Weekly Market Reports


31 March 2017

Friday, March 31, 2017

WEEKLY MARKET REPORT

Week Ending 31st March, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/16

This Week

M38/16

Last Sale

S37/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2290

2314n

2411

-121

1515

+775

18

2153

2153

2242

-89

1458

+695

19

1873

1897

1945

-72

1405

+468

20

1535

1558

1620

-85

1365

+170

21

1414

1413

1484

-70

1348

+66

22

1328n

1337

1401n

-73

1333n

-5

26

1005

1016n

1015

-10

976n

+29

28

740

720

745

-5

811n

-71

30

575

578

575

0

695n

-120

MC

1223n

1211n

1227

-4

1091

+132

THE CORRECTION FINALLY CAME!

The softer market in Fremantle last Thursday certainly was a precursor to this week’s sale. The market came back to earth with a thud. Nothing was immune from the correction that we had feared was coming but no-one could pinpoint exactly when. Just as we have seen some big gains over the past 8 sales the losses were heavy: super-fine microns <17 collapsed by +120 cents while other microns out to 22 gave up 70 to 90 cents. This equated to a fall of 44 cents for the AWEX EMI to 1502 (the biggest weekly fall in almost 2 years) while in $US terms the market peeled off by 33 cents to 1151. The better style/spec types <19 micron were virtually unchanged on last sale's quotes while burrier fleece lots took a massive hit up to 100/150 cents cheaper than last week.

Skirtings also took the full force of the buyer pull-back as low VM (<5%), 19 micron and coarser lost 10/20 while the off types with heavy burr and cot and jowl as much as 80 cents off the pace. The superfine (<18 micron with less than 5% VM) lots actually moved ahead in price. Cardings had a quiet sale as a slight fall in CRT and STN of about 10 cents saw the MCI in Sydney drift by only 4 cents. Crossbreds also looked to escape the big carnage of the merino fleece and skirting sector as losses were restricted to a maximum of 10 cents.

After weeks and weeks of a rising market, ever-increasing levels of VM and some difficulty in securing finance, the market succumbed to these 3 factors. Since the market started on its run in early February the gain was 134 cents as against this week’s 44 cent correction.  Medium microns (20 to 23s) are on a similar level to then. Finer than this the difference is 50 to 350 cents to the good, underlying the strength and demand of the fine wool sector.  The size of this week’s fall took all participants by surprise. Growers did put up some resistance to the wind-back in price, the pass-in rate double previous sales, 20% of fleece passed-in in Sydney and 30% in Fremantle. Demand for prompt shipment looks to have been met for the time being as manufactures finally baulked at these new price levels and stopped booking forward contracts. Also on the radar was how quickly volumes can increase by 10/20% from “final figures” on a Friday to rostered volumes the following Thursday, this also easing buying pressure. Many local exporters and mills overseas had expected prices to be maintained through to Easter.  The big national offering of 49,000 bales may again see buyers under no pressure to “buy at best”, as they had sometimes done recently.

 

                                                                                                                                                                                                                                                                                                Ag Concepts Fwd Prices at 31 March 2017

Micron

Date

Low

High

21

24-May-17

1420

1420

21

23-Aug-17

1400

1400

19

13-Sep-17

1735

1750

19

25-Aug-17

1700

1700

 

Main Buyers (This Week) 

 

1

Techwool

5673

2

Fox & Lillie

3636

3

Lempriere

3170

4

PJ Morris

2494

5

Aust Merino Exp.

2500

6

Michell Aust.

2179

7

Chinatex

2107

8

West Coast Wool

1538

9

Modiano

984

 

Eastern Market Indicators (AUD cents/kg clean)

1502 cents ê 44 cents compared with 24/03//2017

Northern Market Indicators (AUD cents/kg clean)

1587 cents ê 54 cents compared with 24/03/2017

AUD/USD Currency Exchange

0.7661 é 0.0004  compared with 24/03/2017

24 March 2017

Friday, March 24, 2017

WEEKLY MARKET REPORT

Week Ending 24th March, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/16

This Week

M38/16

Last Sale

S37/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2411

2337n

2318

+93

1506

+905

18

2242

2212n

2235

+7

1450

+792

19

1945

1962n

1944

+1

1382

+557

20

1620

1623n

1638

-18

1331

+289

21

1484

1481n

1509

-25

1328

+156

22

1401n

1409n

1431n

-30

1318n

+89

26

1015

1036n

1015

0

977n

+38

28

745

736n

756

-11

824n

-79

30

575

583n

581

-6

699n

-124

MC

1227

1225n

1234n

-7

1080

+147


GOOD RAIN AND GOOD PRICES FOR SOME

The market was fully tested this week as up and down movements of various microns saw the EMI finish unchanged at 1546. In $US terms the shift was just 4 cents down to 1184 as the $A lost a bit of ground over the week to sit at 76.5 cents this morning. The big anticipated offering of 51,000 bales didn’t eventuate as 49,000 bales were offered - still the largest weekly selection since mid January. Fine types again led the charge as <17 micron rose 100 to 150 cents. 17.5 to 18.5s looked only 10 cents better while 19/19.5 were unchanged as the medium microns and coarser (20 to 22s) looked to have peaked to back off by 20 to 30 cents. The 1500 cent mark looks to be a barrier for 21s at the moment as it has broken through that price only 4 times over the past few weeks only to drop below it.

Skirtings followed a similar pattern of price movement as that of the fleece types. Finer than 17 micron that had less than 5% VM shot up by 70 to 100 cents with 18/19 microns adding 10 to 20 cents with coarser, burrier types back by a similar amount. Crossbreds also had an up and down sale as finer lots <26 micron were solid to 10 cents higher while 28s and broader slipped 5/10 cents. Cardings also seemed to take a breather from their meteoric rises over the past month as regional MCIs remained unchanged in the west and south while Sydney’s indicator lost 7 cents as locks and stains were quoted 10 cents off.

The rising market since Christmas has presented funding issues for buyers. Before the rise, finances were based on $1700/bale. Now it’s more like $2300/bale. Buyers can’t sit on big levels of stock. The liquidity of the market and ease of moving wool means what is bought today is usually offered and sold overnight to mills.

The surge of the super-fine types continues on almost unabated as the gap between them and the medium types widens. As we can see 21s are failing to stay above 1500 cents with price resistance and high levels of burr the main sticking points but, as we have seen in the past, there was resistance when 1200, 1300 and 1400 cents were on the radar for 21s, now just a distant milestone. The extra volume this week did allow buyers to be more selective led by Chinese indent buyers as the better style, finer types seem immune from any price resistance. Don’t forget Bred Well Fed Well workshops starting Monday at Louth, Tuesday at Brewarrina and Wednesday at Coolah.  46,000 bales are on offer next sale, everyone is holding their breath.

   Ag Concepts Fwd Prices at 24th March 2017

Micron

Date

Low

High

21

24-May-17

1455

1455

19

12-Jul-17

1800

1800

21

11-Oct-17

1390

1390

19

10-Jan-18

1675

1675


Main Buyers (This Week) 

1

Techwool

6350

2

Chinatex

5084

3

Fox & Lillie

4316

4

Tianyu Wool

4015

5

PJ Morris

3601

6

Aust Merino Exp.

3148

7

Lempriere

2543

8

Modiano

1919

9

Michell Aust.

1730

 

Eastern Market Indicators (AUD cents/kg clean)

1546 cents ó 0 cents compared with 17/03//2017

Northern Market Indicators (AUD cents/kg clean)

1641 cents é 5 cents compared with 17/03/2017

AUD/USD Currency Exchange

0.7657 ê 0.0028  compared with 17/03/2017

10 March 2017

Thursday, March 23, 2017

WEEKLY MARKET REPORT

Week Ending 10th March, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S36/16

This Week

M36/16

Last Sale

S35/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2235

2202

2219

+16

1503n

+732

18

2143

2135

2117

+26

1446

+697

19

1902

1910

1899

+3

1372

+530

20

1638

1619

1628

+10

1333

+305

21

1501

1499

1494

+7

1333

+168

22

1439n

1425

1431n

+8

1315n

+124

26

1003

994n

1004

-1

971n

+32

28

756

753

745

+11

830

-74

30

583

591n

574

+9

703

-120

MC

1231n

1222n

1214

+17

1077

+154

AWI is jumping for joy!

Another big week for the wool market and another record breaking week for the EMI pushing further into unchartered waters. With over 5000 extra bales offered this week demand continued to push indicators higher with the exception of 21 and 22 as increased volumes of these traditional types allow buyers to ease back. Apart from woolgrowers being the winners over the past month or so it is AWI which is also cheering it on. The dollar value of wool sold this week was $73.3m which at 2% wool tax equates to close to $1.5m for the week into their coffers. As you might have read in last weeks Land newspaper, AWI were recently grilled over their spending by govt senate estimates, in particular severance payouts and offices in prime locations. Chairman Wal Merriman suggested it was better than operating out of a “tin shed” in Dubbo. Given he officially opened this tin shed five years ago I can only presume he has some other tin shed in mind! The government is a co-funder of AWI along with the wool grower, and we think it’s a good thing their spending is put under scrutiny. We’ve seen what’s happened in the past when institutions become flush with funds and growers need assurances their money is spent wisely.

Following a similar trend to recent weeks most of the action was sub 19.5 micron and particularly low vm wools. What isn’t reflected in the market reports was the increased discount for high vm, particularly over 4%. It was very noticeable in our catalogue with hardly a line of fleece wool under 3% that buyers would struggle trying to average orders even those at 4%. This apparently was the case as the 4% to 5% lines made the same money as the 7% lines, which was about 20 cents cheaper compared to the previous week. Skirtings and oddments continued to sell well although burr levels are quite high, seed levels aren’t too bad. Similar to the fleece sector strong gains were only seen in the low vm fine types with 18 micron 3% vm pieces making over 1300 cents greasy! Cardings again continued on their merry way as all three centres again posted strong gains with Fremantle leading the way closing at 1251. It wasn’t that long ago when the carding indicator at 1000 cents was a big milestone.

Crossbred wool had a reasonably good week subject to what sort of wool it was. Buyers were very choosy and some microns, mostly broader than 29 were as flat as a tack whilst the fine XB’s were very strong.

Macwool in conjunction with MLA and AWI will be hosting three Bred Well Fed Well workshops in Louth, Brewarrina and Coolah on March 27, 28 & 29 respectively. With sheep and wool prices where they are, there has never been a better time to see how you can squeeze a bit more out of your operation. If you have never been to one you owe it to yourself to come along. RSVP’s close March 23 please email kate@macrural.com.au for Louth and Bre or Sharon at admin@macwool.com.au for Coolah. Three centres will offer 44,000 bales next week.

 

Ag Concepts Fwd Prices at 10th March 2017

Micron

Date

Low

High

Micron

Date

Low

High

21

29-Mar-17

1470

1472

19

13-Sept-17

1680

1705

19

3-May-17

1700

1700

19

14-Feb-18

1630

1630

21

12-Jul-17

1400

1405

19

12-Sept-18

1610

1610

 

Main Buyers (This Week)

 

1

Techwool

8101

2

Fox & Lillie

5386

3

Chinatex

4615

4

PJ Morris

2360

5

Michell Aust.

1197

6

Kathaytex

1081

7

Tianyu Wool

965

8

Modiano

963

9

Aust Merino Exp.

656

  

Eastern Market Indicators (AUD cents/kg clean)

1522 cents é 7 cents compared with 8/032//2017

Northern Market Indicators (AUD cents/kg clean)

1605 cents é 23 cents compared with 2/03/2017

AUD/USD Currency Exchange

0.760 ê 0.0009  compared with 7/03/2017

 

 

 

 

 

17 March 2017

Friday, March 17, 2017

WEEKLY MARKET REPORT

Week Ending 17th March, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S37/16

This Week

M37/16

Last Sale

S36/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2318

2284n

2235

+83

1503n

+815

18

2235

2211

2143

+92

1446

+789

19

1944

1962

1902

+42

1372

+572

20

1638

1630

1638

0

1333

+305

21

1509

1503

1501

+8

1333

+176

22

1431n

1422n

1439n

-8

1315n

+116

26

1015

1023

1003

+12

971n

+44

28

756

748

756

0

830

-74

30

581

589

583

-2

703

-122

MC

1234n

1225

1231n

+3

1077

+157

Where to now?

The market took yet another step into unchartered waters as a similar pattern of weekly rises has now been in place for the past month. The EMI added another 24 cents to its value, now at 1546. The market defied the bounce back in the $US, now back to the high 76 to low 77 cent mark after falling below 75 cents 3 weeks ago. No more evidence of this when looking at the rise in the market in $US terms, up by 43 cents to 1188. Once again the price hike was led by 18.5 microns and finer, 75 to 115 cents to the good while 19s climbed 40 cents and 19.5 to 21s gaining up to 10 cents and 22s back by a similar amount. Just 114 bales of fleece were passed-in in Sydney, clearing 98%.

Skirtings also benefitted from keen competition as the majority of the selection on offer (under 19 micron and <3% VM) sky-rocketed by 70 to 100 cents. The broader and burrier types >5% VM were quoted up by 30/40 cents. Cardings had a steadier sale with both centres on the eastern seaboard adding just 3 cents while the over-heated carding market in Fremantle came back to levels of the east coast (back by 15 cents). All 3 centres are now within 10 cents of each other - 1225 to 1235. Crossbreds also looked to take a breather after their 5 week rally. Finer types (up to 26 micron) and 32s put on another 10 cents while 28/30 microns were unchanged.

The unbroken rise in the market now extends 7 weeks, back to early February, the EMI climbing 124 cents as demand far outstrips supply even with wool production about 3% higher than last season and 6% more first-hand wool being offered so far this season as brokers report very low stocks of growers holding onto wool - Sale 99 wool as we call it - as they cash in on the new price levels. Growing demand for merino has in fact been building for years. The growing use of wool against the skin in sports and outdoor wear exploded to be the main driver of renewed demand. The improved diversity of products derived from wool is also a key factor as business conditions improve and consumers become more discerning in their spending.

Last week I took umbrage over Wal Merriman’s comments about tin sheds and Dubbo and it was pleasing to see our report is more widely read than we thought. The history of “tin shedders” goes back 25 years when it was used by “the establishment” to refer to us as being somewhat of a lower standard. Wal Merriman has contacted me this week concerned that growers may get the wrong message regarding the issue of office relocations and redundancies and AWI’s actions. I was not casting an opinion or being critical of their actions, just taking offence as to why a tin shed in Dubbo would be the first thing to pop into his head when asked to respond to senate estimates. Mr Merriman has assured me that these decisions, particularly the redundancies, will save AWI substantial amounts over the next few years. I did say that scrutiny of how grower’s levies are spent should be a good thing, and I stand by that. A larger offering next week will be a good test of market strength.

Ag Concepts Fwd Prices at 17th March 2017

Micron

Date

Low

High

21

12-Apr-17

1485

1485

19

23-Aug-17

1750

1750

19

25-Oct-17

1695

1700

 

Main Buyers (This Week) 

 

1

Techwool

5916

2

Fox & Lillie

4640

3

Lempriere

3897

4

Chinatex

3471

5

Aust Merino Exp.

3239

6

PJ Morris

2228

7

Tianyu Wool

2227

8

Michell Aust.

1955

9

Modiano

1593

  

Eastern Market Indicators (AUD cents/kg clean)

1546 cents é 24 cents compared with 10/03//2017

Northern Market Indicators (AUD cents/kg clean)

1636 cents é 31 cents compared with 10/03/2017

AUD/USD Currency Exchange

0.7685 é 0.0161  compared with 10/03/2017

3 March 2017

Friday, March 03, 2017

WEEKLY MARKET REPORT

Week Ending 3rd March, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S35/16

This Week

M35/16

Last Sale

S34/16

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2182

2133n

2093

+89

1575

+607

18

2101

2082

2017

+84

1508

+593

19

1880

1875

1806

+74

1421

+459

20

1617

1608

1562n

+55

1378

+239

21

1508

1504

1442n

+66

1378

+130

22

1443n

1438n

-

+62 (M)

1370 (M)

+68 (M)

26

974

955n

933n

+41

974n

0

28

733

736

704

+29

830

-97

30

574

579

546n

+28

719

-145

MC

1202n

1215n

1190

+12

1108

+94

Round it up!

Was it driven by a smaller offering or was it demand driven? Well it looks like a bit of both as 40,626 bales offered were mostly snapped up in a two day frenzy as the EMI rounded up late on Thursday to sit at exactly 1500 cents. When was the last time the EMI was at 1500? Well I can’t find where it has been this high. The EMI has risen 7 of the 8 selling weeks since Christmas and the micron price guides from 18.5 to 20 are at all time highs since AWEX took over market reporting in 1995. The nearest comparison without going all the way back to 1988 was 2011 and it’s only 17.5 and finer which were higher then. 19 microns presently sit 130 cents higher than June, 2011 and merino cardings now over 1200 cents in all three centres are close to 400 cents above June, 2011 levels. Macwool sold late on Thursday with 66% of merino fleece lots fetching above 1000 cents greasy and a top price of 1612 cents for 17.8 micron!

All sectors of the market received a boost this week with particular strength in the better type fine wools which typically dwindle in volume from now on. This week was the last designated fine wool sale for the season so there was a bit of a squeeze on these types but it was more likely an increase in demand for the broader and burry types which saw the other sectors follow. The latest data from AWTA show year to date a slight increase in wool volume of 3.3% by weight reflecting the increase in wool cut after a good winter. Some of the increase in weight is also vegetable matter as an AWEX report released today shows about 0.5% increase in average VM levels in fleece/piece/bellies.

The forward market saw quite a bit of activity this week but all mostly near months out as far as June and at levels ranging from 1430 to 1465 for 21 microns - in other words, at last week’s levels (which isn’t too bad considering long term averages). The real message in this activity is that the buyers of these contracts are confident the market won’t fall much when it does, as we know it will.

So where to from here? It’s still early in the season and there is at least another 8 weeks of selling before the offering in the south and west typically ease off. It is pretty certain that the healthy premiums for finer micron will be around for some time. Our concern of recent weeks was that 20 micron and coarser (particularly burry types) would, at best, flat line or falter. That fear was dispelled this week well and truly. The key thing over the coming months is to avoid excessive seed in fleece lines and, where possible, segregate heavy burr from moderate burr.

Next week a larger offering of 47,500 bales will be offered in three centres. 

Ag Concepts Fwd Prices at 3 March 2017

Micron

Date

Low

High

Micron

Date

Low

High

21

29-Mar-17

1470

1472

19

13-Sept-17

1680

1705

19

3-May-17

1700

1700

19

14-Feb-18

1630

1630

21

12-Jul-17

1400

1405

19

12-Sept-18

1610

1610

 

Main Buyers (This Week)

1

Techwool

6936

2

Fox & Lillie

5145

3

Tianyu Wool

2906

4

PJ Morris

2412

5

Chinatex

2247

6

Aust Merino Exp.

2220

7

Lempriere

2059

8

Michell Aust.

1965

9

Modiano

1915

 

 

Eastern Market Indicators (AUD cents/kg clean)

1500 cents é 51 cents compared with 24/02//2017

Northern Market Indicators (AUD cents/kg clean)

1582 cents é 52 cents compared with 24/02/2017

AUD/USD Currency Exchange

0.7656 ê 0.0036  compared with 24/02/2017