WEEKLY MARKET REPORT

Week Ending 16^th December, 2016

AWEX Northern Micron Indices Comparison

A SOLID FINISH. MERRY CHRISTMAS & A HAPPY NEW YEAR!!

More than 55,000 bales were offered this week - the largest national total since January and the final sale of the 2016 calendar year. Unlike in recent weeks where the market has been subject to large price increases or corrections, Wk 24 saw a gradual increase in prices across all centres on all selling days, although most price increases were experienced during Wednesday’s selling. After steady price rises throughout the sale all merino sectors generally finished the week 10 to 20 cents above levels recorded in the previous sale. A pleasing aspect were the culprits (off style, lower types) that dragged the market back last sale which were in higher demand than their more fancied counterparts, dearer by 40 cents.

The skirting market performed better than the fleece in Sydney and Fremantle (on average 20 cents dearer for the week) while Melbourne was firm unchanged compared to the previous week. It was the largest offering of Crossbreds in 2 years and 34% larger than last week. Prices drifted lower and poorly prepared lots, in particular, were neglected then increasingly discounted as the sale progressed. Prices were generally discounted between 5 and 20 cents with the coarser end least affected. The oddment market was one of small mixed movements. Small price rises and increases saw an average decrease of 5 cents in the Eastern Merino Carding Indicators and a 2 cent increase in the Western Region, all 3 centres MCIs now within 4 cents of each other - 1131 to 1134.

A good finish to the year considering the increased volume over the past 4 sales contributing to a 55,000 bale increase in wool offered to date YOY. The continued good demand for merino combing wool and the favourable exchange rate helped the merino sector finish on a good note. The same can’t be said for crossbreds. They lurch from bad to worse with several broad burry types virtually neglected. Any sign of improvement seems a long way off.    

The EMI finished the 2016 calendar year 90 cents higher (+7.1% YOY) at 1355 cents - the highest ‘calendar year’ closing figure on record. Turnover for 2016 was just over 2.5 billion dollars (AUD) - the largest amount since 2002 (2.9 billion during that year when volume was 62% higher). Average dollars per bale in 2016 (excl. NZ) was $1478, the highest on the AWEX database (since ’97).

Sales resume on the week beginning the 9th January, 2017, with selling in Sydney, Melbourne and Fremantle with an expected catalogue of 55,000 bales. Merry Christmas and a safe and Happy New Year to all our clients!

Ag Concepts Fwd Prices at 16 December 2016

Main Buyers (This Week) 

WEEKLY MARKET REPORT

Week Ending 9^th December, 2016

AWEX Northern Micron Indices Comparison

BUYERS EXACT REVENGE!

The market went in all directions - up, down and sideways. The subtle drop in prices in Fremantle last Thursday was just a precursor to what was to unfold this week. With volumes exploding this and next week, buyers took their foot off the accelerator from the get-go. From the outset in Melbourne on Tuesday the market came back to earth with a thud. As Sydney and Fremantle joined in on the 2^nd day, those 2 centres fell to Melbourne’s levels that actually sold to sellers’ favour. The final day saw a consolidation of up to 15 cents to finish the sale on a firming note. By week’s end all microns gave up 30 to 50 cents with “off types” and lots outside specs neglected to fall up to 100 cents. Even with the big drop in prices some lots with up to 2.4% VM and a bit over-long (110mm) just to name a few, made 25 to 70 cents above their indicators.

Skirtings also felt the full force of price reductions, large falls to open proceedings followed by a final session recovery. Across all types and descriptions, regardless of VM, losses ranged from 40 to 50 cents. To everyone’s surprise the largest crossbred catalogue since January (23% of the eastern seaboard offering) performed the best of any sector. Finer types <28 were up to10 cheaper while 30s and broader lifted by 20 cents. Cardings also seemed to be less affected than their merino combing wool counterparts. Locks were the main culprit giving up 15/25 cents while STNS and CRT remained solid all week.

The EMI lost 29 cents to 1349 - its largest weekly fall since early November (28 cents) wiping out 30% of the past 3 week’s gains. In $US terms the loss equated to just 9 cents - now 1012 - due to the strengthening $A. The spike in volume following the “bull run” over the past month; this week’s sale blowing out by 18% from estimates 2 weeks ago; and some outstanding orders finished coupled with a rise in the A$ all conspired to this sale’s correction. The extent of the opening day’s fall in Melbourne (25 to 65 cents) took everyone by surprise as talk on the showfloor was in the range of 20/30 cents. As one buyer put it, half of the fall was due to “local exporters panicking”, not a full pull-back in price by the Chinese as they are “still desperate for wool”.

Next week will be the final sale before the 3 week Christmas recess. The anticipated catalogue of 56,000 bales is the largest since mid January but, coming off a slight recovery on Thursday and futures out to February, 2017, are 10 cents dearer than the physical price, there may be enough demand about to soak up the extra 20% in volume from estimates early last week.

Ag Concepts Fwd Prices at 9 December 2016

Main Buyers (This Week) 

WEEKLY MARKET REPORT

Week Ending 2^nd December, 2016

AWEX Northern Micron Indices Comparison

NEXT FORTNIGHT’S VOLUME WILL DICTATE MARKET DIRECTION

The market continued on its merry way albeit at a steadier pace despite prices stalling late on Thursday. The AWEX EMI posted a 15 cent gain to 1378 (a 5 year high). The rise was similar in $US terms (17 cents to 1021). Buyer focus was on the excellent superfine selection in the last “designated superfine” sale of the year. 18.5 and finer lifted by 35 to 65 cents and, in some cases, up to 300 cents for the absolute crackers. The medium types (19 to 21s) were 5 to 20 cents better.

Skirtings continued to forge ahead <18 micron up to 4% VM added 50 to 70 cents with some isolated types dearer by 100 cents while 19s and broader (regardless of burr content) gained 20 cents. Cardings improved: all types in this sector 15/20 cents to the good and nearing January’s 10 year record level. Crossbreds look to have bottomed out as most indicators added 5 to 15 cents, bar 26 to 28s these finishing flat to buyers’ favour.

The market’s run has now extended to 10 days as the EMI has climbed 95 cents in that period - 1283 to 1378. Since the US election it has been a dramatic turn around when the market gave up 48 cents in the week before the election. Despite the rising market the pass-in rate climbed to 6.2% (the largest in 3 sales) this probably due to crossbred growers taking a stance against these levels and some superfine growers setting their sights too high. The recovery in the superfine sector has been a long time coming. The gap from 18 to 21 micron is now 300 cents, about where it should be and above the 10 year average of 250 cents, as prices for <18.5 get back to levels which are profitable.

Future’s trading was brisk early in the week with 113.5 tonne traded as far out to January, 2018 (19 mic @1510 for 5000kgs). The market may have reached a peak for the time being. The fall in Fremantle’s Indicator of 6 cents on Thursday could be a sign that buying urgency has slowed as the next 2 sales should see the anticipated offering of well over 50,000 bales each week giving them plenty of wool to pick from. Quantities have obviously become larger due to the rising market as some growers with wool on “hold” offer their wool to cash in on these good levels. Also adding to the quantity was AWTA November figures released, up a whopping 21% from a year ago as dry weather prevailed allowing shearing to catch up. Issues have emerged around the Chinese annual CSQ (country specific quota) as many mills are fulfilling this year’s quota. Year–on-year demand is better as prices are 10% higher in an offered volume of 1^st hand wool that is >6.2% as the demand is coming from the recovering weaving sector that requires longer (fleece) types.

Ag Concepts Fwd Prices at 2 December 2016

Main Buyers (This Week)