1 February 2019

WEEKLY MARKET REPORT

Week Ending 1st February, 2019

AWEX Northern Micron Indices Comparison

AWEX INDEX	This Week S31/18	This Week M31/18	Last Sale S30/18	Sydney Change	Last Year Sydney	Sydney Yearly Change
17	2538	2508	2538	0	2705	-167
18	2437	2443	2432	+5	2330	+107
19	2304	2287	2313	-9	2090	+214
20	2273	2251	2277	-4	1901	+372
21	2249	2224	2245n	+4	1789	+460
22	-	2223n	2213n (M)	+10 (M)	1728 (M)	+495 (M)
26	1343n	1333	1298n	+45	1039n	+304
28	1024n	1031	934n	+90	718	+306
30	839n	848	741 (M)	+107 (M)	542	+297
MC	1165	1123n	1186	-21	1300n	-135

HAPPY CHINESE NEW YEAR … HOPEFULLY!

The wool market plodded along this week with mixed results in all 3 centres as national weekly offerings are now averaging 40,000 bales following on from the 2 big opening sales of the new year. The AWEX EMI pushed ahead by 7 cents to 1934 with most microns moving by single figures either way in Sydney. In US$ terms the EMI added 33 cents to 1405, this due the rising A$ as the sale progressed, up by 1.5 cents (2.2%) for the week. With the volume of drought affected wool increasing each sale only the long, low VM higher yielding types are immune from any major price discount. Buyers are finding it harder to place the burrier, tender, short and sub 60% yielding fleece types and are adjusting prices accordingly as only the best types attract solid premiums.

Skirtings also improved by modest margins - 10 to 20 cents for most types bar the very high VM lots. Again LKS weighed heavily on the carding sector as < 17 micron types were reduced by 30/50 cents with STN giving up 20 to 30 cents. The best performing of all sectors were the XBs. After an excellent opening 2 sales they were in hot demand again as finer than 26 micron added up to 50 cents while 28/30s climbed by 100 cents as some exporters are blending these with fine wools - the reason for the renewed interest as 28 micron is at a 5 year peak.

The 2 fundamentals that remain in place (supply and demand) will dictate above all which way the market goes but we do face some headwinds. The market looks to be coping with the FRX fluctuations as this sale demonstrated although new forward business is hard to come by at current market levels given the quality of wool on offer as processors try to balance the need to keep machinery running and the inability to pass the current price levels to downstream customers. Some overseas manufacturers are looking to other sources to continue processing but the move to blending XBs with merino rather than a shift to blend synthetics is working thus far. The ongoing US/China trade war, the messy Brexit in Europe and the slowing Chinese economy could all play their part at some stage on wool prices. AWTA reports that 12% less wool was tested in January 2019 compared to the same month last year and wool sold year to year is 19% (201,000) lower than last season to date. As we approach Chinese New Year, most pundits forecast good types to hold while off style wools could struggle.

Ag Concepts Fwd Prices as at 1 February 2019

Micron	Date	Low	High
21	17-Apr-19	2190	2190
21	9-Oct-19	2060	2060

Main Buyers (This Week)

1

Techwool

4599

2

Seatech Ind.

3449

3

Fox & Lillie

3409

4
Aust. Merino
3008

5

Endeavour Wool

2678

6

Kathaytex

2467

Eastern Market Indicators (AUD cents/kg clean)

1934 cents é 7 cents compared with 25/01/2019

Northern Market Indicators (AUD cents/kg clean)

1978 cents é 8 cents compared with 25/01/2019

AUD/USD Currency Exchange

0.7267 é 0.0144 compared with 25/01/2019

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Weekly Market Reports

1 February 2019

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