Weekly Market Reports


20 November 2020

admin Macwool - Friday, November 20, 2020

 WEEKLY MARKET REPORT

Week Ending 20th November, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S21/20

This Week

M21/20

Last Sale

S20/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1806

1824n 1845
-39 2008 -202

18

1570

1578

1605

-35

1885

-315

19

1386

1376

1413

-27

1781

-395

20

1229

1228

1278

-49

1738

-509
21 1188n 1174 1226n -38 1729n -541
 26 798n - 838n -40 1200n -402

28

559n

561

600n

-41

899n

-340

MC

704n

768n

731n

-27

1052n

-348

PRICE DIRECTION IS ANYONE’S GUESS!!

The wool market didn’t quite go to script this week as sentiment changed from late last week to pre-sale. Futures trading indicated par to +20 but most exporters were talking the market down before the sale commenced. The talk was spot on as the opening session had all fleece microns giving up 30 to 50 cents. The final day saw a distinct change in sentiment as the market steadied to see some types in sellers’ favour to finish the sale 20 cents lower than the previous week.  Skirtings couldn’t do what the fleece sector did with no second day recovery as falls over the entire sale saw all types and descriptions drop by 40 to 70 cents. Cardings continued to fall as fine LKS < 17.5 micron gave up 65/80 cents with the broader types and CRT & STN 20 to 40 cents cheaper. The MCI lost 27 cents to sit at 704 - the 4th week in a row it has lost ground from the 811 cent high in October - a 107 cent reduction. Crossbreds also continued to lose ground from their highs of 4 weeks ago. All types from 25 to 32 micron fell by 30 to 60 cents and now all about 100 cents from the peak of a month ago. The A$ finished the sale slightly lower than where it was early in the week (73.25), this a factor in the softening prices on the opening day coupled with the anticipated 40,500 bale offering. The AWEX EMI fell by 30 cents to 1159 and lost 24 cents in US% terms to 844 cents.

Most prompt orders had been seemingly covered by exporters last week to leave buyers in a “holding” pattern early in the sale as they waited on a clear price signal from overseas or new business to be written or the market to fall to  new bid levels that downstream users would be happy with to negotiate new business at these price levels. The final days’ price stability coming from a conservative purchasing mode to buy to price advantage rather than accumulate inventory. One of the large Chinese topmakers (Tianyu) looked to ramp up their buying of merino fleece this week to dominate with 20% of the offering, with the next 2 buyers on the list securing 21% between them (Techwool and Endeavour). Traders and 1st stage manufacturers kept pace with the dominant topmaker in the opening session but was outgunned on the final day. Once again the volume of wool to be offered and what actually made it to sale and eventually sold again were worlds apart. The original offering of 40,500 bales failed to make it to auction with over 10% (4,200) withdrawn and, with the falling market, 20% was passed in leaving 29,100 actually sold to the trade. General consensus is that a figure of 40,000 bales/week is enough for current demand to handle but anything over this becomes problematic for exporters to handle. Only 4 sales this season have had a predicted national catalogue of over 40,000 bales and the end result being 10/15% withdrawn and the largest catalogue adding up to 37,500 bales. Next week should be the same with 41,500 rostered but about 37,000 to be actually offered. Surely the Chinese must realise now that the anticipated volume never makes it to sale. Market direction is anyone’s guess depending on which price pattern is followed - weekly or daily movements.

The Responsible Wool Standard (RWS), a farm certification system, has been a growing force in the marketplace of recent times. Big name European and American brands are not only asking for non-mulesed but requesting it with RWS certification. On behalf of our clients we have joined with the Schneider Wool of group of Italy and this week we were the first to be audited in the group’s scheme which includes a couple of other brokers from other regions and states. Around a dozen clients have signed up with the remaining audits to happen between now and Christmas.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Jan/Feb 21

1120

Main Buyers (This Week)

1

Tianyu Wool

4116

2

Techwool

3286

3

United Wool

3174

4

Endeavour Wool

2551

5

Lempriere

1779

6

Aust. Merino

782

Eastern Market Indicators (AUD cents/kg clean)

1159 cents ê 30 cent compared with 13/11/2020

Northern Market Indicators (AUD cents/kg clean)

1214 cents ê 38 cents compared with 13/11/2020

   AUD/USD Currency Exchange

0.7286 ê 0.0021 compared with 13/11/2020

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