WEEKLY MARKET REPORT 

Week Ending 31st May, 2019

 AWEX Northern Micron Indices Comparison

MARKET REBOUNDS WITH A VENGEANCE!!

The wool market’s resilience has been no more evident than in this sale following the fortnight of big losses. Signs that prices may have leveled last Thursday with very minor downward adjustments gave growers hope that fortunes would turn and a rebound was imminent. Talk on Friday that business was written the previous night and the market would be okay was on the money with one buyer sending texts that the market would be “definitely dearer” as plenty of new business was done on Friday afternoon.

All sectors of the market rose as the EMI posted a 54 cent gain to 1887 wiping out almost half the losses of the 2 previous sales. The rise was similar in US$ terms, 46 cents to 1307 as the slight ascendency in the A$ had no adverse effect. The mid microns (18 to 22) had the largest gains, 40 to 50 cents while < 18 added 20 to 35 cents with buyers desperate to secure the limited volume of superior types (100 cents higher) with the inferior types even playing catch-up as lack of quantity came into play. Skirtings clawed back the recent losses with rises of 30 to 50 cents. LKS drove the MCI up as they gained 20 to 30 cents and, after the 2 sale savaging that XBs took, their prices recovered by 50 cents.

Why the sudden change of sentiment?? Trying to figure that out is nearly impossible. Fundamentals haven’t changed, global economic growth is slowing, consumer confidence in China has dipped, the US/China trade war is still raging, there is price resistance at the retail end and last stage processing and still the ongoing problems in the UK with Brexit and a new British PM on the horizon. These past few weeks are just a classic case of how things can change in the blink of an eye, from “doom and gloom” to “all good” overnight. When they need to buy wool nothing else matters and when the market falls there are many varied theories as to why.

Where to from here?? Commodity markets have a habit of fluctuating widely and the wool market is no different. One certainty is the lack of volume. The national offering this season to date is 215,000 bales (12%) less than last year. For the past 2 sales and the next 3 to come, the average weekly volume is just 23,000 - 4,000 bales/week less than last season. Will the tight supply be enough to keep the market trending dearer???

Ag Concepts Fwd Prices as at 31 May, 2019

Main Buyers (This Week)