Weekly Market Reports


5 June 2020

admin Macwool - Friday, June 05, 2020

 WEEKLY MARKET REPORT 

Week Ending 5th June, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S49/19

This Week

M49/19

Last Sale

S48/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1659

1622n

1653

+6

-

-

18

1504

1493

1498

+6

2318

-814

19

1389

1386

1363

+26

2193

-804

20

1318

1312

1296

+22

2179

-861

21 1298n 1299n 1275n +23 2174n -876
 26  - 823n  801n (M) +22 (M) 1448n (M) -625 (M) 

28

615n

608

600n

+15

1115n

-700

30

-

500n

459 (M)

+41 (M)

939n (M)

-439 (M)

MC

884n

879n

843n

+41

1021

-137

CAN THE MARKET RISE 3 WEEKS IN A ROW??

With just the 2 eastern seaboard centres selling this series’ supply, or lack of, was always odds-on to come out in front. The national weekly offering of 15,300 bales was the smallest in 25 years as the market followed conventional economic theory of reduced supply attracting stronger demand. With supply so light only a few extra orders in the market had demand increasing to have the AWEX EMI add 13 cents to 1183. Even more impressive was the rise in US$ terms (up by 44 cents to 821) a consequence of the FRX appreciating in favour of the A$ by 3 cents (4.5%) - a massive shift. Fine fleece indicators < 18 micron were marginally dearer (5 to 10) while 18.5s to 22s added 15 to 30 cents. Skirtings outdid their fleece counterparts climbing by 25 to 45 cents with only 24 bales passed-in as extra knitwear orders were placed. Carding continued their price recovery as all types in this sector were quoted 20 to 40 cents higher to have the MCI gain 41 cents to 884, an 89 cent (11%) rise over the past 3 weeks having reached a low point that was too hard to ignore a month ago. Crossbreds also benefitted from the renewed demand to rise 10 to 30 cents.

One thing that is noticeable is the slight improvement in yields of fleece wools. The recent rain has certainly washed some dust out and the resulting ground cover has less dust being kicked up from sheep moving through paddocks. Buyers are certainly looking forward to being able to buy higher yielding wools but will also have to contend with a higher VM %  and are still having difficulty placing types with high mid-breaks and low tensile strength - these should decrease as we move through winter.

Three weeks of rises from the past 5 sales would suggest a recovery is on the way?? No-one is prepared to go out on that limb and declare the worst is behind us. Tight supply has certainly been the main reason for the market’s steady tracking recently and, as this series showed, even as the FRX shot up to a 4-month high, it couldn’t dampen buyers’ renewed demand. Global economic conditions have not changed but, as travel and social-distancing restrictions ease and people return to full-time work, then will we see a lift in consumer spending and demand for discretionary goods as money becomes more readily available to spend on non-essentials. How long could this take?? Given the March quarter recorded a negative growth figure in every developed economy (Australia was -0.3%) and the June quarter will be worse, we are still going into a recession and not beginning to come out of it so global economic recovery may not even start till late this year/early 2021. The European Commission is providing a $750 billion recovery fund of which $500 billion is in the form of grants to help economies get back on their feet and consumers to resume work and spend again.

Fremantle joins the fray again next week as the national catalogue rises to 24,000 bales. Hopefully not enough to dampen demand given the sharp rise in the FRX.

 Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1270

Main Buyers (This Week)

1

Endeavour Wool

2133

2

Techwool

1922

3

Aust. Merino

1596

4

Fox & Lillie

1240

5

United Wool

1014

6

Kathaytex Aust.

988

Eastern Market Indicators (AUD cents/kg clean)

1183 cents é 13 cents compared with 29/05/2020

Northern Market Indicators (AUD cents/kg clean)

1232 cents é 20 cents compared with 29/05/2020

AUD/USD Currency Exchange

0.6941 é 0.0300 compared with 2/05/2020

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