Weekly Market Reports


22 February 2019

admin Macwool - Friday, February 22, 2019

WEEKLY MARKET REPORT 

Week Ending 22nd February, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S34/18

This Week

M34/18

Last Sale

S33/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2620

2549

2587

+33

2793n

-173

18

2533

2488

2490

+43

2389

+144

19

2422

2384

2342

+80

2153

+269

20

2390

2362

2306

+84

2017

+373

21

2368

2344

2270

+98

1927

+441

26

1414n

1419n

1368n

+46

1128

+286

28

1153n

1145

1080n

+73

798

+355

30

-

983

928 (M)

+55 (M)

591 (M)

+392 (M)

MC

1215

1168n

1183

+32

1348

-133

A DRAMATIC WEEK!

A dramatic week for wool sales globally as South Africa suspended this week’s sale because of the import suspension of their greasy wool to China due to the Foot and Mouth outbreak in January. This led to a major price lift in our market as purchasing orders in SA shifted east across the Indian Ocean to Australia resulting in the AWEX EMI jumping by 59 cents to crash through the 2000 cent barrier to 2027. In US$ terms the rise was just as significant, 50 cents to 1451 as the FRX was stronger trading 71.5 to 72 cents. All fleece types had good gains, 19 micron and broader the best performers, up by 80 to 100 cents while < 19 gained 35 to 50 cents. Skirtings sold to a dearer trend to the tune of 40 to 80 cents depending on type, micron and VM %. Cardings also continued on their merry way as the 3 centres averaged a 33 cent climb with all types in this sector up by 20/40 cents. Crossbreds were also caught up in the buying frenzy; most microns were 40 to 75 cents to the good. One of our XB clips averaged 670 cents/kg to gross $1212/bale (FLC, SKTS and LMS).

Even though the FMD outbreak occurred in the remote north in a cattle herd far from any sheep, the suspension of wool sales came out of left field with no consultation with growers. The market was tipped to be dearer here but with the SA decision panic set in and our market took off. Over-reaction?? Maybe, as SA produce about 250,000 bales of wool/year, 2% of global wool production and 6% of merino, almost entirely < 22 micron with 68% exported to China. A meeting between Cape Wools, the governing body, wool buyers and wool grower bodies have decided to hold next week’s sale but almost certainly without Chinese mills operating. SA wool buyers have warned of a sharp fall in their market next week given the reduced saleroom competition.

The extent of the drought can be seen in the latest export figures to December 2018. Australian wool exports are back by 18% when compared to the previous season with SA down by 17% and NZ, Argentina and Uruguay all falling by 5 to 7%. As a result our major importing countries are down on their volume of wool: China and Czech Republic by 20%, Italy 14% and India 5% but Germany up by a whopping 66%. Next week sees increased volume for sale here with 49,700 bales (up from 41,300 on Monday) as growers rush wool onto the market and in SA this sale’s cancelled offering and next week’s quantity has Chinese processors worried that their ability to absorb the elevated volume will be tested even though they may not buy a bale in SA.

                  Ag Concepts Fwd Prices as at 22 February 2019               

Micron

Date

Low

High

21

12-Jun-19

2260

2260

21

9-Oct-19

2100

2150

21

11-Dec-19

2100

2100

Main Buyers (This Week)

1

Techwool

5847

2

Seatech Ind.

5737

3

Fox & Lillie

3262

4

Kathaytex

2821

5

Aust. Merino

2640

6

Tianyu Wool

2357

Eastern Market Indicators (AUD cents/kg clean)

2027 cents é 59 cents compared with 15/02/2019

Northern Market Indicators (AUD cents/kg clean)

2074cents é 63 cents compared with 15/02/2019

AUD/USD Currency Exchange

0.7160 é 0.0041 compared with 15/02/2019

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