Weekly Market Reports


26 January 2018

Thursday, January 25, 2018

WEEKLY MARKET REPORT

Week Ending 26th January, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S30/17

This Week

M30/17

Last Sale

S29/17

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2684

2663

2672

+12

2004

+680

18

2345

2275

2374

-29

1907

+438

19 

2101

2085

2137

-36

1735

+366

20

1900

1893

1942

-42

1537

+363

21

1785

1765

1786

-1

1432

+353

22

1723n

1697

1709n

+14

1378n

+345

26

1046

1065

1128

-82

919n

+127

28

735

738

808

-73

661

+74

30

550

560

594

-44

554

-4

MC

1334n

1271n

1513n

-179

1160

+174

CARDINGS & CROSSBREDS HIT THE WALL

Our worst fears were realised this week as sectors of the market came off historical highs in an historical fashion. Not since 1997 has the carding market retreated so swiftly where locks, in particular, ended the day up to 250 cents cheaper yesterday. No one was prepared for the extent of the fall, buyers included. Our sources told us that a drop of 30 - 40 cents clean over the week was expected and factored in but, as the week progressed and buyers’ credit facilities expired, the market had only one way to go. Pass-in rates for cardings and crossbreds ranged between 20% and 33% across the three centres with brokers’ pre sale valuations suddenly looking grossly optimistic.

Merino fleece wools, particularly well measured lots, held their ground fairly well as did the lower VM pieces and bellies.

High VM and high mid break lines came under increasing pressure on Thursday and poorly prepared clips, particularly XB wools, received little buyer interest and were noticeably cheaper.

The run up to Chinese New Year typically sees a slow down in shipping and a softening market that is usually felt a few weeks out. The concern now is that this pull back has happened a week or two early as Chinese New Year isn’t until Feb 16-23. Chinese orders began to slow last week and it was felt that a moderate fall would have seen orders move again and the market would have stabilised. Now we have a situation where they may well sit on the fence and see how much further the market can fall, particularly with merino cardings which were so historically high.

It’s a tough decision to make now whether we are better sitting it out or sell into a falling market. Our sources tell us that with oddments there is plenty of room for downside movement and we would be better off having these wools sold.

Overall though, the merino market outlook is still very positive and good types should hold reasonably well and could improve after Chinese New Year. A slightly different story for the XB sector as these wools haven’t performed well for quite some time now and this week’s falls made that situation worse. It may be some time before these types gather any real momentum, particularly the coarser end.

To put all this in perspective the 36,430 bales sold this week averaged $2014 a bale so it’s not all doom and gloom. Next week a similar offering of 42,244 bales will be offered with Macwool on day one with 989 bales.

Main Buyers (This Week)

1

Techwool

4603

2

Tianyu Wool

3670

3

Seatech Ind.

2741

4

Fox & Lillie

2704

5

Aust. Merino

2357

6

Kathaytex (Vic)

2332

7

Lempriere

1963

8

PJ Morris

1813

9

Kathaytex (Aust)

1012

Eastern Market Indicators (AUD cents/kg clean)

1744 cents ê 57 cents compared with 19/01/2018

Northern Market Indicators (AUD cents/kg clean)

1845 cents ê 56 cents compared with 19/01/2018

 AUD/USD Currency Exchange
0.8028 é 0.0064 compared with 19/01/2018

19 January 2018

Friday, January 19, 2018

WEEKLY MARKET REPORT

Week Ending 19th January, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S29/17

This Week

M29/17

Last Sale

S28/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2672

2657n

2635

+37

2016

+656

18

2374

2358

2389

-15

1931

+443

19

2137

2150

2164

-27

1761

+376

20

1942

1931

1976

-34

1583

+359

21

1786

1778

1808

-22

1478

+308

22

1709n

1699

1721n

-12

1426n

+283

26

1128

1135n

1143

-15

930

+198

28

808

813

818

-10

665

+143

30

594

591

598

-4

575

+19

MC

1513n

1501n

1544n

-31

1165n

+348

MARKET FLATLINES!

This week’s wool market couldn’t sustain last sale’s rapid rises as the AWEX EMI eased by 17 cents to 1801 while the Northern Region Indicator also lost ground by 7 cents to 1901. As the FRX pushed higher to nudge 80 cents and the big catalogue of 54,000 bales was on offer, this gave the buyers a chance to be a bit more selective with their purchases. Prior to Christmas (and last week) types with high mid-breaks and other faults had been swept up in the price hike as discounts were minimal. Suddenly the discounts for any type of fault came back into vogue as all microns (bar 17.5 and finer) suffered losses to some degree. Medium microns (19 to 21) lost 20 to 35 cents while 18/18.5 and 22s gave up 10 to 15 cents. As mentioned earlier, finer types bucked the cheaper trend as 16.5/17.5 were 5 to 15 dearer and 17s rose a healthy 35 cents - this resulting in the pass-in rate to rise slightly for fleece types to 1.9%

Skirtings looked to track 2 ways as the < 18 micron types with < 5% VM were in hot demand as buyers pushed these lots up by another 30 to 40 cents while the broader burrier skirtings with heavier colour/cott fell by 10/20 cents. The spectacular run that cardings have had also came to an end bar CRS which remained firm throughout the sale and LMS types that were 20/30 cents higher and some lots extreme. LKS and STN gave up 40 to 60 cents as the 3 MCIs are now 1501 to 1513 but still great levels. Crossbreds also reversed last sale’s dearer trends to fall back by 5 to 15 cents. 

Everyone was wondering when a correction might occur as the market has been on, what some might call, a “bull run” since mid October when the EMI was 1560 lifting to over 1800 while the MCI has tracked upwards to the tune of almost 300 cents (1230 to above 1500). Over this time there has only been 7 selling days of losses. Some buyers were surprised as to the rise and rise of the market given funding difficulties late last year and the volume of wool that had been sold compared to last season (up by 5% - 49,000 bales) but the market has more than absorbed this extra quantity. Reports from China that fresh business had slowed a touch and the FRX that did sneak above 80 cents and the big offering all led to the slight pull-back in prices on Thursday according to the experts. This brief respite from the frantic chase of supply and constant rising prices will be welcome by all mills but may only be a brief interruption to the ruling trend as many wool users look to have their immediate orders and machinery demands covered. As prices continued to rise till now many mills were nervous about passing on the new price levels particularly in the woollen sector. Ultimately retail sales will determine price movements but wool, especially Merino, continues to sell well in shops and online, remembering there is virtually no greasy stock in Australia and very little wool in front of machinery overseas waiting to be processed. We sell next Wednesday with 600 bales on offer.   

Ag Concepts Fwd Prices as at 19 January, 2018

Micron

Date

Low

High

21

11-Apr-18

1750

1750

21

13-Jun-18

1720

1720

Main Buyers (this week)

1

Techwool

10745

2

Fox & Lillie

3764

3

Seatech Ind.

3603

4

Modiano

2618

5

Kathaytex (Vic)

2426

6

PJ Morris

2346

7

Endeavour Wool

2248

8

Tianyu Wool

2193

9

Michell Aust.

2144

Eastern Market Indicators (AUD cents/kg clean)

1801 cents ê 17 cents compared with 22/12/2017

Northern Market Indicators (AUD cents/kg clean)

1901 cents ê 7 cents compared with 22/12/2017 


AUD/USD Currency Exchange

0.7964 é 0.0090 compared with 22/12/2017

12 January 2018

Friday, January 12, 2018

WEEKLY MARKET REPORT

Week Ending 12th January, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S28/17

This Week

M28/17

Last Sale

S24/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2635

2641n

2538

+97

1943

+692

18

2389

2363

2300

+89

1861

+528

19

2164

2161

2086

+78

1733

+431

20

1976

1961

1883

+93

1587

+389

21

1808

1800

1745

+63

1495

+313

22

1721n

1723

1642n

+79

1444n

+277

26

1143

1156

1115

+28

941n

+202

28

818

825

785

+33

662

+156

30

598

596

590

+8

579

+19

MC

1544n

1559n

1470

+74

1164

+380

 

RECESS OVER – RECORDS BROKEN!

Wool sales resumed this week after the 3 week Christmas recess with a high degree of uncertainty and anticipation. For several years now Jan/Feb has been quite rewarding for growers selling in this period but, with the A$ appreciating by 2 cents to high 78s and the largest national catalogue since mid January last year, opinion was divided as to how the market would open up. One buyer thought this sale would be either side of where it finished pre Christmas while another thought a rise of 40/50 cents was on the cards before the FRX movements but 10 to 20 cent gains were on the cards. Both wrong!! Melbourne started this series cautiously on Tuesday but as the 3 centres sold on Wednesday the market exploded into action and consolidated these rapid rises on the final day. Gains ranged from 116 cents (16.5s) to 65 cents for 18.5 with 19 to 20 micron averaging a 100 cent climb in Fremantle. The AWEX EMI jumped 58 cents to 1818, a new record with the rise in US$ terms bigger (82 cents to 1431) due to the higher FRX. Just 45 bales of fleece were passed-in in Sydney clearing 99.1% as all microns and types, regardless of faults, benefitted from the mad scramble to secure wool. In Sale 23 we had 1 lot crack the 2000 cent barrier. This sale 5 lots from Coolah made over 2000 cents, the top being 2130 for a 14.9 micron lot at 3128 cents clean. This was the highest clean price in Australia on Thursday.

Skirtings also were swept up in the buying frenzy of Room 1 although not to the extent of fleece types as gains of 70 to 80 cents for < 19 micron and < 8% VM covered most types in that range with burrier lots (up to 15%) 20 cents dearer and heavy (20%) VM types with colour/cott unchanged. That same grower from Coolah averaged over 1700 cents for his “BKN”, 15.8 micron and 4.6% VM. Cardings also rewrote the record books as LKS skyrocketed by 60/80 cents with STN/CRT posting 50 to 60 cents gains with LMS extreme, the 3 MCIs now range from 1544 to 1564. The largest XB catalogue since December, 2015, (32%) fared well as 26 to 30 micron gained 10 to 30 cents while 32s lost 20 cents.

A great start to the year as buyers were desperate to secure volume to keep mills running after 3 weeks of recess. Demand is still outstripping supply as forecasted rosters show national quantities back to the 40K to 45K after next week’s 54,000 bale sale. This reduced quantity to come should be enough to keep buyers under pressure to buy the amount of wool to keep mills turning over. All merino indicators are at 5 year highs and record levels for 19 micron and broader as are skirtings and cardings. Sydney has its 1st 3 day sale since August with 16,000 bales on offer with Macwool selling first on Wednesday with 1145 bales up for grabs.

Ag Concepts Fwd Prices as at 12 January, 2018

Micron

Date

Low

High

21

28-Mar-18

1755

1755

21

27-Jun-18

1700

1700

21

12-Sep-18

1580

1580

 

Main Buyers (this week)

1

Techwool

9200

2

Fox & Lillie

7211

3

Aust. Merino

3060

4

Lempriere

3041

5

PJ Morris

3013

6

Seatech Ind.

2946

7

Michell Aust.

2743

8

Endeavour Wool

2692

9

Kathaytex (Vic)

2374

 

Eastern Market Indicators (AUD cents/kg clean)

1818 cents é 58 cents compared with 15/12/2017

Northern Market Indicators (AUD cents/kg clean)

1908 cents é 67 cents compared with 15/12/2017

 

AUD/USD Currency Exchange

0.7874 é 0.0204 compared with 15/12/2017