Weekly Market Reports


14 August 2015

admin Macwool - Friday, August 14, 2015

WEEKLY MARKET REPORT

Week Ending 14th August, 2015

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S07/15

This Week

M07/15

Last Sale

S06/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1554n

1525n

1497

+57

1249

+305

18

1537

1520

1472

+65

1205

+332

19

1466

1480

1403

+63

1159

+307

20

1420

1429

1368

+52

1115

+305

21

1411

1420

1359

+52

1116

+295

22

1394

1405n

1336

+58

1116

+312

26

1085n

-

1059

+26

788n

+297

28

927

930

912

+15

646

+281

30

868

858n

855

+13

633

+235

MC

1067

1075

1041

+26

787

+280

MARKET SURGES AGAIN!

The wool market mirrored last sale’s advances and then some, a 46 cent lift for the EMI, (37 cents last sale) breaking the 1300 cent barrier. In US terms the rise equated to a 42 cent jump, now 964 cents. The daily gains were a reversal of last sale as this week’s opening day saw the market charge ahead followed by a more sedate sale on Thursday. The 83 cent rise over the past fortnight has seen over half  of the 152 cent losses we had in late June/early July regained as Thursday was the 9th day the EMI has climbed above 1300 cents since the market’s post Easter rise.

The market exploded out of the blocks on Wednesday and caught all by surprise as the showfloor talk was 10/20 cent rises. Thursday saw the market settle and some indicators in Melbourne were flat to buyers’ favour. Despite this all microns posted 50 to 70 cent gains with 19s and 23s in the south better by 80+ cents with 21s in Melbourne up by 80 cents on Wednesday (its largest daily rise in 13 years) before softening on Thursday. As usual discounts shrunk to the bare minimum with plenty of lots selling up to 20 cents above the indicators as middle microns, up to 3% VM with mid to high 60s yield, making over 900 cents.

Skirtings didn’t miss out on the price rise as fine types under 18 micron with <5% VM added 35 to 40 cents to their previous values as 19s and broader were quoted 20 cents better. We had “BKN” with 1.5% VM from Bourke making 774 to 851 cents - great money - and “BLS” from Euchareena making 743. Cardings had a steadier sale but all 3 centres’ MCIs are now within 13 cents of each other - 1062 to 1075 as LKS and STN rose by 25 to 30 cents while CRS were 10 better. Crossbreds also increased in value as finer types <26 looked 20 to 25 cents dearer while 28s and broader gained 10 to 15 cents.

Forward sellers look to be the dominant force behind this latest upward trend as they look to cover open positions rather than indent operators who only became active late on Thursday as prices stabilised, securing only a portion of their usual weekly volume. Local traders had very little greasy stock on hand over the recess and with new forward sale into India, Europe and China most buyers found themselves short and buying wool became a matter of urgency.

Away from the auction room traders were coming to terms with the devaluing of the Chinese CNY by 1.9% - the biggest devaluation in 20 years. A further 2 devaluations saw 4% cut from the CNY sending currencies around the globe higher - the $AUD moving from 72.4 to 74.3 US cents this week. The devaluing was a result of a slow-down in China’s economic growth sending their exports cheaper and the costs of imports to China rising. What this means for Australian wool is that the Chinese need more CNY to buy $US for wool purchases but for Chinese manufactures exporting garments a weaker CNY reduces the price of the purchaser of Chinese made goods imported by other countries.

Next week will see only 31,000 bales on offer on the East coast as Fremantle could not roster enough volume to hold a sale. This follows on this week’s smallest 3 centre sale in 4 years of just 28,500. Lack of quantity should keep the market at these levels.

 

Ag Concepts Fwd Prices as at 14th August 2015

Micron

Date

Low

High

21

23-Sep-15

1360

1380

28

9-Dec-15

1300

1300

19

10-Feb-16

1400

1400

21

23-Mar-16

1298

1300

21

22-Jun-16

1300

1300

21

7-Dec-16

1275

1275

 

Main Buyers (This Week)

1

Techwool

3728

2

Fox & Lillee

3034

3

Global Wool Exp.

2288

4

Lempriere

2283

5

Chinatex

1924

6

Australian Merino

1880

7

Modiano

1549

8

PJ Morris

1382

9

Tianyu

722

Eastern Market Indicators (AUD cents/kg clean)

1304 cents é 46 cents compared with 7/08/2015

Northern Market Indicators (AUD cents/kg clean)

1323 cents é 41 cents compared with 7/08/2015

AUD/USD Currency Exchange

0.739 é 0.0061  compared with 7/08/2015

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