Weekly Market Reports


30 June 2017

Friday, June 30, 2017

WEEKLY MARKET REPORT

Week Ending 30th June, 2017

AWEX Northern Micron Indices Comparison 

AWEX INDEX

This Week

S52/16

This Week

M52/16

Last Sale

S51/16

Sydney

Change

Last Year

Sydney(Wk53)

Sydney Yearly

Change

17

2200n

2173n

2232

-32

1548

+652

18

2130

2087

2165

-35

1516

+614

19

1859

1864

1892

-33

1481

+368

20

1634

1618

1672

-38

1462

+172

21

1543

1547

1583

-40

1449

+94

22

-

1476

1516n (M)

-40 (M)

1431n (M)

+45 (M)

26

1103

1096n

1109n

-6

1104n (M)

-8 (M)

28

756

765

769

-13

779n

-23

30

558

560n

548

+10

678n

-120

MC

1184n

1170n

1184n

0

1084

+100 

BIG VOLUME – NO PROBLEM … HOPEFULLY!!

After regaining some of the lost ground in May, the market ran out of steam following 5 days of rises in the past 2 weeks that saw the AWEX EMI go from 1467 to 1533. Talk of the larger national catalogue in the opening 2 weeks of July of over 90,000 bales certainly gave the buyers a chance (excuse??) to relax their buying patterns. Big falls on the opening day were somewhat negated by a more positive tone in the final session. By week’s end the EMI lost 26 cents to 1507. The fall in $US terms was minute, just 4 cents to 1154 as the A$ strengthened against the $US by 1 cent (1.38%). Losses ranged from 25 to 45 cents across all the merino microns and, in some cases, 100 cents for < 18.5 off types and burrier lots. Once again, if lots had the right specs, they were in high demand as wools from Goolma, Cunnamulla and Parkes made from 50 to 130 cents higher than their indicators.

Room 2 types (skirtings, cardings and crossbreds) looked to escape the carnage of the merino fleece types.  The odd fine lot of superior type PCS/BLS were extreme with < 3%VM fully firm and burrier lots actually 10 to 20 cents better. Cardings remained unchanged - LKS were in sellers’ favour with STN/CRS in buyers’ favour. Crossbreds looked to split into 2 markets as finer than 28s were 5 to 15 cents off the pace with 30 micron and broader 10 to 15 cents higher.

As mentioned earlier, upcoming volumes rather than demand drove the market’s direction especially on the opening day. Overseas users took advantage of the new level of prices set in this session as this renewed demand went straight into the sale rooms on Thursday to completely stop the sliding market as most buyers quoted 19 micron and broader 10 to 15 cents dearer. The predicted outcome for next week (despite the large volume) is solid but very sensitive to any currency shift.

The final sale of the season was disappointing but it ended a season of highlights. The EMI set a record for the highest level for an end to a season (1507), 210 cents (16%) better than 12 months ago. The average for the EMI was 1401 for the year, up 147 cents (12%) while in $US terms it was a 20% jump to 1154 cents. This was the 4thyear in a row that the average of the EMI increased and the eighth increase over the past decade. There were 80,600 bales more offered this season than last season which saw 56,000 bales sold to the trade higher than the previous year. Of the 1,721,000 sold, Techwool Trading secured 255,573 bales (15%) with Fox & Lillie in 2nd spot (174,000). The next 5 buyers bought between 133,000 to 110,000 bales as the top 10 buyers grabbed 72.8% or 1,253,000 bales. 

Ag Concepts Fwd Prices at 30 June 2017

Micron

Date

Low

High

21

16-Aug-17

1490

1490

21

20-Sep-17

1430

1430

Main Buyers (This Week) 

1

Techwool

3975

2

Aust Merino Exp.

3718

3

Fox & Lillie

3663

4

Lempriere Aust.

2914

5

Chinatex

2083

6

Modiano

1775

7

Michell

1606

8

PJ Morris

1573

9

Tianyu

1562

 

Eastern Market Indicators (AUD cents/kg clean)

1507 cents ê 26 cents compared with 23/06//2017

Northern Market Indicators (AUD cents/kg clean)

1578 cents ê 21 cents compared with 23/06/2017

AUD/USD Currency Exchange

0.7655 é 0.0101  compared with 23/06/2017

23 June 2017

Friday, June 23, 2017

WEEKLY MARKET REPORT

Week Ending 23rd June, 2017

AWEX Northern Micron Indices Comparison 

AWEX INDEX

This Week

S51/16

This Week

M51/16

Last Sale

S50/16

Sydney

Change

Last Year

Sydney(Wk52)

Sydney Yearly

Change

17

2232

2212n

2197n

+35

1532

+700

18

2165

2149

2123

+42

1505

+660

19

1892

1922

1870

+22

1471

+419

20

1672

1669

1638

+34

1435

+237

21

1583

1580

1554

+29

1423

+160

22

1518n

1516

1485n

+33

1402n

+116

26

1109n

1129n

1109n

0

1091n (M)

+38

28

769

769n

767n

+2

784n

-15

30

548

543n

533n (M)

+10 (M)

686n

-138

MC

1184n

1188n

1181

+3

1079

+105

HAS THE MARKET PEAKED??

Last week’s recovery continued on this sale as renewed demand, lack of volume and a stable A$ all week ensured buyers were on the front foot with their purchasing patterns. The opening session saw the largest increases (while they looked a bit more selective on the final day) but still pushed the market higher. By week’s end the AWEX EMI added another 27 cents to its value, now 1533. The rise in US$ terms was about half, 12 cents to 1158 this due to the FRX coming back to the mid 75 cent level from last week’s highs of over 76. Once again, the rises were across the board and extended to the “off” types with colour, cott and VM levels that had been somewhat out of favour in previous sales. 20 to 45 cent gains covered 17 to 22 micron with 16.5 and finer just in sellers’ favour as the 17 MPG is now 10 cents higher than 16.5s. Once again, sub 19 micron types with the right specs were extreme as a lot from Goolma and 2 lots from Dunedoo made 100 to 200 cents over their indicators.

Skirtings kept pace with their fleece counterparts this sale as the better style low VM ( < 3%) types posted 40/50 cent rises while the 5% VM and higher 20 cents to the good. Cardings made subtle gains in Sydney, all types in sellers’ favour to have the indicator up by 3 cents to 1184. Melbourne played catch-up in this sector, their MCI up by 21 cents to 1188. Crossbreds also benefitted from increased demand as all types added up to 10 cents.

The size of the Eastern Seaboard only offering certainly played into growers’ hands this week. The smallest merino fleece selection - 11,344 bales - for 8 years with the smallest skirting and carding offering of the season helped the market to clear 95%.The FRX went in favour of overseas buyers by 0.8% but, despite this helping the market, exporters reported a widespread lack of new business being written and virtually no stocktaking at these new levels, as buyers pushing to finish outstanding orders the main driver in the upward trend.

Indent buyers led the initial charge only to be non existent on the final day in Melbourne as fleece prices fell 15/20 cents. Sydney, however, was far stronger to add 15 to 20 cents to their previous levels to bring both centres to closer alignment with each other as all fleece indicators in both centres are within 15 cents (bar 17s and 19 micron, 20 and 30 cents apart). Next week sees all 3 centres selling with 37,000 bales on offer and some talk of purchasing hesitancy as the new season volumes rise sharply when compared to recent sales - the market certain to move one way or the other. 

Ag Concepts Fwd Prices at 23 June 2017

6icron

Date

Low

High

21

9-Aug-17

1500

1500

21

27-Sep-17

1438

1450

21

13-Dec-17

1425

1425

Main Buyers (This Week)

1

Techwool

2402

2

Fox & Lillie

2329

3

Lempriere Aust.

2293

4

Aust Merino Exp.

2125

5

Tianyu

1432

6

Modiano

1187

7

Natsun Aust.

841

8

United Wool Co.

730

9

G Schneider Aust.

381

 

Eastern Market Indicators (AUD cents/kg clean)

1533 cents é 27 cents compared with 16/06//2017

Northern Market Indicators (AUD cents/kg clean)

1599 cents é 24 cents compared with 16/06/2017

AUD/USD Currency Exchange

0.7554 ê 0.0056  compared with 16/06/2017

16 June 2017

Friday, June 16, 2017

WEEKLY MARKET REPORT

Week Ending 16th June, 2017

AWEX Northern Micron Indices Comparison 

AWEX INDEX

This Week

S50/16

This Week

M50/16

Last Sale

S49/16

Sydney

Change

Last Year

Sydney(Wk51)

Sydney Yearly

Change

17

2197n

2188n

2183n

+14

1534

+663

18

2123

2110

2075

+48

1512

+609

19

1870

1886

1837

+33

1476

+394

20

1638

1636

1574

+64

1420

+218

21

1554

1549

1505

+49

1398

+156

22

1485n

1478n

-

+56 (M)

1379n

+106

26

1109n

1119n

-

-

1100n (M)

+19

28

767n

765

762n

+5

786

-19

30

-

533n

568n

+8 (M)

699 (M)

-166

MC

1181

1167

1180n

+1

1084

+97

MEDIUM WOOLS LEAD THE CHARGE!

The lead that the market took last Thursday to see it finally bottom out was a precursor to this week’s market direction. Momentum built as the sale progressed as buyers were cautious, but aggressive, with their purchasing patterns in the opening session to see the competitive tension build even more on Thursday. The AWEX EMI posted double-digit gains on both days to record a 28 cent rise to 1506(1.9%). In US$ terms the jump was just as impressive, 31 cents to 1146, 2.8% a good rises considering  the FRX climbed to well over 76 cents mid-week which can more often than not lead to a price fall. Medium types looked to be back in vogue as they led the price recovery - 23 micron down to 18s gained 35 to 65 cents-some lots achieving a 100 cent jump while finer than 18 managed a 15 cent lift with European types 45 cents to the good. These new levels saw just 2% of fleece passed-in on Thursday.  With 22 micron at 1485 cents clean this looks to be in record territory for that micron as 21s are now well over 1500 cents.

Skirtings had a quieter sale with some types in the 18 micron range around 5% VM cheaper by 5/10 cents on the opening day. Buyers warmed up in the final session to push all types and VM levels around 10 cents dearer by the close, bar the cotty/jowly lots that are still out of favour as discounts increase on a weekly basis. Cardings also looked to mark time as movements in the 3 centres were minimal as Sydney/Fremantle finished in sellers’ favour by up to 10 cents while Melbourne was quoted 5 cents cheaper as a 40 cent gap between the low and high (1176-Melb. to 1207-Frem) now exists. Crossbreds also failed to make any dramatic shifts as most microns made subtle gains of up to 10 cents.

A good week to sell wool as the market recoups some of the losses of the past 4 weeks. Has the dwindling volume, impending 3 week recess in July or the fact that levels have fallen to a point where fresh business could be written (??) be reasons that market sentiment has moved to the positive. The rising A$ certainly hasn’t hindered the market’s rise this sale. When the market started sliding back in May the A$ was 73.50 and fell below 72 cents!! Now the currency is higher yet the market is on the improve. Dare we suggest that FRX rates really don’t play a part when buyers need to buy wool?? The better than expected unemployment rate(the fastest quarterly increase since November, 2004) helped the A$ jump to a 3 month high and the US Fed’s announcement of their interest rate rise soured the US$ globally. Next sale reverts to the 2 East Coast centres operating with just 25,000 bales on offer - should be solid to dearer.     

Ag Concepts Fwd Prices at 16 June 2017

Micron

Date

Low

High

21

12-Jul-17

1495

1495

21

13-Sep-17

1420

1420

21

25-Oct-17

1420

1420

Main Buyers (This Week) 

1

Fox & Lillie

3924

2

Techwool

3905

3

Aust Merino Exp.

2418

4

Tianyu

1889

5

Lempriere Aust.

1707

6

Modiano

1425

7

PJ Morris

1339

8

Michell Wool

1173

9

Kathaytex Aust.

561

 

Eastern Market Indicators (AUD cents/kg clean)

1506 cents é 28 cents compared with 9/06//2017

Northern Market Indicators (AUD cents/kg clean)

1575 cents é 30 cents compared with 9/06/2017

AUD/USD Currency Exchange

0.7610 é 0.0068  compared with 9/06/2017

9 June 2017

Friday, June 09, 2017

WEEKLY MARKET REPORT

Week Ending 9th June, 2017

AWEX Northern Micron Indices Comparison 

AWEX INDEX

This Week

S49/16

This Week

M49/16

Last Sale

S48/16

Sydney

Change

Last Year

Sydney(Wk50)

Sydney Yearly

Change

17

2183n

2168n

2183n

0

1532

+651

18

2075

2074

2088

-13

1507

+568

19

1837

1832

1836

+1

1465

+372

20

1574

1569

1564

+10

1405

+169

21

1505

1494

1476n

+29

1377

+128

22

-

1422n

-

-

1370 (M)

+52 (M)

26

-

-

1053n

-

1070n (M)

-

28

762n

755n

755n

+7

793n

-31

30

568n

525n

563n

+5

705n

-137

MC

1180n

1173n

1180

0

1087

+93

AWI COMMIT MILLIONS TO WEB PORTAL

Not surprisingly, the Board of AWI announced this week to commit a further $3-$4 million to establish a wool exchange portal (WEP). What exactly is the WEP? Well we’re not exactly sure just yet. Maybe something like a Trivago for the wool industry, so described by the WEP working group chairman Will Wilson. Otherwise, from what we know, it’s a website that will contain information on selling options, compare selling charges, contain wool clip data and promote direct selling with processors. Born out of frustration a few years back (primarily by fine wool growers) the AWI Board decided to shoot the messenger and have committed substantial amounts of grower’s levies to duplicating much of what is already on offer.

They boldly predict this week that the WEP will generate savings of up to $38 million over 15 years. Not $38 million in one year but 15 years! According to respected wool industry analyst, Andrew Woods, that equates to $1.63 a bale or 1% of the current selling costs! As predicted, the auction system is seen as archaic and outdated and the “savings” will be garnered by direct sale. In our opinion this will play directly into the hands of the big Chinese players who, of course, would rather buy direct without having to compete. Our opposition to this doesn’t come from a threatened position. In fact, the WEP group have admitted they need brokers on board for logistics, testing and guaranteed payments (which the current systems deliver). Our opposition comes from this being poor use of grower levies which would serve growers much better being spent on the many good projects AWI currently have. I predict this one to be an expensive dud.

The market continued in the same vein as the previous 4 sales on the opening day, giving up more ground as losses extended their run to 8 days. However, the market made a welcome turn for the good on the final day as all microns added 15 to 30 cents to their overnight levels. Lots finer than 19 micron finished the week solid to buyers’ favour (15 cents) while 19.5 and broader posted good gains of 10 to 30 cents lifting 21s to 1505. The AWEX EMI rose 6 cents to 1478 while, in US$ terms, the lift was 27 cents, this due to the rapid rise in the A$ to 75.40 cents - a jump of over 1.5 cents for the week. Once again the better spec wools were in high demand as we sold a tidy 17.9 micron lot to Italy 150 cents higher than the indicator. Even with the market firming on the final day some discounts were still quite large for VM, colour and cott.

The skirting selection couldn’t follow the recovery of their fleece counterparts as losses over both selling days saw most types and descriptions peel off by 30 to 50 cents.  Cardings had another week as most types in this sector were left unchanged to sellers’ favour by 5 to 10 cents.  Macwool will offer 1095 bales on Thursday.

Ag Concepts Fwd Prices at 9 June 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

Aust Merino Exp.

3048

2

Techwool

3046

3

Fox & Lillie

2788

4

Lempriere Aust.

1394

5

Michell Wool

1177

6

Tianyu

1002

7

Modiano

515

8

United Wool Co.

512

9

G Schneider

508

  

Eastern Market Indicators (AUD cents/kg clean)

1478 cents é 6 cents compared with 2/06//2017

Northern Market Indicators (AUD cents/kg clean)

1545 cents é 2 cents compared with 2/06/2017

AUD/USD Currency Exchange

0.7542 é 0.0153  compared with 2/06/2017

2 June 2017

Friday, June 02, 2017

WEEKLY MARKET REPORT

Week Ending 2nd June, 2017

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S48/16

This Week

M48/16

Last Sale

S47/16

Sydney

Change

Last Year

Sydney(Wk49)

Sydney Yearly

Change

17

2183n

2132

2265

-82

1574

+609

18

2088

2042

2148

-60

1553

+535

19

1836

1811

1891

-55

1506

+330

20

1564

1553

1590

-26

1436

+128

21

1476n

1483

1477

-1

1404

+72

22

-

1416

1415 (M)

+1 (M)

1385 (M)

+31

26

1053n

1073n

1045n

+8

1094n

-41

28

755n

755n

755n

0

821n

-66

30

563n

536n

563n

0

715n

-152

MC

1180

1177n

1180n

0

1111

+69

BUYERS BACK ON TOP!

The market continued to drift as buyers were happy to let the market fall to levels that they could write new business. Where these new levels are is still an unknown. Losses over the series resulted in the EMI retreating by 23 cents to 1472. In US$ terms the fall was larger - 34 cents to 1088 - this due to the FRX rate dropping by over 1 cent to 73.85. Losses were similar to last sale, finer than 19.5 took the brunt of the falls 50 to 85 cents while 20s lost 25 cents and broader types were actually in sellers’ favour by 10/15 cents. Only the very best finer types escaped unscathed. We had some very handy lots from Goolma (17.5 to 18.3) make 100 cents above their indicators all bought by an Italian processor.

The skirting market suffered a similar fate to their fleece counterparts. Only the very best types attracted any semblance of buyer support to finish just off the pace while burrier lots 4 to 10% VM were quoted 40 to 60 cents lower and more for lots with jowl, cot and colour. Carding types remained solid with no real change in Sydney and Fremantle as Melbourne’s MCI lost 24 cents making all 3 centres now within 22 cents - 1199 to 1177. Crossbreds also looked to tread water as 26 micron and finer gained 10 cents while the middle microns were unchanged and broader types solid to 30 cents down.

The market’s losses now extend into its 4th week or 7 selling days since early May when the EMI peaked at 1549. The drift has accelerated over the past 2 sales to see the EMI at 1472 - a 77 cent fall since that peak. The dwindling national offerings that have averaged 33,000 bales over the past 4 weeks and the favourable FRX rate have done nothing to help the market. According to most buyers, selling tops finer than 19.5 micron has almost become “mission impossible” except for the Italian types, as the large price falls in these micron ranges illustrates over the past 4 weeks that range from 150 to 200 cents taking us back to pre Easter levels, but still 200 cents to the good from the sales resumption in January and up to 500 cents better than the same time 12 months ago.  

According to most exporters all sectors (bar 19.5 micron fleece and finer) are not too difficult to sell as can be seen with the levels that broader fleece, cardings and crossbreds are holding at. The Northern Hemisphere, especially China, is hitting the traditionally slow retail demand period of early summer as manufacturers can afford a “wait and see approach” with their purchases as can be seen with the finer microns taking the brunt of slacker demand.

Next sale sees a further reduction in the national catalogue with just 25,000 bales on offer on the east coast. Some reports suggest the market is struggling to come to terms with a pricing strategy for the upcoming autumn/winter Northern Hemisphere, in particular sub 19 micron as the prices are at historically and relatively high levels but manufacturers will have to ramp up production come spring for that period to cater for an increase in retail activity. 

Ag Concepts Fwd Prices at 2 June 2017

Micron

Date

Low

High

21

21-Jun-17

1470

1470

21

27-Sep-17

1400

1400

Main Buyers (This Week) 

1

Techwool

2796

2

Fox & Lillie

2384

3

Tianyu

2280

4

Aust Merino Exp.

1873

5

Chinatex

1682

6

Lempriere Aust.

1596

7

Michell Wool

1383

8

PJ Morris

1142

9

G Schneider

1024

 

Eastern Market Indicators (AUD cents/kg clean)

1472 cents ê 23 cents compared with 26/05//2017

Northern Market Indicators (AUD cents/kg clean)

1547 cents ê 33 cents compared with 26/05/2017

AUD/USD Currency Exchange

0.7389 ê 0.0115  compared with 26/05/2017