Weekly Market Reports


15 July 2016

Friday, July 15, 2016

WEEKLY MARKET REPORT

Week Ending 15th July, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S02/16

This Week

M02/16

Last Sale

S01/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1577

1558

1579

-2

1488n

+89

18

1543

1542

1554

-11

1438

+105

19

1501

1495

1516

-15

1345

+156

20

1479

1482

1503

-24

1303

+176

21

1469

1472

1492

-23

1298

+171

22

1456n

1450

1469n

-13

1285n

+171

26

1103n

1125n

1072n

+31

1055n

+48

28

755

754

755

0

883

-128

30

636

632

650

-14

795

-159

MC

1084

1075

1088

-4

1005

+79

MARKET RUNS OUT OF PUFF!

This week’s sale, the final before the annual 3 week winter recess, saw the market soften on both days to see the benchmark AWEX EMI slip by 9 cents to 1311. The momentum that had stretched over the past 8 selling days - 4 sales - was stopped in its tracks by the climbing exchange rate. The A$ went on a bit of a run to peak at 76.5 cents on Tuesday night from below 74.4 only a week before. In US$ terms the market added 5 cents to 998, just 2 cents shy of  the magical 1000 cent mark. This point is now a 12 month high - a 33% increase in price from the low point of October 2015. Adding pressure to the market was the spike in volumes, up by 25% in the space of 4 days, taking the urgency out of most exporters buying patterns with this being most evident from the Chinese indent buyers and allowing forward sellers and other destination users to operate more freely on the slightly better selection than what has been offered over the past month. Falls were varied as 18 to 19s and 22 and broader lost 10 to 15 cents with 19.5 to 21 micron taking the brunt of the falls giving up 20 to 25 cents. The finer types escaped virtually unscathed, 17-17.5s just in buyers’ favour with finer microns adding up to 10 cents. As has been the case for some time the better style finer lots are still commanding up to 100 cent premiums with the odd lot of 2% VM making a FNF price. Growers in Fremantle were unimpressed with the market falling just 5 to 10 cents as 25% of their fleece was passed-in on Wednesday!!

Skirtings bucked the fleece room trend as good competition pushed all types and descriptions 10 to 20 cents higher - some lots more as the superior style finer micron types <3% VM came under increased buyer scrutiny to post gains of up to 50 cents. Crossbreds couldn’t seem to make their mind up as to which way to go. 25 and 26 microns were the best performers of the sale climbing 30 to 50 cents, 28s were unchanged although we had 1 lot of 28 micron fleece make 31 cents better than the indicator with 4.5% VM!! The broader microns >30 lost around 15 cents. Cardings gave up last sale’s gains to fall by 4 cents - locks being the culprit, 5 cents cheaper.

The strong finish in Fremantle was just the tonic the market needed as we head into the recess. Their indicators are ahead of the East coast for 19 to 23. Had it not been for the exchange rate the market could well have finished in the positive as buyers were reporting keen enquiry till the very last lots sold and still a few sniffing around today for wool to finish off orders.

The record-breaking S & P 500 drove not only the US$ but most global currencies higher except for the Chinese Yuan now at 6 year lows against the greenback.  Also helping the US$ was the far better job figures from America, over 100,000 more jobs created in June than anticipated. This run on exchange rates was the catalyst for the softer wool market but still underlying solid demand should see the market resume on a good note despite rumours of a 50,000+ bale catalogue.

Ag Concepts Fwd Prices at 15 July 2016

Micron

Date

Low

High

19

10-Aug-16

1495

1495

21

21-Sep-16

1400

1400

21

23-Nov-16

1350

1350

 

Main Buyers (This Week) 

1

Techwool

5439

2

Aust. Merino Exp

4068

3

Lempriere (Aust)

3907

4

Fox & Lillie

3062

5

PJ Morris

2965

6

Chinatex

2737

7

Modiano

2106

8

Kathaytex Aust.

1980

9

Michell Aust.

1452

 

Eastern Market Indicators (AUD cents/kg clean)

1311 cents ê 9 cent compared with 08/07/2016

Northern Market Indicators (AUD cents/kg clean)

1333 cents ê 8 cents compared with 08/07/2016

AUD/USD Currency Exchange

0.7616 é 0.0092  compared with 08/07/2016

8 July 2016

Friday, July 08, 2016

WEEKLY MARKET REPORT

Week Ending 8th July, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S01/16

This Week

M01/16

Last Sale

S53/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1579

1563

1548

+31

1498n

+81

18

1554

1545

1516

+38

1438

+116

19

1516

1520

1481

+35

1356

+160

20

1503

1503

1462

+41

1317

+186

21

1492

1493

1449

+43

1313

+179

22

1469n

1466

1428n

+41

1293n

+176

26

1072n

1098n

1104n (M)

-6 (M)

1063n (M)

+35

28

755

753

779n

-24

894n

-139

30

650

644n

678n

-28

795n

-145

MC

1088

1080

1084

+4

1036

+52

SEASON OPENS WITH A BANG!

The opening sale of the new season started with a bang as solid rises over both selling days saw the benchmark AWEX EMI smash through the 1300 cents mark to finish the sale at 1320 (a 23 cent rise for the week), up 1.77% - the best start to a selling season in 11 years. In US$ terms the rise was 28 cents to 993, the biggest move in any direction since September. This is the 4th week of rallies that has pushed the EMI to a 12 month high. The increase in prices was across the board, 25 to 45 cents for 16.5s out to 23 micron. At 1492 cents 21s are closing in on the 1500 cent mark where they spent just 1 day above this point in June, 2015, and before that for a brief period in the winter of 2011 - certainly in rarified air!! The all time record for 21 micron was in 1988 at 1682. We had a 21 micron fleece lot from Walgett make 1511 with 3 other lots from the same grower (20 micron types, slightly tender) make in the 1520 cent range yesterday.. The better style finer FNF types added 40 to 50 cents to their values. Growers warmed to the new level of prices as 98.6% was cleared to the trade across the 3 centres as just 346 bales were passed-in from 24,777 in the fleece sector.

Skirtings took their lead from the fleece room as the initial rises were maintained through to the end of the sale. The low VM types <5% added 5 to 10 cents where the heavier VM lots >5% were most sought after by the trade climbing 20 to 30 cents. The rise in the exchange rate when we sold was the catalyst for the crossbred sector to lose more ground (the 6th sale in a row) as most indicators gave up 20 to 30 cents. Cardings had a quiet sale as the 3 centres were just in sellers’ favour in this sector, all MCIs up by 5 cents as locks gained 5 to 10 cents while other types were unchanged.

The largest national offering in 7 weeks (39,000 bales) and the currency fluctuations of about 1 cent failed to adversely affect the market, the opposite in fact. The bigger volume this sale and next week’s similar size offering are due to some growers holding wool back till the new financial year ticks over. In what must be a first for a very long time, not a single bale was withdrawn from the 13,700 bales offered in Sydney. In fact, withdrawn lots across the 3 centres accounted for only 0.8% (365 bales) from 39,152 offered.  

Outside factors looked to have no bearing on the market. Widespread enquiry for new business from China and India and, to a lesser extent, Europe was the catalyst for the market’s upward trend. As news came through that next week’s rostered quantities had ballooned out to 40,000 from 33,000 last Friday there was a slight pull back in bidding late yesterday but not enough to temper the current mindset of buyers still keen to book up wool this morning. Activity was busy on the futures front as over 200 tonnes was forward sold out to April 2018 by both companies that look after this type of transaction. We locked in about 20 tonne out to September. We sell late next Wednesday with 1,600 bales on offer to a solid market from all accounts.

Ag Concepts Fwd Prices at 8 July 2016

Micron

Date

Low

High

21

24-Aug-16

1400

1450

21

26-Oct-16

1350

1350

19

11-Jan-17

1430

1430

19

12-Apr-17

1435

1435

 

Main Buyers (This Week)

1

Techwool

6421

2

Chinatex

4303

3

Fox & Lillie

3230

4

Lempriere (Aust)

3223

5

PJ Morris

3050

6

Kathaytex Aust.

2555

7

Modiano

1583

8

Tianyu Wool

1280

9

Aust. Merino Exp

1037

  

Eastern Market Indicators (AUD cents/kg clean)

1320 cents é 23 cent compared with 01/07/2016

Northern Market Indicators (AUD cents/kg clean)

1341 cents é 24 cents compared with 01/07/2016

AUD/USD Currency Exchange

0.7524 é 0.0085  compared with 01/07/2016

1 July 2016

Friday, July 01, 2016

WEEKLY MARKET REPORT

Week Ending 1st July, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S53/15

This Week

M53/15

Last Sale

S52/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1548

1527n

1532

+16

1530

+18

18

1516

1512

1505

+11

1462

+54

19

1481

1478

1471

+10

1393

+88

20

1462

1458

1435

+27

1352

+110

21

1449

1444

1423

+26

1338

+111

22

1428n

1431n

1402n

+26

1301n

+127

26

-

1104n

1091n (M)

+13 (M)

1110n (M)

-6

28

779n

774

784n

-5

924

-145

30

678n

669n

686n

-8

826

-148

MC

1084

1076n

1079

+5

1096

-12

EUROPE SAYS “SO LONG” TO BRITAIN ANYWAY

 The final sale of the season, S53?? brought good results for growers despite the turmoil and global market chaos the Poms caused by their “Brexit” vote in the positive 52/48% last Friday. The market moved upwards by 12 cents to have the EMI finish at 1297cents, a near season high as only 2 weeks have been higher over the past 12 months. When converted to US$ terms, the fall in the exchange rate saw a 2 cent fall to 965 cents. This sale followed the pattern of the previous 2 sales with the medium/broader types leading the way with 19.5 to 23 micron up by 20 to 30 cents. The finer types did also claw back all of last sale’s losses lifting by 10 to 15 cents with the superior lots again up by 50+ cents or better. This week’s rise has seen 19.5 and broader recapture all the losses of early June (when currency shifts saw the market lose 20 to 45 cents) to be up to 40 cents higher with finer types still 20 to 40 cents shy of their early June peaks.

Skirtings also enjoyed renewed buyer competition as most types and descriptions added 10 to 15 cents, bar the carbonising types (>15% VM) that were somewhat irregular. Cardings reversed last week’s losses as prices lifted by 5 to 15 cents for all types in this sector. Crossbreds had a mixed sale as finer microns <26 were 10 to 15 cents better as broader lots gave up 10 cents from last sale.

The wool market withstood the negativity of the Brexit vote as financial markets and currencies settled down following global markets’ meltdown last Friday as the A$ moved from 73.10 to 76.50 cents. Despite global market’s reaction to the vote, the fundamentals of supply and demand and exchange rates still dictate price variation above all outside influences. The closing level of 1297 cents - the second highest on record - is just 7 cents shy of the 1304 cent peak of mid August and well above the low point of 1169 in mid October. This sale was the smallest 3 centre sale since August (28,800) bringing the yearly total to 1.819m bales offered (down by 8% from last season), 1.972m bales, which was about the same amount increased from the previous season of 1.835m bales, volumes up and down in the one spot, you might say.

The top buyer for the season was Techwool Trading with 223,000 bales, 13% of the national total as the top 10 buyers secured 71% of the overall total. Lempriere was in 4th place with 125,000, Adelaide based Michell bought 64,000 and noted superfine buyer, New England Wool, 32,000 to be No. 16 on the list.

This week sees the start of the new selling season with a combined 3 centre total of 37,000 bales. A strong start to the season is expected barring any financial upheavals over the weekend or wild moves of exchange rates. Lack of quantity will help the market as the 3 week winter recess looms following Sale 2. We open proceedings on Thursday with an 850 bale catalogue. 

Ag Concepts Fwd Prices at 1 July 2016

Micron

Date

Low

High

21

10-Aug-16

1400

1400

19

26-Oct-16

1400

1400

21

26-Apr-17

1300

1300

 

Main Buyers (This Week)

1

Techwool

4070

2

Aust. Merino Exp

3000

3

Fox & Lillie

2750

4

Lempriere (Aust)

2537

5

PJ Morris

2207

6

Modiano

1452

7

Kathaytex Aust.

1412

8

Tianyu Wool

854

9

Michell Aust.

847

  

Eastern Market Indicators (AUD cents/kg clean)

1297 cents é 12 cent compared with 24/06/2016

Northern Market Indicators (AUD cents/kg clean)

1317 cents é 14 cents compared with 24/06/2016

AUD/USD Currency Exchange

0.7439 ê 0.0082  compared with 24/06/2016