Weekly Market Reports


23 March 2018

admin Macwool - Friday, March 23, 2018

WEEKLY MARKET REPORT

Week Ending 23rd March, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/17

This Week

M38/17

Last Sale

S37/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2776

2740n

2746n

+30

2411

+365

18

2348

2279n

2328

+20

2242

+106

19

2074

2044

2027

+47

1945

+129

20

1960

1947

1912

+48

1620

+340

21

1914n

1888

1854

+60

1484

+430

22

-

1844

1823n

+36 (M)

1409n (M)

+435 (M)

26

1168

1185n

1153

+15

1015

+153

28

842

839

804

+38

745

+97

30

588

595

571

+17

575

+13

MC

1330n

1327n

1298n

+32

1227

+103

MARKET RECAPTURES SOME LOSSES!

After 2 weeks of negative direction the wool market went some of the way to recovering some of those losses. The AWEX EMI posted a 27 cent rise (identical to the previous sale’s losses) to finish the week at 1778. The EMI in US$ terms was virtually unchanged, a drop of just 2 cents to 1377, this due to the erratic swings of the FRX from 78.7 last Friday to a low of 76.75 on Wednesday to settle at 76.85 cents this morning - a 2% swing at one stage to the exporters. Signs that the market might settle came through late on Monday as futures were trading solid to dearer out to the spring and early into 2019. This led to the physical market rocketing to life on Wednesday as all sectors (bar skirtings) added 20 to 50 cents. This rapid and welcome rise was somewhat tempered in the final session as the FRX influenced prices to see most types give up 5 to 15 cents. Discounts for the usual faults in the fleece sector shrunk to almost nothing as buyers chased the smaller offering to see less than 1% passed-in on the opening day.

Skirtings had a reasonable sale without benefitting from any real increases like their fleece counterparts. The finer micron < 18 and < 5% VM were quoted about 10 cents dearer as the 18/19 micron types with 5 to 8% VM lost 10 to 20 cents. Cardings had a good sale after the big first session rise - prices consolidated on the final day. Both MCIs on the East Coast averaged 30 cent gains to be back above 1300 cents (1330 and 1327) most types in this sector lifted by 30 to 35 cents. Crossbreds also were swept up in the rising market to recover last sale’s hiccup. All microns rose by 15/20 cents except 28s which leapt by 38 cents to have the XB sector record 5 weekly gains from the past 6 sales.

Plenty of factors came into play this week to influence the direction of the market. The smallest national catalogue of the year (38,200 bales), an improvement in prompt demand and a favourable FRX early in the series all had their roles in lifting the market and some buyers had already locked in at the cheaper delivered price (in US$) and other FRX which also boosted the market and for some microns (19 to 21) beyond the currency shift. Thursday’s slight pullback was almost completely blamed on the explosion in the offering for next week, a 21% increase (8000 bales) to 47,000 bales - Sydney’s volume almost doubling for the showcase sale at the Royal Easter Show. Once buyers saw these figures pressure came off to secure wool and the appreciating A$ took any urgency from buyers’ purchasing strategies.

Can the impending USA-China trade war affect the wool market?? Who knows? Stock markets and FRX fell heavily overnight and today as the Trump Administration announced tariffs of US$60 billion on Chinese imports in retaliation to theft of intellectual property. The A$ has retreated in morning trade to below 77 cents helped down by falls in key commodity prices and a slight rise in the unemployment rate. The A$ is 5.5% lower than its late January peak or 81.35 cents as the trade war and lifting of US interest rates will keep our currency under pressure and volatile.  We offer 1200 bales on the opening day (Tuesday) of the Easter Show sale, hopefully the lower A$ is enough to see the market stabilise.

Ag Concepts Fwd Prices as at 23 March, 2018

Micron

Date

Low

High

21

28-Mar-18

1875

1875

Main Buyers (this week)

1

Techwool

5432

2

Fox & Lillie

3749

3

Seatech Ind

2838

4

Endeavour  Wool

2808

5

Aust. Merino Exp.

2258

6

Modiano

2181

7

Tianyu

1827

8

Lempriere

1333

9

PJ Morris

1079

Eastern Market Indicators (AUD cents/kg clean)

1778 cents é 27 cents compared with 16/03/2018

Northern Market Indicators (AUD cents/kg clean)

1852 cents é 26 cents compared with 16/03/2018

AUD/USD Currency Exchange

0.7745 ê 0.0131 compared with 16/03/2018


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