WEEKLY MARKET REPORT

Week Ending 19^th October, 2018

AWEX Northern Micron Indices Comparison

FINE WOOL GLUT HINDERS MARKET!

Last sale’s recovery was short lived as the market took a turn for the worst as all sectors fell sharply. The 53 cent fall for the AWEX EMI to 1970 was equal to the losses of 3 weeks ago and just shy of the 62 cent collapse in the opening sale of the season. No type was immune from the negative tone despite the superior quality of the selection on offer with the 3^rd designated Super-fine sale of the season held in Sydney. The over-supply of sub 17 microns suffered the largest falls (100 to 150 cents) and even more for lots with poor additional measurement results. 19.5 to 17.5 also fell 50 to 75 cents with the broader microns > 20 giving up 20 cents late in the final session. Growers were caught by the size of the losses as 23% of the national fleece catalogue was passed-in.

Skirtings also took a decent hit with the high concentration of < 17.5 micron taking the brunt of the falls ranging from 40 to 60 cents. Cardings were the worst performing sector as the 3 centres averaged 100 cent losses. High flying LKS collapsed to the tune of 100 to 150 cents with CRT/STN giving up 30 to 40 cents as 25% of the Sydney offering failed to sell. Crossbreds looked to escape the carnage of their merino cousins as losses ranged from 10 to 30 cents.

Despite the national catalogue falling further behind last year’s figures, now 74,300 bales which is 2 selling weeks or 13% the market couldn’t sustain last series mini recovery. The vast majority of the offering is still very much drought affected and, as a result, finer than what most Chinese mills are looking for and not up to the standard that the Europeans require. This sale’s merino fleece selection on the East Coast was a full micron finer than the corresponding sale last year. This is backed up by the latest AWTA figures that, despite testing 11% less wool than last season to date, 70% more wool tested below 16.5, 19% more in the 16.6 to 17.5 range and 9% up 17.6 to 18.5 micron bracket.

European demand does remain strong on the “right types” as does interest from India but once outside their specs the price gap is up to 800 cents from the very best types to the worst. Demand remains strong for 19 microns and broader as the large topmakers and indent buyers from China are still active and could lead to better market conditions reappearing sooner rather than later.

Next week’s offering is just shy of 39,000 bales with a bit less fine wool on offer to hopefully see a settled market. The slight lift in the FRX didn’t seem to be a hindrance this sale but most pundits don’t want to see the A$ go higher. Don’t forget just 2 weeks left to vote for Woolpoll 2018, just 10% of eligible growers have voted so far.

                               Ag Concepts Fwd Prices as at 19 October, 2018

              Main Buyers (this week)

AUD/USD Currency Exchange

0.7133 é 0.0063 compared with 12/10/2018