise had seen the market average a 29 cent shift either way which, to all participants in the trade (most importantly processors), was quite acceptable and business was done without too much angst for grower or processor. Last sale’s rapid rise and the FRX upward shift put paid to this week’s market from the opening lot as the cheaper market in Fremantle last Thursday was a precursor.

The saving grace for sub 18.5 micron was based purely on the superior style types on offer for this week`s designated superfine sale with only the very odd lot attracting solid premiums with most falling by up to 50 cents. 19 micron and broader took the brunt of the losses, most microns giving back 70 to 80 cents more than last week’s gains. Skirtings weren’t as adversely affected as low VM types lost 10/15 while poorer, burrier lots fell by 20/30 cents. After last week’s massive lifts cardings losses were minimal, all types in this sector retracting by 10 to 20 cents bar carbo LKS, back by 30\50 cents. Crossbreds also came under demand pressure to contract by 30 to 60 cents - not quite all of last sale’s gains.

So the rollercoaster continues. The market cannot seem to crack the 1600 cent barrier – has reached 1594 cents last sale and back to 1555 this sale, a loss of 39 cents. The AWEX EMI has been stuck in the 1500 cent range for some time now and buyers are unable to let it go to 1600 and beyond. Is this level comfortable for processors? At the moment it does look as though1600 cents is the upper limit they can operate at and sell to downstream users where everyone is making money. The erratic rises and falls hurt all pipeline participants as we have seen since August. Up or down the staircase is far better for all to operate in rather than the elevator speed that the market has been on in some weeks since sales resumed in August.

As has been the case for some time Fremantle’s Thursday market dictates what will happen next week and the solid market yesterday (up by 10 cents) gives hope that the market should be solid to sellers’ favour next week if recent history is any sort of guide. Just a reminder that all who are eligible to vote in the AWI elections must send their postal voting papers by next Friday to arrive by the cutoff date. If voting via email votes must be submitted by Wednesday 20th November. Directors urge everyone to vote.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

November 19

170

Main Buyers (This Week)

1

Techwool

4304

2

Endeavour Wool

2462

3

Tianyu Wool

2412

4

Aust. Merino

2231

5

Fox & Lillie

2216

6

PJ Morris

1729

Eastern Market Indicators (AUD cents/kg clean)

1555 cents ê 39 cents compared with 01/11/2019

Northern Market Indicators (AUD cents/kg clean)

1583 cents ê 43 cents compared with 01/11/2019

   AUD/USD Currency Exchange

0.6865 ê 0.0063  compared with 01/11/2019

1 November 2019

Friday, November 01, 2019

WEEKLY MARKET REPORT 

Week Ending 1st November, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S18/19

This Week

M18/19

Last Sale

S17/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1992

1971

1922

+70

2555

-563

18

1928

1912

1865

+63

2377

-449

19

1848

1844

1789

+59

2238

-390

20

1800

1784

1748

+52

2153

-353

21 - 1782 1743n (M) +39 (M) 2126 (M) -344 (M)
26 1233n 1238 1160n +73 1189n +44

28

959n

959

889n

+70

778

+181

30

733n

755

675n

+58

661n

+72

MC

1086n

1076n

987n

+99

1045

+41


NUMBERS LOOK GOOD BUT VOLATILITY TO CONTINUE!!

The promise of a dearer market late last week was spot on as buyers chased wool from the opening lot. Sydney’s market had to play catch-up after its 1 day sale last week but all centres rose more than expected as all fleece microns gained 50 to 75 cents on the opening day then leveled out on the final day. Skirtings had an excellent sale as broader types jumped 40/50 cents while < 18 micron climbed by 70 to 90 cents. XBs also benefitted from the increase in demand up by 60 to 80 cents while the MCI added 100 cents as all types in this sector skyrocketed by 80 to 110 cents.

While any rise in any commodity is welcome, price volatility is always a concern as the past 12 weeks has demonstrated. This sale’s rise was widely tipped but after the opening day’s rises most talk was “gains went too high too fast” and  the shift in the FRX to well above 69 cents was too much as Fremantle’s market pulled back by 20 cents on Thursday - a certain sign of things to come here next week. The sudden upward shift in the A$ came after the first phase of a trade pact with China and the US could be signed ahead of schedule and the US Federal Bank dropped interest rates to 1.5% which resulted in the US stock market setting a new record high. The widely volatile market has auctions highly reactionary to immediate demand (both positive and negative) as buyers don’t want a heavily exposed open position and execute purchasing promptly without price limitations. The +/- 20 cent movements over the previous month has had both sides of the trade (buyers & sellers) confident in what they were doing but the big shift in prices makes trading difficult.

The end of the month saw the release of testing figures from AWTA. October saw a 4.2% fall compared to last October and the progressive total from July to now is 11% less than the same period last year. The volume of wool offered for the current season is 16% (89,400) less than last season - these figures certainly not to improve any time soon. AWI AGM will be held in 3 weeks and voting is under way for the 3 vacant positions on the board from a field of 8 candidates. All shareholders eligible to vote should have received their voting papers by now (electronically or by mail) and are urged to vote from now. If you cannot attend the AGM you will need to appoint a proxy for the meeting. Don Macdonald will be happy to again carry your proxy in what will be a very important election of 3 new board members. As we mentioned earlier we could see a cheaper market next week.

            Southern Aurora Fwd Prices

Micron

Date

Low

21

November '19

1760

Main Buyers (This Week)

1

Techwool

5737

2

Fox & Lillie

4214

3

Endeavour Wool

3160

4

PJ Morris

2489

5

Aust. Merino

2245

6

Tianyu Wool

1844

Eastern Market Indicators (AUD cents/kg clean)

1594 cents é 49 cents compared with 25/10/2019

Northern Market Indicators (AUD cents/kg clean)

1626 cents é 66 cents compared with 25/10/2019

   AUD/USD Currency Exchange

0.6928 é 0.0080 compared with 25/10/2019