WEEKLY MARKET REPORT

Week Ending 23rd February, 2018

AWEX Northern Micron Indices Comparison

CLOSING IN ON A NEW RECORD AGAIN

The fears of the Chinese New Years holiday adversely affecting the wool market were allayed as modest increases over the series had the AWEX EMI reverse last sales losses to record an 8 cent rise to 1820 to be within a whisker of Januarys all time high. As the FRX moved in favour of the A$ by over a cent to below 78 cents on Thursday, this caused the EMI to lose 17 cents in US$ terms to 1417 cents. All medium microns-18.5 to 22s and 16.5- benefitted most from the renewed buying activity (spurred on by the FRX) adding 20 to 50 cents to their previous values while 17 to 18s were 10/15 cents higher. One factor worth noting is the amount of high VM in fleece wools coming onto the market. FNF types now are just over 50% of the offering making these lots more desirable to buyers as they try to keep averaging 1% VM in their orders. 

Skirting’s had a mixed sale as finer low VM types - <18.5 micron and below 5% VM - bore the brunt of big losses, 50/70 cents while all other types held their ground. Cardings couldn’t maintain last sales modest rises. The 3 centres lost ground, Sydney by 12 cents and Melbourne/Fremantle by 28 and 29 cents. Locks were the biggest casualty, cheaper by 40 to 50 cents while all other types in this sector gave up 10 cents. For the 3^rd sale running XB’s edged higher. Increases ranged from 5 cents for the broader microns-28 to 32- to 15/25 cents for 26s and finer.

The activity and price pressure in trading wool and manufacturing for the past few years now has been ruled by the growing demand. With this price escalation comes finance pressure to be able to continually fund purchases, eg: a full container (108 bales) of merino fleece wool is costing over $300,000. The FRX rate are also playing a part and becomes more critical when demand and prompt business is not apparent or if exporters are reticent to book firm contract and buying is done on indents and in US$.

AWI CEO Stuart McCullough has written to all AWI share holders with the latest developments on WoolQ- previously “Wool Exchange Portal” inviting growers to register. Various functions will be delivered over the next 12 months, starting with an Electronic Speci. Some brokers already offer similar services as far as down-loading speci’s from their websites. AWEX is also developing their own version. With the solid market national quantities have grown to 44,500 bales for next week, up by 14% in 7 days, with all buyers back in full buying mode. We sell late on Wednesday with 959 on offer.     

                                                Ag Concepts Fwd Prices as at 23 February, 2018

Main Buyers (this week)