Weekly Market Reports


26 May 2017

Friday, May 26, 2017

WEEKLY MARKET REPORT

Week Ending 26th May, 2017

AWEX Northern Micron Indices Comparison 

AWEX INDEX

This Week

S47/16

This Week

M47/16

Last Sale

S46/16

Sydney

Change

Last Year

Sydney(Wk48)

Sydney Yearly

Change

17

2265

2217n

2354

-89

1583

+682

18

2148

2102

2219

-71

1557

+591

19

1891

1872

1942

-51

1509

+382

20

1590

1577

1628

-38

1441

+149

21

1477

1477

1499

-22

1404

+73

22

1419n

1415n

1441n

-22

1386n

+33

26

1045n

1065n

1049

-4

1098n

-53

28

755n

749n

763

-8

826

-71

30

563n

566n

570

-7

715n

-152

MC

1180n

1201n

1176

+4

1096

+84

BUYERS LET MARKET DRIFT!

The 3 separate markets did re-align themselves but the shift in prices went against growers. Consistent falls across both days in all centres saw the AWEX EMI fall by 27 cents to close below 1500 cents again at 1495.The strengthening A$ also led to the indicator losing  ground in US$ terms to 1122, a  13 cent decline.  The finer microns took the brunt of the falls as 18.5 and finer gave up 70 to 90 cents. The broader types had smaller falls; 19/20 micron fell 40 to 50 cents while 21 and coarser looked about 20 cents cheaper.  Only the finer lots with the right “specs” and a “spinners” style escaped any real price reduction with some “LB  to B” VM lots(1.5 to 4%) in the medium micron range looked solid to just buyers’ favour.

Skirtings also followed a similar pattern to the fleece room. The better style lots <3% VM and finer than 19 micron were only adjusted down by 10 cents whereas broader, burrier lots up to 8% VM fell by 40 to 50 cents with ever increasing volume of  lots containing heavy cot/colour becoming more unpopular, up to 80 cents  back from last week’s quotes.  The carding sector was the only one to find any semblance of buyer support as the 3 MCIs were in sellers’ favour by an average of 5 cents (1180 to 1201). Crossbreds were also caught up in the cheaper merino trend as all types gave up 5 to 10 cents.

The shine has certainly come off the market over the past 3 sales. Since the good (but unexpected) rise in the 1st week of May the direction has been down - a 49 cent drop for the EMI in that time - undoing all those gains as all merino indicators are now 60 to 120 cents back from those levels.

Futures gave no indication of the falls that were to come as the lock-in price for 21s was at 1500 cents out to the end of June as this has fallen to 1475 today, bang on the cash level. Outside influences like the investigation into the Trump/Russian association before the US election and the  tragic bombing in Manchester, rattled global stock markets sending the US $ down against all foreign currencies - this not helping the market. The quality of the selection is also playing a part in the market’s retreat and, unfortunately, the reduced quantities not putting buyers under any pressure.  The sudden lack of interest from many overseas users has buyers on the back foot and reticent to continue their “buy and sell” trading pattern as the coverage of previously sold forward orders the only reason to buy.

Next sale will see volumes dip below 30,000 bales, the smallest national catalogue since August, but talk on the show-floor is that enquiry of fresh sales from overseas is also on the decline so a tough market could be on the cards in the short term.

Ag Concepts Fwd Prices at 26 May 2017

Micron

Date

Low

High

21

28-Jun-17

1480

1480

21

23-Aug-17

1415

1435

21

25-Oct-17

1425

1430

Main Buyers (This Week)

1

Techwool

4531

2

Aust Merino Exp.

2901

3

Fox & Lillie

2520

4

Tianyu

2134

5

Lempriere Aust.

1865

6

Chinatex

1710

7

Modiano

1468

8

Michell Wool

1359

9

PJ Morris

1311

  

Eastern Market Indicators (AUD cents/kg clean)

1495 cents ê 27 cents compared with 19/05//2017

Northern Market Indicators (AUD cents/kg clean)

1580 cents ê 32 cents compared with 19/05/2017

AUD/USD Currency Exchange

0.7504 é 0.0048  compared with 19/05/2017

12 May 2017

Friday, May 12, 2017

WEEKLY MARKET REPORT

Week Ending 12th May, 2017

AWEX Northern Micron Indices Comparison

 

AWEX INDEX

This Week

S45/16

This Week

M45/16

Last Sale

S44/16

Sydney

Change

Last Year

Sydney(Wk46)

Sydney Yearly

Change

17

2354

2302n

2382n

-28

1573

+781

18

2223

2188

2251

-28

1556

+667

19

1939

1963

1967

-28

1511

+428

20

1630

1626

1660

-30

1438

+192

21

1506

1511

1540

-34

1413

+93

22

1441n

1420n

1454n

-13

1387n

+54

26

1043

1058n

1044n

-1

1061n (M)

-3 (M)

28

768

746n

763

+5

798n

-30

30

588

587n

585n

+3

684n

-96

MC

1171n

1198n

1169

+2

1082

+89

DOLLAR DOWN + VOLUME DOWN = MARKET DOWN

Our bold prediction that the market would be solid was spot on! The only trouble was that it barely lasted a day. While the market was okay on the Eastern seaboard, cracks appeared in Fremantle late in the opening session. These cracks widened considerably on Thursday as all 3 centres lost ground. The end result saw the EMI fall by 10 cents to 1534 and gave up 19 cents in $US terms (to 1127) as the $AU came under more pressure to fall to 73.30 on Wednesday night (a 4 month low). No micron was immune from the cheaper trend bar 16.5s (just a 6 cent loss); all others (17 to 21s) retreated by 25 to 35 cents with 22 and coarser looking 10/15 cents back from last week. We were fortunate enough to sell on Wednesday and escaped the carnage of the final session. Types with the right specs still defy any negative tone; we had 2 lots around 19 micron make 80 to 110 cents better than the indicator.

The outcome was similar for skirting types. Fine lots <18 micron and under 5% VM  with no cot/colour gained a modest 10/15 cents while the broader burrier selection peeled off by 40 to 60 cents. Again buyers were commenting on the amount of cot and jowl that is in skirtings and the need to apply heavy discounts. If time and staff allow when shearing, it’s crucial that these faults be taken out to lessen the discounts on these wools. Cardings escaped the falling market to be in sellers’ favour to 15 cents dearer (Melbourne). Crossbreds also defied the cheaper trend of their merino counterparts to also finish in sellers’ favour - the forex rate and diminishing volumes helping this sector. 

This week proves that a smaller selection and favourable currency is not always enough to stave off a fall in the market. The rapid rise of last week looks now to have been too much. The inferior selection with ever increasing VM levels that buyers found hard to place on certain days (in some centres) compared to previous sales also influenced price trends. Prompt business was hard to find as the weaker AU$ vs US$ saw cheaper offers to Chinese mills and some waiting to see if any further reductions were forthcoming.

Mixed signals looked to dominate showfloor talk as demand for sub 18.5 micron has stalled, as these price levels hit some resistance after rising rapidly since January with only the “crackers” unaffected. The fall in prices did meet with some grower resistance as the pass-in rate climbed to 16% nationally and a whopping 28% in Fremantle. Next week’s offering is slightly less at 36,000 bales; hopefully the dwindling volume can help the market hold firm.

Ag Concepts Fwd Prices at 12 May 2017

Micron

Date

Low

High

21

23-Aug-17

1415

1435

21

11-Oct-17

1425

1430

21

25-Oct-17

1425

1430


Main Buyers (This Week) 

1

Techwool

4105

2

Fox & Lillie

3838

3

Tianyu

3427

4

Aust Merino Exp.

3264

5

Lempriere Aust.

2411

6

PJ Morris

1658

7

Chinatex

1410

8

Modiano

1258

9

Kathaytex (Vic)

1137

  

Eastern Market Indicators (AUD cents/kg clean)

1534 cents ê 10 cents compared with 05/05//2017

Northern Market Indicators (AUD cents/kg clean)

1615 cents ê 24 cents compared with 05/05/2017

AUD/USD Currency Exchange

0.7348 ê 0.0073  compared with 05/05/2017

5 May 2017

Friday, May 05, 2017

WEEKLY MARKET REPORT

Week Ending 5th May, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/16

This Week

M44/16

Last Sale

S43/16

Sydney

Change

Last Year

Sydney(Wk45)

Sydney Yearly

Change

17

2382n

2323

2324

+58

1557

+825

18

2251

2190

2178

+73

1523

+728

19

1967

1977

1897

+70

1477

+490

20

1660

1648

1591

+69

1433

+227

21

1540

1535

1473

+67

1397

+143

22

1454n

1431

1396n

+58

1376n

+78

26

1044n

1042n

1043

+1

1039n

+5

28

763

744n

738

+25

782n

-19

30

585n

588n

579

+6

681n

-96

MC

1169

1184n

1165

+4

1038

+131


GROWERS AHEAD OF BUYERS ... FOR THE MOMENT!

The inkling that the market could go on a bit of a run was rammed home from the opening bell on Wednesday as buyers ramped up their bidding. Solid gains across all merino fleece microns saw the AWEX EMI surge to 1544 (+43) just 7 cents shy of the lofty heights of March. The favourable move in the exchange rate (down by 1 cent) saw the EMI in $US add 22 cents to its value to 1146. Rises were across the board and included all styles and specs. 17 to 22 micron jumped 60 to 80 cents with finer lots up by 40 (22s in Fremantle climbed by 100 cents!!). Growers warmed to these new levels as just 67 bales of fleece were passed-in in Sydney and only 100 in Fremantle.

Skirtings weren’t caught up in the rapid rises of their fleece counterparts. The opening session saw sub 18s >3% VM give up 20/30 cents but a change in sentiment on the final day saw these types claw back 10 cents while the lots containing heavy colour/cot looked to increase their discounts for these faults as the price gap between good and bad widens. It will become more important to remove these faults from “BKN” lines as we go forward.  Cardings had a quiet but solid sale as 3 centres MCIs were unchanged to sellers’ favour.  The decreasing volume of crossbreds also spent the sale consolidating their levels as most microns looked up to 10 cents higher, bar 28s up by 25 cents.

A great market to sell into as a perfect storm of smaller volumes, lower FEX rates and good demand has buyers scrambling for quantity. The underlying strength of the market can be seen in the fact that this season we have offered 90,000 bales more (2 selling weeks) than the previous and the EMI is 22% higher than a year ago (1544 to 1268). The larger volume is a result of the good season from last winter increasing cuts/head and the rising market tempting growers with wool on hold to catch the good prices on offer. April testing figures were down 7.5% from last year but the progressive total year on year is 3.2% above last season equating to 306.5 mkg compared to 296.3 mkg.

Our correspondent at the 86th IWTO Congress in Harrogate, Yorkshire reports of the very good outlook for wool. It was only 20km away where Samuel Marsden’s 1st shipment of Australian wool was processed in 1807 transforming this area into the wool processing capital of the world. By 1900 50% of the global processing capacity was in Bradford. Harris Tweed is a story of survival, from near extinction to adopting innovation, craftsmanship and telling the story of wool, they have attracted a new generation and market to be a leader in woollen products again. Market should be solid again.

Ag Concepts Fwd Prices at 5 May 2017

Micron

Date

Low

High

21

14-Jun-17

1480

1480

21

23-Aug-17

1420

1435

21

25-Oct-17

1425

1430

 


Main Buyers (This Week)

1

Techwool

6060

2

Fox & Lillie

4868

3

Aust Merino Exp.

2951

4

PJ Morris

2455

5

Lempriere Aust.

2362

6

Tianyu

2024

7

Michell Aust.

1618

8

Chinatex

1524

9

New England Wool

710

 

Eastern Market Indicators (AUD cents/kg clean)

1544 cents é 43 cents compared with 28/04//2017

Northern Market Indicators (AUD cents/kg clean)

1639 cents é 42 cents compared with 28/04/2017

AUD/USD Currency Exchange

0.7421 ê 0.0063  compared with 28/04/2017