Weekly Market Reports


4 September 2015

admin Macwool - Friday, September 04, 2015

WEEKLY MARKET REPORT

Week Ending 4th September, 2015

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S10/15

This Week

M10/15

Last Sale

S09/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1487n

1464n

1458

+29

1247

+240

18

1459

1447

1406

+53

1210

+249

19

1404

1397

1343

+61

1175

+229

20

1348

1338

1294

+54

1144

+204

21

1331

1323

1286

+45

1136

+195

22

1322n

1312

1274n

+48

1120 (M)

+192(M)

26

1109n

1112n

1061n

+48

785n

+324

28

940

939n

905

+35

650

+290

30

897

878

862

+35

631n

+266

MC

1085

1085

1063

+22

777

+308

ON THE WAY UP BUT …??

The market has led everyone on a merry dance this week as the yo-yo movement of the market now seems in full swing as predicting market direction, even on a daily basis, is nearly impossible. As alluded to in the previous report, the vast amount of enquiry for passed-in lots and Fremantle’s dearer market on Wednesday gave us hope that the market may well have bottomed out and some sort of recovery was on the cards. This was exactly the case as predictions of 10/15 dearer to 30 better were blown out of the water. The opening day saw increases of 30 to 50 cents across all fleece microns as Thursday’s gains were somewhat tempered but still managed rises of up to 20 cents. This sale’s gains have wiped out the previous week’s losses and goes some of the way to erasing all the losses since the recess.

The EMI rose 36 cents to 1258, a figure that is 233 cents (23%) up on this sale 12 months ago. In US terms the rise only amounted to 11 cents, to 833, just 75 cents (8%) below its level of a year ago. This is due to the massive drop in the exchange rate - down from 93 cents a year ago (25%). The A$ actually slipped below 70 cents on Tuesday after the Feds announcement of interest rate consolidation, a level not seen since the GFC. The currency is just above 70 cents - a slight fall from last week. We were fortunate enough to sell on Thursday capturing the full extent of the market’s recovery.  As is the case, all types were on the buyers’ radar with penalties for over-long, tdr, vm, colour and high mid-breaks shrinking to virtually nothing in some cases as some types (with the right specs) made up to 50 cents higher than their indicators.

The positive sentiment from the fleece room flowed through to the skirtings as all types across the spectrum posted 40 to 50 cent rises, completely cancelling last sale’s losses with most pressure on long, finer lots <19 micron with less than 3%VM. Fine and free BKNs from Yeoval and Dunedoo made over 900 cents with lots from Gulargambone and Nevertire with 12% VM making over 600 cents and low VM BLS fetching mid to high 700s. Again, great money for these types. Cardings also recovered last sale’s losses and then some as all types in this sector quoted as 10 to 25 cents to the good. Both MCIs on the East Coast are now at 1085 cents, a gain of 20 cents for the sale. Crossbreds weren’t to be outdone either as increases of 30 to 50 cents saw a national clearance rate of 99.6%. Once again XB LMS fleece is making high 600s with a 24 micron lot from Tottenham selling for 746 cents!!

How can things be so volatile you may ask?? A hard question to answer as the market has gone on a “bull run” in the opening 2 sales, lost all those gains the next fortnight and makes a recovery this week. Sentiment seemed to change quickly as new business was written and the continued downward shift in exchange rates, especially the Euro, against all other currencies may have been the catalyst for the upward trend. Nothing else has changed over the past 7 days as stock markets are still unstable and China’s economic growth is still slowing as is ours with the economy growing just 0.2% in the June quarter.  What will be of concern to China are the latest figures from AWTA showing a 9% drop in bales tested to date this season compared to the previous (43m kg to 47.2m kg). The annual Nanjing Wool Market Trade Conference will be held next weekend in Qingdao, China, which is normally a good guide to trade activity with the current global economic climate to be a big talking point.

Ram sales kick off in earnest next week. It’s nearly impossible to see where the wool market will head!!                

Ag Concepts Fwd Prices as at 4 September 2015

Micron

Date

Low

High

21

11-Nov-15

1310

1310

21

27-Jan-16

1300

1300

 

 

Main Buyers (This Week)

1

Techwool

4475

2

Chinatex

4212

3

Lempriere

3427

4

Australian Merino

3215

5

Tianyu Wool

3194

6

Fox & Lillee

2670

7

Modiano

2073

8

PJ Morris

1808

9

Michell Aust.

878

Eastern Market Indicators (AUD cents/kg clean)

1258 cents é 36 cents compared with 28/08/2015

Northern Market Indicators (AUD cents/kg clean)

1284 cents é 44 cents compared with 28/08/2015

AUD/USD Currency Exchange

0.7016 ê 0.0119  compared with 28/08/2015

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