WEEKLY MARKET REPORT 

Week Ending 26th June, 2020

 AWEX Northern Micron Indices Comparison

A SEASON TO FORGET!!

Another poor week for the wool market as the final sale of the season brought more misery for wool growers to finish a season to forget for so many reasons. Our bleak prediction that the AWEX EMI could fall below 1100 cents almost came true as it finished the season at 1110 (a fall of 29 cents) saved only by a steadying market on the final day of selling. All merino fleece microns fell by 20 to 40 cents. Skirtings had a mixed sale as finer than 17.5 held their ground as the broader types retreated by another 40 to 60 cents. Cardings also continued their cheaper trend as all types in this sector fell by 40 to 90 cents and, to round out the disappointing week, crossbreds lost 30/40 cents.

The only few good things to report on over the past season has been the incredible prices that lambs, sheep and cattle have been making for some time now and autumn rains over a vast area breaking the back of the drought. As far as wool prices go it is a season to forget. A 605 cent reduction (1715 to 1110) is the sad tale of the tape - a 35.3% fall. In US$ terms the losses were identical in % terms a 35.8 fall from 1199 to771. The FRX however is virtually unchanged at 69 cents with a peak over 75 and a low point of 55 cents. With the falling market the pass-in rate climbed to 17% up from 11 last season. All this despite the national offering being reduced by 195,000 bales to 1.47 million, an 11% drop in volume primarily due to drought. No1 buyer was Techwool Trading securing 178,000 bales; next was the new buying entity having its first full year of trading was Endeavour Wool with 111,000 bales; and 3^rd was Fox & Lillie who bought 104,000 bales. The top 10 buyers bought 72% of the offering.

This is certainly a season to forget. After a run of very high wool prices that started back in 2016 the end of the “super-cycle” started almost 2 years ago but did recover until Easter last year when the current run of falling prices we are in now began. The big fall in August last year from 1754 to 1365 certainly put paid to any price recovery back to the lofty heights the EMI enjoyed. The market did seem to find a base to trade between 1500 and 1650 from September to March when it started to fall to today’s level. The reasons are varied for the falling market, from prices getting to high, (every commodity has a point when price dictates over everything else) to drought affected wools to, of course, the devastating effects of Covid-19. When will economic growth lift?? The pandemic is still rampant in many countries and, with the fear of a 2^nd wave, this could delay global economic recovery by another 6/12 months as most countries are still heading into recession, let alone on the road back so consumer spending on discretionary goods like clothing and electronics will be very slow.

The new season starts next week with 31,000 bales on offer in the 3 centres. If new business isn’t forthcoming, the market will struggle to hold where it is.

Southern Aurora Fwd Prices            

Main Buyers (This Week)