Weekly Market Reports


29 April 2016

Friday, April 29, 2016

WEEKLY MARKET REPORT

Week Ending 29th April, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/15

This Week

M44/15

Last Sale

S43/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1523

1522

1491

+32

1404

+119

18

1482

1485

1433

+49

1372

+110

19

1431

1435

1387

+44

1313

+118

20

1391

1387

1350

+41

1269

+122

21

1367

1356

1325

+42

1248

+119

22

1335n

1333

1306n

+29

1202

+133

26

1021n

1027n

1013n

+8

971n

+50

28

772n

774

777

-5

858

-86

30

669n

672n

669

0

799

-130

MC

1013

1045

1013

0

994

+19

MARKET REBOUNDS … BUT FOR HOW LONG?

 The change in sentiment late last week certainly flowed through to this sale. The gains in the EMI were a complete and identical reversal of the previous sale’s losses, up 24 cents to 1241. In US$ terms the change was minimal - just a 4 cent loss to 946 cents - again exchange rate shifts the dominant factor. Unlike the sale immediately after Easter the gains in the market were far more measured and controlled with both days’ rises much the same. While the bidding was spirited and keen, the “panic buying” was not evident like 3 weeks ago. Rises were across the board as 17 to 23 micron lifted by 30 to 50 cents with <16.5 up 20 cents (spinners and best top-makers <18 micron gained 60 cents). The low VM types came under most pressure as volumes of these become scarcer whereas high VM lots were being discounted as their numbers grew. Merino fleece types carrying over 1% VM accounted for 53.5% of the national catalogue, a 2 year high (reflecting the seasonal conditions especially in NSW and VIC). The rising market saw discounts shrink and clearance rates escalate, over 99% of fleece in Sydney was sold on Wednesday

Skirtings didn’t have the buyers’ urgency that the fleece types had but still managed subtle gains of 5 to 10 cents. Crossbreds had a mixed sale as finer types <26 micron looked up to 10 cents better as broader types were flat to buyers’ favour. Cardings shook off last sale’s collapse to finish the week unchanged.

A good rebound in the market after the big losses of the previous fortnight. The sharp fall in the exchange rate of over 2 cents looked to be the catalyst for the market to gain momentum throughout the sale. The A$ had its largest 1 day fall in 8 months due mainly to poor inflation data speculating talk of an interest rate cut next week. The release of the “deflationary” March CPI figure saw the A$ collapse to just over 76.50 cents. The annual rate of inflation of 1.55% is the lowest since records started in 1983. Whatever the decision of the RBA next Tuesday, it will move the A$ - up or down depending on the decision of the board.

Also helping the market was the smaller national offering. At 34,300 bales this was the smallest national catalogue since late September and, with only 5.6% passed-in, this saw 32,500 bales cleared to the trade. The small volume of prompt supply locally and low global stocks of merino fleece has this sector sensitive to currency movements as demand remains steady and any improvement in demand will see a price rise regardless of currency shifts. Demand for crossbreds and cardings remains speculative as uncertain demand levels have these types struggling to find a firm basis but these types are coming off record highs over the past year.

Quantities rise slightly to 38,000 bales next week as some sort of consolidation at these levels would be a good outcome. With the budget due to be handed down next Tuesday and the RBA Board to meet and decide on an interest rate cut, it will be worth following to see how the A$ will react on Tuesday night in European and US markets. We sell 1st up on Wednesday next week with a catalogue of 1540 bales, the largest catalogue in Sydney.

                                                               Main Buyers (This Week)

1

Techwool

6134

2

Fox & Lillie

3258

3

PJ Morris

2575

4

Chinatex

2265

5

Lempriere (Aust)

2214

6

Aust. Merino

2115

7

West Coast Wools

1179

8

Vic. Wool Proc.

1088

9

Tianyu Wool

726

  

Eastern Market Indicators (AUD cents/kg clean)

1241 cents é 24 cent compared with 22/04/2016

Northern Market Indicators (AUD cents/kg clean)

1262 cents é 23 cents compared with 22/04/2016

AUD/USD Currency Exchange

0.7621 ê 0.0186  compared with 22/04/2016

22 April 2016

Friday, April 22, 2016

WEEKLY MARKET REPORT

Week Ending 22nd April, 2016

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S43/15

This Week

M43/15

Last Sale

S42/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1491

1491

1509

-18

1382

+109

18

1433

1437

1465

-32

1356

+77

19

1387

1384

1411

-24

1291

+96

20

1350

1345

1375

-25

1254

+96

21

1325

1317

1361

-36

1227

+98

22

1306n

1299

1340n

-34

1192n

+114

26

1013n

1024n

1014n

-1

951n

+62

28

777

772

791n

-14

860

-87

30

669

677

681n

-12

809

-140

MC

1013

1046

1074

-61

983

+30

 WE’VE HIT THE BOTTOM!!

 The market’s negative tone was the main feature of this week’s sale. The benchmark EMI lost another 24 cents to 1217 (a fall of 53 cents over the past 2 sales), now at its lowest point for 6 months. In US$ terms the loss was the barest minimum (just 1 cent to 950) due to the upward shift in the exchange rate. All the good work the market had done pre and post Easter is completely gone. The A$ peaking at 78 cents during the week (a 12 month high) was the main culprit as was a major discrepancy in national totals.

Most of the fleece losses occurred on the opening day in a very tight range of 25 to 30 cents across the full micron spectrum of 16 to 23. Some types (<20 micron) did stage a slight recovery on the final day to claw back up to 10 cents leaving 20 micron and finer 15 to 25 cents back for the sale and 21s and broader 30 to 35 cents lower.

Skirtings followed the fleece room pattern with a cheaper opening session only to firm up on the final day.  The dwindling volume of <3% VM types were 5 to 10 cents cheaper while the heavier VM lots gave up 20 to 25 cents. Cardings took the biggest hit of any sector, a massive 61 cent collapse, to 1013; the largest weekly fall in this sector for over 2 years and from a high of 1100 at the end of February. Crossbreds also took a hit as <26s were unchanged while 28 and broader gave up 10 to 20 cents.

Another tough sale by anyone’s standards to finish a horror fortnight, especially after the great sale held in conjunction with the IWTO Congress in early April. As mentioned earlier, there was a major discrepancy with this sale’s anticipated totals. An estimation of 37,000 bales was given 2 weeks ago, then less than 24 hours later that had ballooned to 49,000 - a big jump due to the big rise in Sale 41?? Not quite, the estimation of 37,000 left Fremantle’s offering of 12,000 out. This wide variation in totals affected buyer sentiment giving the Chinese just the excuse they were looking for to sit out of the market to see how much further it would fall. Of course the rising exchange rate did us no favours either.      

The withdrawn rate escalated this week as 14% was pulled out leaving only 42,000 bales on offer and, with 15% passed-in, this saw only 35,500 bales actually sold to the trade.

The firm market on Thursday gives us hope that the bottom of the market may have been reached (for now). We sold a few passed-in lots this morning which is always a good sign. Next week’s 38,000 bale selection will be the smallest for 10 weeks and, if any reasonable quantity has been sold, buyers may well be caught a bit short, with a solid market to a touch dearer all the talk.

Main Buyers (This Week)

  

1

Techwool

3620

2

Global Wool Exp.

3594

3

Aust. Merino Exp.

2755

4

Fox & Lillie

2712

5

Tianyu Wool

2498

6

Lempriere (Aust)

2491

7

PJ Morris

2128

8

G Schneider

1651

9

Chinatex

1153

 

Eastern Market Indicators (AUD cents/kg clean)

1217 cents ê 24 cent compared with 15/04/2016

Northern Market Indicators (AUD cents/kg clean)

1239 cents ê 26 cents compared with 15/04/2016

AUD/USD Currency Exchange

0.7807 é 0.0146  compared with 15/04/2016

15 April 2016

Friday, April 15, 2016

WEEKLY MARKET REPORT

Week Ending 15th April, 2016

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S42/15

This Week

M42/15

Last Sale

S41/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1509

1500n

1548

-39

1358

+151

18

1465

1454

1506

-41

1341

+124

19

1411

1409

1463

-52

1269

+142

20

1375

1374

1428

-53

1222

+153

21

1361

1356

1410

-49

1200

+161

22

1340n

1335

1395n

-55

1159n

+181

26

1014n

-

1014

0

946n

+68

28

791n

788

820

-29

847

-56

30

681n

690n

706

-25

802

-121

MC

1074

1069

1089

-15

971

+103

 BUYERS’ TACTICS … FRUSTRATING!!

 Wool sales returned to the familiar surrounds of Yennora after 2 “away sales” either side of Easter. It wasn’t the welcoming homecoming that we had hoped for as the softness in the market last Thursday continued unabated as virtually all the gains from last week were wiped out as quickly as they rose. The EMI fell 29 cents in stark contrast to the 31 cent rise the previous sale. Falls were consistent across the board, all microns giving up between 30 and 60 cents. Pass-in rate climbed to 17% as growers were caught by the extent of the falls as all types and descriptions took a battering, bar the best super-fine types <18 micron.

The falls in Room 2 weren’t as big, skirtings remained pretty much unchanged except for types with colour and cott. Cardings lost more ground as most types fell from 5 to 20 cents. Crossbreds also resisted some of the price falls as the finer microns <28 and 32s were unchanged while 28 to 30 lost 25 to 30 cents.

Frustration is probably the only word to describe this week’s sale. How can the market go gang-busters for 2 days adding 40 to 70 cents for fleece types only to give up those gains just as quickly? The writing was on the wall last Thursday as the heat came out of the Melbourne and Fremantle sales but no-one was forecasting the falls or even the gains of the previous sale to the extent they did. History again shows us that 21s cannot stay above 1400 cents, sadly, this time just one day again emphasising just how important locking in forward prices can be.

As is always the case, excuses aplenty when the market falls. The A$ did peak above 77 cents on Wednesday (a 10 month high) certainly not helping - the market did probably rise too quickly in too short of a space of time and the delayed reaction of some brokers to rush wool onto the market after a big rise. Estimates for next week’s sale were 38,000 last Thursday. This jumped to 49,000 yesterday as extra wool in the south and west had been catalogued but will now miss any benefit of last sale’s rises.

Even with the big drop in prices the final day saw buyers willing to buy at the new lower level. Low greasy wool stocks coupled with dwindling volumes of wool tops in the pipeline remain the main driver for future prospects of prices hopefully signaling an upward price direction. Prices should stabilise once the volume of supply drops given demand remains good and the exchange rate stops its erratic movements. Tips are the market could rebound sooner rather than later - here’s hoping!! 

Main Buyers (This Week)

1

Techwool

4920

2

Global Wool Exp.

3377

3

Tianyu Wool

2772

4

Fox & Lillie

2680

5

Lempriere (Aust)

2205

6

Aust. Merino Exp.

2150

7

Chinatex

1659

8

PJ Morris

1599

9

Michell Aust.

769

 

 

Eastern Market Indicators (AUD cents/kg clean)

1241 cents ê 29 cent compared with 8/04/2016

Northern Market Indicators (AUD cents/kg clean)

1265 cents ê 33 cents compared with 8/04/2016

AUD/USD Currency Exchange

0.7661 é 0.0036  compared with 8/04/2016

8 April 2016

Friday, April 08, 2016

WEEKLY MARKET REPORT

Week Ending 8th April, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S41/15

This Week

M41/15

Last Sale

S39/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1548

1525n

1515

+33

1347

+201

18

1506

1492

1458

+48

1305

+201

19

1463

1444

1405

+58

1220

+243

20

1428

1408

1365

+63

1189

+239

21

1410

1393

1348

+62

1173

+237

22

1395n

1381

1333n

+62

1135n

+260

26

1014

1034n

976n

+38

930n

+84

28

820

801

811n

+9

838

-18

30

706

692n

695n

+11

802

-96

MC

1089

1091

1091

-2

949

+140

 from strength to strength at iwto

 It came as no surprise this week that we saw a stronger market in front of 470 delegates from 23 countries representing all sectors of the wool pipeline at the 85th Annual International Wool Textile Organisation conference at the Four Seasons Hotel, Circular Quay.

What was a little surprising was the amount of strength shown, particularly in the fleece categories (where it matters most), across all microns. Our expectations were for, at least, a 20 cent rise which was being tipped to be 10 cents for the conference and 10 cents for demand. Instead it looks we got 15 cents for the conference and the rest genuine demand. We say that as Melbourne, which sold a day behind Sydney fell 10-15 cents yesterday.

Macwool had a larger than normal catalogue of 1,773 bales selling all but two bales for a gross return of $2,536,815 at an average of $1,432 a bale. An outstanding result given this included all oddments, crossbreds and a considerable amount of our fleece section carrying high vegetable fault. These types were up to 100 cents clean dearer than the pre-Easter sale. We were very pleased to see clients make the effort to attend from Coolah, Coonabarabran, Gulargambone, Nymagee and Wilcannia.

Inside the conference it was generally upbeat, certainly compared to previous conferences I have attended. Several factors can be attributed to this. Firstly, the lowest national wool clip since 1925 and forecast to go lower is a major factor going forward. Secondly, and probably more importantly, wool is now placed as a luxury fibre and the rich are getting richer across the world. The key luxury spenders worldwide are identified as the 40-65yo bracket with household incomes over US$125,000 pa. At present China only has 1% of this category but by 2025 there will be an extra 100 million Chinese in this category and largely they are done with buying a house and furnishing it so they move on to spending  money on themselves. 10 years ago we were told the cheap suit was the quickest way for the up and coming Chinese to show affluence - today they now want better quality suits. One of the conference speakers was Paulo Zegna head of Ermenegildo Zegna which has expanded rapidly to 523 stores world wide on the back of luxury suits.

There are plenty more stories to come about wool’s resurgence but that will have to wait for another time. Next week we offer 1147 bales on Thursday for the first time at Yennora in a month!  

Ag Concepts Fwd Prices at 8 April 2016

Micron

Date

Low

High

21

11-May-16

1370

1400

19

6-Jul-16

1405

1405

21

21-Jun-17

1300

1300

 

Main Buyers (This Week)

1

Techwool

7758

2

Chinatex

4196

3

Lempriere (Aust)

4099

4

Global Wool Exp.

3288

5

Modiano

2867

6

Aust. Merino Exp.

2559

7

Fox & Lillie

2352

8

Tianyu Wool

2213

9

PJ Morris

1941

 

Eastern Market Indicators (AUD cents/kg clean)

1270 cents é 31 cent compared with 25/03/2016

Northern Market Indicators (AUD cents/kg clean)

1298 cents é 37 cents compared with 25/03/2016

AUD/USD Currency Exchange

0.7625 é 0.0002  compared with 23/03/2016