Weekly Market Reports


25 November 2016

Friday, November 25, 2016

WEEKLY MARKET REPORT

Week Ending 25th November, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S21/16

This Week

M21/16

Last Sale

S20/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1742

1719n

1667

+75

1511

+231

18

1713

1692

1636

+77

1485

+228

19

1636

1616

1570

+66

1404

+232

20

1515

1508

1451

+64

1338

+177

21

1442

1430

1383

+59

1321

+121

22

1412n

1406

1368n

+44

1309n

+103

26

967n

976n

985n

-18

1028n

-61

28

680

675

668

+12

868

-188

30

573n

576n

560

+13

814

-243

MC

1123n

1150

1103n

1123n

1087

+36

MARKET ON FIRE

Buyers took “no prisoners” this week as buying at times resembled Boxing Day sales as the rush to secure wool was frantic with, every so often, price being almost insignificant. The 49 cent rise in the EMI was double last sale’s increase (24 cents) to 1363 - a 17 month peak and the largest weekly jump in the same period. In $US terms the bounce was 22 cents to 1005. The upward trend was across all microns, types and styles - 45 cents up to an 80 cent hike for 16.5s. The eastern seaboard cleared 99.5% of the fleece offering (94 bales passed-in) from 17,000 offered. One downside was the heavier VM fleece lots, <4% looked to escape any real discounting but >4% actually cheapened up due to very limited demand.

Skirtings outdid their fleece counterparts as buyers pushed the <18 micron below 5% VM up by 85 to 100 cents with the broader, burrier types 60/70 cents to the good selling 98.5% as only 78 bales failed to sell from 5035 up for sale. Cardings continued on their merry way with all types adding 10 to 30 cents as the 3 centres’ MCIs range from 1123 to 1150, closing in on the record levels set in January. Crossbreds were also caught up in the buying frenzy but far more subdued. 26s actually lost 20 cents while all other microns gained 5 to 15 cents. The size of the XB offering (41% in Sydney and Melbourne) weighing heavily on that sector and demand nowhere near the level of 12 months ago.

A great week for merino sellers with low global greasy stocks in front of machinery and favourable exchange rates and impending 3 week Christmas recess driving the bull-run. The $A fell to 73.2 cents as the $US surged to 13 year highs against most currencies as the Dow Jones goes on a record breaking run as the 3 key commodities (oil, coal and iron ore) continue their price recovery. Manufacturers trading in Euros were at a disadvantage as that currency rose by 4% against the $US but, looking at the demand for <19 micron, hardly a concern as a big superfine offering looms next week.

For the 4th sale in a row volumes were within 330 bales (47,000). This stable figure and the US elections ancient history, people are confident going into 2017 with strong US data (home sales at their highest annual rate in 10 years), an impending rate rise and widening bond differentials as investors warm to Trump’s policies that will drive growth and inflation. Most experts predict a solid market at the very least as Chinese interest is good and still a few outstanding forward commitments to cover and no explosion in volumes.

Ag Concepts Fwd Prices at 25 November 2016

Micron

Date

Low

High

21

7-Dec-16

1427

1430

19

25-Jan-17

1555

1555

21

22-Feb-17

1410

1410

21

12-Apr-17

1400

1410

 

Main Buyers (This Week) 

1

Techwool

7609

2

Fox & Lillie

5598

3

Chinatex

3120

4

Tianyu

3119

5

Lempriere (Aust)

2751

6

Aust. Merino Exp

2635

7

PJ Morris

2600

8

Kathaytex (Aust)

2009

9

Kathaytex (Vic)

1709

 

Eastern Market Indicators (AUD cents/kg clean)

1363 cents é 49 cents compared with 18/11/2016

Northern Market Indicators (AUD cents/kg clean)

1418 cents é 59 cents compared with 18/11/2016

AUD/USD Currency Exchange

0.7369 ê 0.0114  compared with 18/11/2016

 

 

 

18 November 2016

Friday, November 18, 2016

WEEKLY MARKET REPORT

Week Ending 18th November, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S20/16

This Week

M20/16

Last Sale

S19/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1667

1648n

1626

+41

1518

+149

18

1636

1626

1610

+26

1493

+143

19

1570

1569

1530

+40

1404

+166

20

1451

1451

1420

+31

1338

+113

21

1383

1373

1366

+17

1325

+58

22

1368n

1353

1348n

+20

1310n

+58

26

985n

990n

996n

-11

1030

-45

28

668

673

674

-6

876

-208

30

560

558

555

+5

831

-271

MC

1103n

1103

1092

+11

1069

+34

 

MARKET RECOVERS MOST LOSSES OF PAST TWO WEEKS

Last Thursday’s turn around in the market flowed through to this week’s sale as solid gains were made over the course of the sale. The benchmark AWEX EMI climbed back over the 1300 cent mark to 1314 - a 24 cent rise. In US$ terms it was a slight reversal of 6 cents to 983, this due to the exchange rate falling to below 74.50 on Thursday. All types across all microns benefitted from the renewed competitive tension in the sale rooms. Finer indicators led the charge, <20 micron up by 25 to 40 cents with 21s and broader 20 cents to the good. Once again lots with the right specs were keenly sought after with premiums up to 100 cents higher than the indicators even with >2.5% VM, colour and mixed length. Our best catalogue in months resulted in 91% (94 lots) of our fleece making over 1000 cents, just 12 lots below that.

The skirting sector faired the best of any sector. Solid gains over both selling days saw all types regardless of VM, style or micron jumping 50 to 80 cents. We sold 16 lots of “BKN” that made over 1000 cents - fantastic money!!  Cardings also shook off last sale’s falls, all 3 MCIs back above 1100 cents as all types posted 5 to 15 cent gains. Crossbreds had a mixed sale. The misery continued on for the finer types (<28 losing 5 to 10 cents) while 30s and broader stopped the rot for the moment adding 5 to 15 cents. The eastern seaboard offering was 26% crossbred, 11% passed-in.    

A stunning about-face for the market. The 3 weeks of 50,000 bales didn’t eventuate as the offerings dropped back to identical volumes of 47,000. The lower than anticipated catalogues and favourable exchange rates (<2.4%) certainly helped as did reports of practically zero stocks of greasy merino wool globally. The lift in the market saw just 66 bales of FLC and 44 bales of SKTS passed-in in Sydney. Futures trading ramped up and lock-in prices for Jan/Feb are 1405, 25 cents higher than the physical price indicating a very ‘solid to dearer’ market next week.

The AGM  for AWI was held this morning  with confirmation that following a 2 phase, 2 year program of consultation, review and discussion of the wool selling system, the Wool Exchange Portal Working Group has reported back to the board that the decision to pursue its establishment was a clear ‘yes” vote unanimously. The working group will report back to the board by April, 2017, on costings, timing and a business case model for funding approval.

 

Ag Concepts Fwd Prices at 18 November 2016

Micron

Date

Low

High

21

18-Jan-17

1405

1405

21

22-Mar-17

1395

1395

21

14-Jun-17

1370

1370

  

Main Buyers (This Week) 

1

Techwool

6985

2

Fox & Lillie

5855

3

Tianyu

3041

4

Lempriere (Aust)

2937

5

PJ Morris

2668

6

Michell Aust

2612

7

Aust. Merino Exp

2297

8

Modiano

2230

9

Kathaytex Aust.

1850

 

Eastern Market Indicators (AUD cents/kg clean)

1314 cents é 24 cents compared with 11/11/2016

Northern Market Indicators (AUD cents/kg clean)

1359 cents é 28 cents compared with 11/11/2016

AUD/USD Currency Exchange

0.7483 ê 0.0185  compared with 11/11/2016

11 November 2016

Friday, November 11, 2016

WEEKLY MARKET REPORT

Week Ending 11th November, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S19/16

This Week

M19/16

Last Sale

S18/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1626

1613n

1643

-17

1505

+121

18

1610

1597

1622

-12

1469

+141

19

1530

1529

1545

-15

1385

+145

20

1420

1416

1439

-19

1318

+102

21

1366

1360

1378

-12

1304

+62

22

1348n

1347

1352n

-4

1288n

+60

26

996n

1016n

1008n

-12

1024n

-28

28

674

671

706

-32

863

-189

30

555

551

565

-10

823

-268

MC

1092

1086

1120n

-28

1064

+28

HILLARY GETS TRUMPED BUT WILL THE WORLD???

The wool market (and all other world events) certainly took a back seat to the most contentious US presidential election in history. In the final wash-up the EMI lost 13 cents (to fall below 1300) to finish at 1290 after an opening day’s fall followed by a surprise recovery on Thursday. In US terms the fall was similar - 9 cents to 989. Losses were fairly uniform, 10 to 20 cents across all microns bar 19.5 and 22s - in buyers’ favour by 5 cents. As has been the case for a long time, wools with good specs (even up to 2.5% VM) were, in some cases, up to 25 cents better than their indicators whereas > 3% VM felt the full force of larger discounts, out to 40 to 50 cents.

The skirting selection followed the pattern of the fleece room, big losses followed by a modest recovery. The better style types finer than 17 micron with <5% VM looked 10 to 20 cheaper while 18 and broader over 5 % gave up 20/25 cents. Cardings also suffered heavy losses, as both days recorded falls. The MCI in Sydney doubled the falls of Melbourne and Fremantle (28 cents to 14 cents) with all 3 centres now below 1100 cents. All types in this sector fell by 25 to 40 cents. The sad story that is crossbreds continued on. Finer microns <25 looked unchanged as 26 and 30 micron lost 10 cents while 28 and 32s fell by 30 cents.  Since September last year, 30 micron has fallen by 38% from its peak.

What a week!! All eyes were on the US as news filtered through that Clinton was leading well early in the count, global currencies strengthen, the $A up to 77.88 early Wednesday pm  but by 6.00pm  it collapsed to 75.80. Counting moved to the mid-west and Trump was securing votes from the Dakotas and Minnesota on the Canadian border all the way down to Texas and Louisiana. This is predominately farming country with white males 30/50 years old backing Trump with a protest vote against free-trade and falling commodity prices. This is where the billionaire with no political or armed services experience and no business degrees won the election. The forecast of a stock market crash of 700 points didn’t eventuate. Instead 400 points has been added to the Dow Jones, a potential 1100 point turn around.

Buyers took advantage of the exchange rate and retuned to the market on Thursday. Next sale will see the 3rd week running of predicted 50,000+ sales. This will not happen as was the case this and last week dropping back 3/4,000 bales. Buyers look to be keen to secure wool leading up to the 3 week Christmas recess as quantities drop back to mid 40,000s.    

Ag Concepts Fwd Prices at 11 November 2016

Micron

Date

Low

High

21

30-Nov-16

1360

1360

21

22-Feb-17

1357

1357

 

Main Buyers (This Week) 

1

Techwool

5277

2

Chinatex

4650

3

Fox & Lillie

4198

4

PJ Morris

3333

5

Aust. Merino Exp

3126

6

Tianyu

2871

7

Lempriere (Aust)

2577

8

Michell Aust

1769

9

Zhong Long Int.

1065

 

Eastern Market Indicators (AUD cents/kg clean)

1290 cents ê 13 cents compared with 4/11/2016

Northern Market Indicators (AUD cents/kg clean)

1331 cents ê 17 cents compared with 4/11/2016

AUD/USD Currency Exchange

0.7668 é 0.0009  compared with 4/11/2016

4 November 2016

Friday, November 04, 2016

WEEKLY MARKET REPORT

Week Ending 4th November, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S18/16

This Week

M18/16

Last Sale

S17/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1643

1623n

1669

-26

1506

+137

18

1622

1605

1641

-19

1484

+138

19

1545

1533

1573

-28

1407

+138

20

1439

1422

1468

-29

1354

+85

21

1378

1363

1415n

-37

1341

+37

22

1352n

1354

1388n

-36

1328n

+24

26

1008n

1025n

-

-59 (M)

1050n

-42

28

706

705

735

-29

878

-172

30

565

572

594

-29

840

-275

MC

1120n

1100

1128n

-8

1077

+42

WE ALL HOPE HILLARY TRUMPS TRUMP!! 

The market finally succumbed to outside pressures as 28 cents was peeled off the AWEX EMI, now at 1303. The losses equated to 18 cents in US$ terms slipping below 1000 to 998 cents. After 5 weeks of consecutive rises a rising exchange rate (peaking at 76.85 US cents), softening demand and the largest national catalogue since early August all conspired to see the market fall. Losses were across the board: <18.5 gave back 20 to 25 cents while the broader microns out to 23 fell 30 to 40 cents. Only the superior style, high NKT and low CVH lots came under previous sale’s competitive tension to fall only marginally or even outdo their indicators by up to 25 cents.

Skirtings weren’t immune from the cheaper tone of the fleece room. Falls were across the board but not to the extent of fleece types. Losses ranged from 5 to 25 cents depending on VM, micron and style. The shine came off cardings as this sector suffered the least to fall an average of 10 cents in each centre. This comes on the back of 7 weekly gains in a row - the MCI adding 79 cents, 1049 to 1128. The main culprit in this sector was STN which fell by 20 cents as all other types remained solid to buyers’ favour. Crossbreds seem completely out of sorts as the finer microns (<26) copped a whipping falling 50+ cents while >28s lost 20 to 30 cents, now hopefully at the bottom of the price cycle. We are in the peak period for XB shearing - 21% of the offering on the eastern seaboard was XB this sale as this figure will increase through till Christmas. At these levels growers might ask the question, “Do we hold till the new year or sell now??”

The perfect storm of larger quantity, higher A$ and weakening demand caught most people unaware. A drier October that allowed shearing to catch up and wool receivals to ramp up has quantities ballooning to seasonal highs, taking the urgency out of buying patterns as exporters can become a bit more choosey with their purchases. Global stock markets have got the jitters as the result of next week’s US election will be closer than was expected only last week, this influencing exchange rates and market directions. A big lift in key bulk commodity prices saw the A$ climb to 77 cents and perhaps closer to 80 cents before Christmas depending on the election outcome.

Testing data released for October shows 4% less wool tested year-to-date than last year even though offerings are still ahead of last season by 19,000 bales (3.3%). This figure should fall as the late harvest will be in full swing soon putting shearing on the back burner to reduce quantities in Sydney but, with 51,000 bales up next week, market might be tough.     

Ag Concepts Fwd Prices at 4 November 2016

Micron

Date

Low

High

21

16-Nov-16

1370

1370

21

14-Dec-16

1370

1370

 

Main Buyers (This Week) 

1

Techwool

6314

2

Chinatex

4289

3

Fox & Lillie

3905

4

Lempriere (Aust)

3096

5

Michell Aust

2933

6

Aust. Merino Exp

2559

7

PJ Morris

2489

8

G Schneider

1530

9

Vic Wool Proc.

1522

  

Eastern Market Indicators (AUD cents/kg clean)

1303 cents ê 28 cents compared with 28/10/2016

Northern Market Indicators (AUD cents/kg clean)

1348 cents ê 27 cents compared with 28/10/2016

AUD/USD Currency Exchange

0.7659 é 0.0029  compared with 28/10/2016