WEEKLY MARKET REPORT

Week Ending 18^th May, 2018

AWEX Northern Micron Indices Comparison

MARKET HEADS TOWARDS THE STRATOSPHERE!

There was absolutely no hint of a correction this week as the wool market went on another upward trajectory similar to last series. The AWEX EMI added 52 cents to its value to smash through the 1900 cent mark to finish the sale at 1943, yet another all-time record. In US$ terms the gains were much the same - a 49 cent rise to 1462 (its highest level in 7 years) as the FRX did move around a bit, at one stage dropping to below 74.5 cents then regaining some ground to 75.25 this morning. They are now referring to this extended period of gains as a “super-cycle” that has lasted 112 weeks outdoing the raging market in the late 1980s. Most merino fleece types added 35 to 85 cents with no wools neglected (just 1% passed in) as 18 to 22 micron are now in all-time record territory in the 3 centres.

Skirtings also took a quantum leap as < 18 micron skyrocketed by 90/100 cents with the 19s and broader 60 cents to the good as buyers almost completely disregarded faults like colour, cott or VM.  Cardings took their lead from the other merino sectors as all types in this category lifted by 15 to 40 cents to have all 3 regional MCIs above 1400 cents. Crossbreds had a relatively quiet sale bar 26 micron which jumped by 50 cents, others up to 10 dearer as 26s and 28 micron re-write the record books with new highs.

No-one could have anticipated the rises of the past few sales as the growers lucky enough to have wool in the last 3 weeks have benefitted from a “buying frenzy”.  Can it keep going, when/if the correction will come and how big will that correction be??? These were hot topics of discussion at the 87^th Congress of the International Wool Textile Organisation in Hong Kong this week. A plethora of items were on the table from drought and supply concerns in Australia (notably NSW) and foreseeable low levels of production for the next 2 years to the demand side - global economic conditions are very good with consumer confidence levels still very high. The recent survey of wool textile conditions from IWTO is positive right through the industry. Retail and online sales have risen in China by 8 and 22% with an ever-increasing emphasis on sustainability. Also a good session was “wool’s contribution to wellness” the benefits of wool’s impact on human skin health, especially babies. Next sale’s roster drops even lower to 32,000 bales. Where to for the market, who knows???

                   Ag Concepts Fwd Prices as at 18 May, 2018

     Main Buyers (this week)