Weekly Market Reports


30 October 2020

admin Macwool - Friday, October 30, 2020

 WEEKLY MARKET REPORT

Week Ending 30th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S18/20

This Week

M18/20

Last Sale

S17/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1741

1743 1846
-105 1992 -251

18

1516

1503

1622

-106

1928

-412

19

1313

1317

1419

-106

1848

-535

20

1191

1199

1292

-101

1800

-609
21 1158n 1147 1243n -85 1782 (M) -635 (M)
 26 803n 821n 883n -80 1233n -430

28

593n

598

663n

-70

959n

-366

MC

778n

799n

811n

-33

1086n

-308

MARKET CORRECTED BUT RECOVERY WILL BE SWIFT!

The wild volatility that the market has experienced kept going this series with the upward momentum that showed signs of stopping late last week hitting a brick wall this sale. Showfloor talk of a big correction under the weight of a large catalogue was spot on as the market gave back 80% of the previous series’ gains. A big drop on the opening day followed by a more tempered fall in the final session had the AWEX EMI lose 81 cents to 1138 and 50 cents in US$ terms to 813. The FRX did strengthen during the week by 2/3rds of a cent to 71.45. This certainly not helping but not the major contributor to the falling market. All microns were savaged - 16.5 and 21s the only ones not to fall by 100+ cents (90 and 85) with 17 to 20 micron dropping by 100 to 120. On the flip side, however, we did have some fleece lots realise prices above the quotes that had VM, TDR and high mid breaks suggesting the market had steadied late in the final session. Skirtings were also swept up in the big price adjustment as < 19.5 collapsed by 130 to 160 cents with the broader types reduced by 80/100 cents. Cardings escaped to a lesser extent compared to their merino combing counterparts with all types in this sector giving back 70 to 90 cents. Crossbreds also couldn’t sustain their recovery as finer than 28.5 micron fell by 60 to 100 cents while broader types were quoted down by 40/50 cents.

The market’s reaction to the big offering was highly predictable. The magnitude of the previous fortnight’s rises caught everyone by surprise and the fact that there was no “correction” before this week was probably more of a surprise to all in the industry. The anticipated large catalogue of 44,000 bales was, as history has shown, never going to make it to the auction rooms. 6,000 bales (13.6%) were withdrawn prior to sale and, with the high pass-in rate due to the falling market (9,700 bales, 26%), this left just 27,700 bales sold to the trade incredibly 5,000 less than the week before. How can the market fall with figures like this?? Perception can be a difficult thing to gauge with a normal human reaction to a commodity price rise being to try and take advantage of that short term increase in demand which sometimes, on the demand side, is hard to comprehend why suppliers would want to take advantage of the increased interest and have a situation of a “flooded market” which tends to result in a price reduction.

Ram sales have just about wound up in this area with the focus moving to the south of the state. A few more results: Bungulla at Manilla cleared 92% of their draft to average $1,705 with a top of $6,500; Blink Bonnie at Tarana had a top price of $3,500 to average $1,145 and cleared 87%; Hillcreston Park at Bigga achieved a top price of $7,000 with an average of $1,985  to clear 71%; Hazeldean at Cooma held their “Riverina” sale at Hay with a top price of $7,000 to average $2,600 and clear 90%; Cottage Park at Cooma cleared 92% to average $3,265 with a top price of $11,250.    

As the market tries to stage a recovery the elephant in the room is still Covid-19. The pandemic looks to be on a 2nd wave in Europe with fresh outbreaks as big in numbers as the initial stage. Some governments have reimposed lockdowns and restrictions which will slow economic growth and hinder consumer spending - not a good sign for the wool market looking for increased demand. There should be no problem in the short term however. Already the talk for next week is positive and widespread. The losses of this sale should be cut in half. Good luck in the Cup!!

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1140

Main Buyers (This Week)

1

Techwool Trading

3622

2

Endeavour Wool

3064

3

Lempriere (Aust)

3017

4

PJ Morris Wool

2055

5

Aust. Merino

1865

6

Tianyu Wool

1093

Eastern Market Indicators (AUD cents/kg clean)

1138 cents ê 10 cents compared with 23/10/2020

Northern Market Indicators (AUD cents/kg clean)

1190 cents ê 11 cents compared with 23/10/2020

   AUD/USD Currency Exchange

0.714 é 0.0012 compared with 23/10/2020

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