Weekly Market Reports


27 May 2016

Friday, May 27, 2016

WEEKLY MARKET REPORT

Week Ending 27th May, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S48/15

This Week

M48/15

Last Sale

S47/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1583

1555

1583

0

1551

+32

18

1557

1541

1555

+2

1530

+27

19

1509

1504

1505

+4

1471

+38

20

1441

1434

1438

+3

1422

+19

21

1404

1404

1404

0

1403

+1

22

1386n

1381

1386n

0

1368n

+18

26

1098n

1093n

1090n

+8

1099n

-1

28

826

819

804

+22

928n

-102

30

715n

709

696n

+19

853n

-138

MC

1096

1106

1089

+7

1088

+8

ROOM 2 TYPES HELP LIFT EMI

 Another solid but unspectacular sale as a modest gain for the EMI of 6 cents to 1297 took it to a 9 month peak. The shift in US$ terms was less, just a 4 cent gain to 935 as the currency had a stable week moving  only .25 of a cent either side of 72 cents. As was the case last week sectors other than fleece were the main contributors to the market’s overall gain.

Fleece types remained flat, bar subtle movements of +5 cents for 18s and 19 to 20 micron. All other indicators were unchanged except 16.5 losing 8 cents for the sale. The FNF types again commanded good premiums over their burry counter-parts, some selling ok, some looking a bit cheaper. Some lots up to 1.5 VM were making prices similar to FNF types with low mid-break types across all microns again in favour with buyers.

The smallest offering of skirtings for the season thus far (4319 bales, 14.7% of the total selection) had a similar sale to the fleece room where minor movements were the order of the day as most types finished unchanged, but in buyers’ favour in the 18 micron and finer categories under 5% VM. Melbourne performed much better - most lots up by 10 to 20 cents as a noticeable reduction in discounts for shorter, burrier types closed the gap on their better style/low VM lots. Crossbreds rallied on the back of the stable exchange rate and again a small quantity (15%) had all types up to 30 micron post 10 to 25 cent rises as broader microns were up to 5 cents better. Cardings also had a positive sale as both indicators rose by 7 and 18 cents respectively as the Melbourne indicator now above 1100 cents (1106) with Sydney at 1096. Locks had a flat sale as an opening day fall was negated by a rally to see them unchanged as all other types looked to finish the sale 10 cents higher.

At just under 30,000 bales, the 2nd smallest weekly offering for the season, growers may have been looking for a bit more of a rise in the market, especially in the fleece sector. This wasn’t to be as a more cautious buying approach looks to be the order of the day. The A$ barely moved all week, helping exporters not to make any rash decisions to change their buying patterns. What might force them to re-think is quantity or lack of. To this week bales offered nationally are running 9% behind last season (165,720 bales) about 4 selling weeks’ less wool. This reduction in the clip should be ringing alarm bells in China as we hit the final month of this season with 5 sales to go. The 3 centres will be all in action next week but the offering only goes up to 33,400 bales. We sell late on Wednesday to not much change in the market.  GO THE BLUES!!

Ag Concepts Fwd Prices at 27 May 2016

Micron

Date

Low

High

23

21-Sep-16

1320

1320

19

26-Oct-16

1430

1430

19

12-Apr-17

1430

1430

                                                                

                                                                 Main Buyers (This Week)

1

Techwool

4833

2

Fox & Lillie

3316

3

Lempriere (Aust)

2219

4

PJ Morris

2117

5

Chinatex

1844

6

Aust. Merino Exp.

1635

7

Kathaytex Aust.

1352

8

Michell Aust.

930

9

Tianyu Wool

809

                    

Eastern Market Indicators (AUD cents/kg clean)

1297 cents é 6 cents compared with 20/05/2016

Northern Market Indicators (AUD cents/kg clean)

1327 cents é 5 cents compared with 20/05/2016

AUD/USD Currency Exchange

0.7210 é 0.0001  compared with 20/05/2016

20 May 2016

Friday, May 20, 2016

WEEKLY MARKET REPORT

Week Ending 20th May, 2016

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S47/15

This Week

M47/15

Last Sale

S46/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1583

1556

1573

+10

1485

+98

18

1555

1535

1556

-1

1448

+107

19

1505

1498

1511

-6

1391

+114

20

1438

1426

1438

0

1333

+105

21

1404

1399

1413

-9

1307

+97

22

1386n

1377

1387n

-1

1264

+122

26

1090n

1090n

-

-

1018n

+72

28

804

812

798n

+6

895n

-91

30

696n

689

684n

+12

830n

-134

MC

1089

1088

1082

+7

1071

+18

MARKET FLATTENS OUT

 This sale sees us in uncharted territory, almost! This week was the 4th in a row that the wool market has posted gains. The advancements did slow to a crawl - a 4 cent rise to 1291 for the EMI - as sectors other than fleece were the main drivers for the positive movements. In US$ terms the shift was more pronounced: a 14 cent fall to 931, the largest movement either way for 4 weeks, again the wild exchange rate swings the main contributor as the A$ did dip below 72 cents on Thursday (71.85) following the release of  the unemployment figures. As mentioned, fleece types didn’t influence the market’s direction to any degree. Price movements were dictated by the type on offer - 17s and finer were 10 cents dearer with the best style FNF lots now commonly commanding premiums of up to 100 cents above the indicator. All other indicators were unchanged bar 19s (back by 5) and 21s off by 10 cents, now just a hair’s breadth above 1400 cents.

Skirtings followed the pattern set a few weeks ago. All types across the full micron range up to 6%VM added 5 to 10 cents to their weekly values with the small volumes of better style lots again keenly sought after, up to 50 cents higher. Cardings continued to get dearer as the 3 centres’ MCIs are now identical, 1089 in Sydney with the other 2 centres at 1088. All types in this sector were quoted up to 10 cents better. Crossbreds were the sector that helped push the EMI higher. The more favourable exchange rate saw rises up to 15 cents for 25 micron and 28s and broader while 25 to 28s were the best performers in Melbourne jumping 20 to 30 cents.

Once again the exchange rate dictated price movements. The release of the RBA’s board meeting minutes saw the A$ strengthen to mid 72s only to see a downward adjustment after the unemployment figures were made public to under 72 - an 8% fall over the past month. Also on the radar is talk of a definite move on rates in the US soon and maybe 1 or 2 more cuts here before December. The extra quantity making this the largest national catalogue for 5 sales didn’t affect the market. Fleece prices stood up well under the weight of the 5th largest fleece selection for the season - 64% of the total - XBs now making up just 10 % of the whole selection.

Next week will see just the two Eastern seaboard centres in operation as Fremantle has a week off with only 30,000 bales on offer, the smallest since mid August. With South Africa set to go into their mid-year recess and NZ’s supply diminishing, pressure will be on the buying trade to fulfil their commitments as demand outstrips supply. Forecasts are for a good market.

Ag Concepts Fwd Prices at 20 May 2016

Micron

Date

Low

High

21

6-Jul-16

1380

1380

19

13-Jul-16

1450

1450

19

8-Mar-17

1420

1420

 

Main Buyers (This Week)

1

Chinatex

4862

2

Techwool

4597

3

Lempriere (Aust)

3224

4

Fox & Lillie

3048

5

Aust. Merino Exp.

3021

6

PJ Morris

2910

7

Tianyu Wool

2811

8

Kathaytex Aust.

1820

9

Michell Aust.

1566

  

Eastern Market Indicators (AUD cents/kg clean)

1291 cents é 4 cent compared with 13/05/2016

Northern Market Indicators (AUD cents/kg clean)

1322 cents é 4 cents compared with 13/05/2016

AUD/USD Currency Exchange

0.7209 ê 0.0134  compared with 13/05/2016

13 May 2016

Friday, May 13, 2016

WEEKLY MARKET REPORT

Week Ending 13th May, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S46/15

This Week

M46/15

Last Sale

S45/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1573

1563

1557

+16

1486

+87

18

1556

1537

1523

+33

1446

+110

19

1511

1495

1477

+34

1381

+130

20

1438

1425

1433

+5

1329

+109

21

1413

1401

1397

+16

1301

+112

22

1387n

1375n

1379n

+11

1253

+134

26

-

1061n

1033n (M)

+28 (M)

1005n (M)

+56 (M)

28

798n

793

782n

+16

896

-98

30

684n

690n

681n

+3

830

-146

MC

1082

1072

1038

+44

1055

+27

MARKET CONTINUES BUT FOR HOW LONG?

 For the 3rd sale in a row the wool market added more ground, albeit at a slowing pace. The benchmark AWEX EMI rose by 19 cents to 1287, a level that is now 2nd by 17 cents to the seasonal peak set in August (1295). Again in US$ terms the movements were minimal, a fall of just 6 cents to 945 again influenced by the volatility of exchange rates. Momentum was at its peak in the finer microns, <19 finding 25 to 35 cent lifts and up to 50-70 cents better for the <1% VM, 70% yielding lots in the best topmakers and better style types that are diminishing in volume. 21 to 23s and 19.5 added 10 to 20 cents while 20s had a quiet sale (up by 5 cents) discounts again shrinking for tender, colour, cott and VM.

Room 2 types performed just as well, if not better, in some sectors. Skirtings moved ahead with VM levels dictating the degree of price gains. As is the case with the fleece types smaller volumes of low VM types <3% caught most of the buyers’ attention, dearer by 35 to 40 cents as the broader and burrier lots were quoted 10 to 20 higher. Cardings continued their recovery in rapid fashion this week as a big jump of 40 to 50 cents for all types: emphasis on the scouring lots rather than the carbonising types, again VM playing its part in price determination, these rises had it as the best performer of any sector. It has been a remarkable fightback since the 60 cent loss 3 sales ago now clawing back all those losses and then some. Crossbreds also benefitted from renewed competition as finer types under 26 micron saw gains of 30 to 40 cents, 28s rose 10 to 15 while broader lots were in sellers’ favour. A big reduction in quantity would also be helping as volumes have dropped to 10% to 15% on the east coast in this sector, half of what they were pre Easter.

Again, the dominant factor in the market’s dearer trend was the exchange rate volatility: in local terms a 2.2% positive move, the wool market reacting with a more subdued 1.5% gain. Another hefty fall of almost 2 cents to 73.15 on Wednesday was enough to see buyers continue their strategies of the past few sales. The relative stability in US$ terms over the past month (939 to 959) has helped the market, the swing much larger for the AWEX Indicator, 1217 to 1287 cents. As mentioned earlier the low VM types are coming under heavy scrutiny as volumes fall. The increase in burr has been more so this year due to a big clover season last winter. For all fleece wool offered this week (21,000 bales) 24% was over 2% VM - a 2 year high. 

With the increase in prices, so does the quantity on offer. Next week’s volume has grown 13% to 41,500 but this should not hinder demand or trigger a price correction, the key player will again be the exchange rate.

                                            Ag Concepts Fwd Prices at 13 May 2016

Micron

Date

Low

High

21

13-Jul-16

1355

1355

21

26-Oct-16

1330

1330

19

25-01-17

1405

1405

 

Main Buyers (This Week)

1

Techwool

4711

2

Chinatex

4035

3

Lempriere (Aust)

3162

4

Fox & Lillie

2723

5

Aust. Merino Exp.

2676

6

PJ Morris

2106

7

Modiano (Aust)

1945

8

Tianyu Wool

1574

9

Kathaytex Aust.

1365

 

Eastern Market Indicators (AUD cents/kg clean)

1287 cents é 19 cent compared with 6/05/2016

Northern Market Indicators (AUD cents/kg clean)

1318 cents é 21 cents compared with 6/05/2016

AUD/USD Currency Exchange

0.7343 ê 0.0159  compared with 6/05/2016

6 May 2016

Friday, May 06, 2016

WEEKLY MARKET REPORT

Week Ending 6th May, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/15

This Week

M45/15

Last Sale

S44/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1557

1543

1523

+34

1503

+54

18

1523

1515

1482

+41

1453

+70

19

1477

1463

1431

+46

1408

+69

20

1433

1410

1391

+42

1348

+85

21

1397

1384

1367

+30

1323

+64

22

1379n

1363

1335n

+41

1274

+105

26

1039n

1033n

1021n

+18

1006

+33

28

782n

782

772n

+10

886

-104

30

681n

682

669n

+12

826

-145

MC

1038

1057

1013

+25

1036

+2

MARKET HITS ANOTHER PEAK!

 The change in sentiment last sale that saw the market claw back some of the big losses of 3 weeks ago continued this week as buying patterns became a little more urgent, especially on the opening day. The market rose by another 27 cents to 1268, just 2 cents shy of the latest peak of 1270 set after Easter. In US$ terms the movement was minimal - only a 5 cent increase to 951 cents. The driving factor, of course, was the collapse of the A$, at one point above 78 cents last week to 74.50 on Wednesday.

The market opened with a bang on Wednesday and consolidated these rises on the final day with a subdued increase in most fleece categories. All micron indicators recorded solid gains (30 to 50 cents with the odd finer lot in the best top-maker and superior types 50 to 70 cents higher) as these types have virtually run out till the spring. At the other end of the spectrum some of the heavier burr types >4% VM looked to have marked time to be unchanged. It was interesting to note that 21s, after hitting 1400 cents on Wednesday, couldn’t maintain this level slipping by 3 cents to 1397 - the only indicator to fall on Thursday.

Room 2 types followed the fleece room’s lead as all types gained ground. Fine types <19 micron with <5% VM posted rises of 50 to 60 cents, while burrier lots were 40 to 50 cents up as broader lots >19 micron gained 30 to 40 cents. Cardings also clawed back some of the big losses of a fortnight ago as the MCI put on 25 cents with all types adding 20 to 30 cents to their values. Crossbreds also had a solid sale with all microns from 25 to 32 lifting by 10 to 25 cents.

The tight supply, reasonable demand and the weaker AU$ all combined to lift the market. The decision by the RBA to drop interest rates to a record low of 1.75% following on from the release of poor inflation numbers last week was the catalyst for the fall in the exchange rate of 2.35% - the biggest one day fall in almost 5 years. Some experts are forecasting a return to high 70s for the AU$ and maybe to break through the 80 cent mark next year as the local economy improves and commodity prices continue to rally and a peak in the US$ helps the AU$ over time but  we could still see some downside in the A$ before this happens. The budget, though not outstanding, also helped the currency stay stagnant on Wednesday as most commentators described it as “in a safe pair of hands” without any real shocks as spending growth is controlled and measures to chip away at the deficit and raise revenue such as reining in welfare cheats, a higher tax on tobacco, multinationals avoiding tax and the wealthy using superannuation to park money in a low tax environment.

The coming few sales will be critical as to where the market might head in the short term. Currency fluctuations will be a major player in determining price direction. Quantity won’t be as influential as national quantities will average low to mid 30,000 bales. We sell late next Thursday with an 800 bale catalogue with most players looking for the market to consolidate at these levels, buyers reluctant to keep 21s above 1400 cents.

This week marks 5 years since we held our 1st sale. A quick look back had the EMI at 1294, 17s were 2368, 19s 1586 and 21s 1266. The MCI was 780 cents and the exchange rate was AU$1 bought US$1.08. Things just a little different now!!

Main Buyers (This Week)

1

Techwool

5296

2

Chinatex

3533

3

Fox & Lillie

2488

4

Lempriere (Aust)

2460

5

Aust. Merino Exp.

1983

6

Tianyu Wool

1749

7

Global Wool Exp.

1612

8

Modiano (Aust)

1508

9

Kathaytex Aust.

1455

  

Eastern Market Indicators (AUD cents/kg clean)

1268 cents é 27 cent compared with 29/04/2016

Northern Market Indicators (AUD cents/kg clean)

1297 cents é 35 cents compared with 29/04/2016

AUD/USD Currency Exchange

0.7502 ê 0.0119  compared with 29/04/2016