Weekly Market Reports


30 November 2018

Friday, November 30, 2018

WEEKLY MARKET REPORT

Week Ending 30th November, 2018

 AWEX Northern Micron Indices Comparison


AWEX INDEX

This Week

S22/18

This Week

M22/18

Last Sale

S21/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2487

2426

2472

+15

2459

+28

18

2372

2315

2343

+29

2270

+102

19

2188

2195

2204

-16

1999

+189

20

2141

2152

2172

-31

1773

+368

21

2129

2138

2158

-29

1649

+480

22

-

2141n

2144 (M)

-3 (M)

1561 (M)

+580 (M)

26

1335n

1359

1245n

+90

1035

+300

28

-

946

861n (M)

+85 (M)

734 (M)

+212 (M)

30

-

753

734 (M)

+19 (M)

536 (M)

+217 (M)

MC

1199

1181

1180

+19

1382n

-183

MARKET MARKS TIME

After last series’ big lift the market consolidated with no shift in the AWEX EMI to stay at 1860. The Sydney market managed a 2 cent gain while Melbourne lost 2 cents to come to that unchanged figure - a good result considering the FRX went against the A$ by 1%, this reflected in the rise of the EMI in US $ terms by exactly that amount, 13 cents to 1360. On the surface the market was unchanged but there were some very mixed results across the different categories. The fleece sector saw some subtle movements with the final designated super-fine sale of the year helping the sub 18.5 micron types post gains up to 30 cents and for the “Italian/European” types (spinners and better) premiums were in the order of 200/300 cents with some < 16.5 micron types even with very poor strength readings were 30 to 80 cents higher. Broader microns from 19 couldn’t maintain their big increases of last sale and lost 15 to 30 cents - buyers citing last Thursday’s push of 20/40 cents as too much after absorbing Wednesday’s price rises as plenty of business had been done that night after that day’s good gains.
Skirtings also benefitted from the superior selection on offer as these finer, low VM types lifted by 10 to 20 cents with some up to 50 cents to the good. Cardings also were quoted dearer helped along by the better offering as fine LKS < 17.5 micron looked 20 to 50 cents dearer with all other types of cardings solid. The Crossbred sector was the stand–out for the week as 26 to 28 micron shot up 80 to 90 cents. This push that started last sale has come about from some large “fake fur” orders being placed in China that uses 25.5 to 27.5 micron wools but these rises may be short lived as requirements may be filled pre-Christmas or early in the New Year.

The absence of the biggest Chinese indent trader did see prices falter early but other buyers soon filled the void to secure volume as well as local traders and one of China’s larger top-makers. A major talking point was quota issues in China with their allocation of 300 million greasy kgs of all wool allowed to be imported rumoured to be fulfilled. We have retained our share of that quota with end of September figures showing a 1% decrease of volume imported year on year. Fresh quotas will be issued in a month and, given the 3 week recess is almost upon us, little impact is expected if quotas have, in fact, closed off for the calendar year. After last week’s rise 40,000 bales are on offer next week and the final sale before Christmas could see close to 50,000 bales for sale.

Main Buyers (This Week)

1

Techwool

4543

2

Fox & Lillie

3226

3

Tianyu

2820

4

Endeavour wool

2567

5

Aust. Merino

2367

6

Lempriere

1927

7

Kathaytex Aust.

1678

8

Michell Aust.

1656

9

PJ Morris

929

Eastern Market Indicators (AUD cents/kg clean)

1860 cents é 2 cents compared with 23/11/2018

Northern Market Indicators (AUD cents/kg clean)

1905 cents é 7 cents compared with 23/11/2018

AUD/USD Currency Exchange

0.7315 é 0.0063 compared with 23/11/2018

23 November 2018

Friday, November 23, 2018

WEEKLY MARKET REPORT

Week Ending 23rd November, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S21/18

This Week

M21/18

Last Sale

S20/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2472

2448n

2445

+27

2460

+12

18

2343

2319

2278

+65

2277

+66

19

2204

2210

2104

+100

1985

+217

20

2172

2164

2057

+115

1758

+414

21

2158

2159

2048

+110

1636

+522

22

-

2144n

-

+59 (M)

1548n (M)

+596 (M)

26

1245n

-

1140n

+105

1055

+190

28

845n

861

760

+85

731

+114

30

-

734

663n

+50 (M)

539 (M)

+195 (M)

MC

1180

1183n

1100

+69

1381n

-201

AT LONG LAST, THE MARKET LIFTS

Finally, after weeks of showfloor chatter of a recovery in the market, it did happen!! Hopes were high after the last series’ modest rises that the market could get some serious traction and recoup the recent losses. Whether it be the lower quantities on offer, the fall in the FRX from the Tuesday night high of 73.35 cents to 72.3 before sales commenced, the latest release of wool production forecasting figures or just that the market had fallen enough and the Chinese deemed it was time to step back in and start to buy again is anyone’s guess.

Whatever the reason it was a dearer market in all sectors. The AWEX EMI clawed back 77 cents to 1858 led by the medium wool types (19 to 22s) up by 100 to 120 cents. Finer microns were dearer but not to the extent of their broader cousins, still hindered by oversupply and poor quality, 18/18.5 jumped by 60 to 70 cents while < 18 could only find 15 to 30 cent gains as discounts for any fault shrunk as 97.6% of fleece lots were sold in Sydney.

The positive tone also extended to Room 2 as skirtings, regardless of VM, style or micron added 40 to 80 cents to their values. It was another good sale for cardings as they jumped an identical amount to last series, 80 cents to 1180 as all types posted 50 to 80 cent rises. Crossbreds weren’t to be outdone either as < 28s climbed by 85 to 110 cents while broader than 30 microns looked up to 50 cents to the good.

As mentioned above whatever it takes for the market to rise is welcome but a major factor could have been the latest release of figures by the Wool Production Forecasting Committee that met last week, a month ahead of schedule due to global concern of supply in Australia. The new forecast came in at 305mkg for the current season, down from the 322mkg that was predicted at their August meeting and back by 11% on the 341mkg from last season. These figures are backed up by the AWTA stats that are 9.7% behind last year’s totals to the end of October and offerings are 17% (136,800 bales) lower than to the same sale last year. NSW production is predicted to fall by 20% this season to 100mkg, the lowest since 1902 with some brokers talking of a 25% reduction of wool through their stores by July next year. Alarming stats indeed! Talk of the market keeping this momentum is all the rage with only 3 sales before Christmas buyers need to deliver wool to their mills promptly to process in the new year with the 3 week recess looming.


Ag Concepts Fwd Prices at 23 November 2018

Micron

Date

Low

High

21

20-Feb-19

2100

2100

 21 22-May-19 2050 2050

Main Buyers (This Week)

1

Tianyu

3719

2

Techwool

3469

3

Endeavour Wool

2956

4

Fox & Lillie

2686

5

PJ Morris

1916

6

Michell Aust.

1658

7

Seatech Ind.

1148

8

Aust. Merino

1082

9

Modiano

846

Eastern Market Indicators (AUD cents/kg clean)

1858 cents é 77 cents compared with 16/11/2018

Northern Market Indicators (AUD cents/kg clean)

1898 cents é 79 cents compared with 16/11/2018

AUD/USD Currency Exchange

0.7252 ê 0.0021 compared with 16/11/2018

16 November 2018

Friday, November 16, 2018

WEEKLY MARKET REPORT

Week Ending 16th November, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S20/18

This Week

M20/18

Last Sale

S19/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2445

2403

2495

-50

2494

-49

18

2278

2248

2318

-40

2303

-25

19

2104

2100

2109

-5

2009

+95

20

2057

2071

2050

+7

1783

+274

21

2048

2058

2043

+5

1647

+401

22

-

2085n

-

-15 (M)

1548n (M)

+537 (M)

26

1140n

1126

1143n

-3

1075

+65

28

760

765

745n

+15

768

-8

30

663n

684

636n

+27

584

+79

MC

1100

1114n

1020

+80

1382n

-282

WOOLGROWERS VOTE FOR 1.5%

The recent Woolpoll voting results have finally been released after the closest vote on record. Like most political elections, preferences had to come into play to determine a winner as first-hand results were too close to call between the 2 favoured options, 1.5% and 2%. After the final tally of preferences the 1.5% levy won by 52.5% over 47.5% for the current rate of 2% to be retained. Despite the call for the levy to be held at 2% from AWI, various industry groups lobbied for the lower option despite the forecasted less revenue due to less wool being sold and with less finances coming in putting some projects at risk. The new levy will commence from July 2019.      

For just the 4th time in 13 weeks - since the big rise in mid August - the AWEX EMI took a turn for the better, with a modest 5 cent gain to 1781. Talk of a recovery or the market bottoming out has been in the wings for 2-3 sales now but only came to fruition this sale due mainly to a buoyant XB and carding market. The large volume of dusty, fine and tender types < 19 micron saw these wools lose 35 to 55 cents whereas the odd lot with “good specs” gained 40 to 60 cents. Broader microns managed to hold their ground to finish in sellers’ favour. A much higher acceptance of these current prices by growers saw just 6% of the Sydney fleece catalogue passed-in.

The big movers in the market were in Room 2. Skirtings had an up and down sale as the opening day’s losses of 20 to 30 cents were regained in the closing session to see this sector finish unchanged to sellers’ favour. The big mover was the carding sector. After getting hammered since the record peak of 1563 cents in mid September to last sale’s low of 1020 (a 543 cent collapse – 35%) the 3 centres averaged a 90 cent gain as all types in this sector added 50 to 150 cents to their previous values. Crossbreds were also buoyed by the renewed buyer competition increasing by up to 30 cents.

Could this finally be the bottom of this price cycle? It may well be if all other sectors follow the lead of cardings as a Chinese delegation was here this week and were keen to purchase carding types having been out of the market for several weeks. Also of note was the lift in prices of inferior fleece types by 40 cents late in the final session. The market in Euro terms gained 1.1% even with the ascendency in this currency by 3.5% over the past 3 weeks indicating increased support for the better European types despite China’s absence from the market. Many “good judges” are predicting a dearer market through to Christmas - hope their on the money!!

Ag Concepts Fwd Prices at 16 November 2018

Micron

Date

Low

High

21

5-Dec-18

1990

1990

 
21

22-May-19

1910

1910

Main Buyers (This Week)

1

Techwool

3842

2

Tianyu Wool

3232

3

Endeavour Wool

2641

4

Fox & Lillie

2420

5

Seatech Ind.

2367

6

Aust. Merino

2252

7

PJ Morris

1881

8

Vic. Wool Proc.

1012

9

Kathaytex

825

Eastern Market Indicators (AUD cents/kg clean)

1781 cents é 5 cents compared with 9/11/2018

Northern Market Indicators (AUD cents/kg clean)

1819 cents é 10 cents compared with 9/11/2018

AUD/USD Currency Exchange

0.7273 ê 0.0005 compared with 9/11/2018

9 November 2018

Friday, November 09, 2018

WEEKLY MARKET REPORT

Week Ending 9th November, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S19/18

This Week

M19/18

Last Sale

S18/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2495

2387

2555

-60

2488

+7

18

2318

2207

2377

-59

2283

+35

19

2109

2107

2238

-129

2005

+104

20

2050

2056n

2153

-103

1764

+286

21

2043

2064n

2139

-96

1645

+398

22

-

2100n

-

-69 (M)

1560 (M)

+540 (M)

26

1143n

1119

1189n

-46

1103

+40

28

745n

751

778

-33

815

-70

30

636n

670

661n

-25

616

+20

MC

1020

1045n

1045

-25

1348n

-328

THE END OF AN ERA AT AWI

AWI Chairman, Wal Merriman announced today that he had stood down as Chairman of the company after 13 years in the top job. His decision came just prior to the AGM in two weeks time to allow the incoming Chair, Colette Garnsey, time to prepare for the next busy year. Wal’s contribution has been enormous and one hopes his tenure is remembered as one who steered and guided the company back into marketing and putting wool back on the stage in the world fashion industry. He leaves his position with the company in a strong financial position with a list of many significant achievements for the wool grower shareholders.

It seems nothing at the moment can influence the buyers into a positive change of sentiment as the market lurched further into negative territory. Each region recorded similar losses (74 to 82 cents) as the AWEX EMI retreated to the tune of 78 cents to 1776. In US$ terms the fall was not as severe, a 29 cent fall to 1293 this due the FRX ascending against the A$ by 1.5 cents. Even though falls were across the board, fortunes were reversed from the previous few sales as the < 18.5 micron escaped the bigger losses of their broader counterparts (45 to 70 cents) as 19 and coarser collapsed by 95 to 130 cents - a sign that the gap between the fine and broad microns was too close as in the past few sales the <19 micron have been falling dramatically and broader types not so. Only the very best style lots with good length and strength results escaped the carnage giving up 20/40 cents.

Skirtings also came under the pump as losses across all microns, VM, styles and lengths totaled another 50 to 100 cents. Cardings again copped a caning as some buyers were still sitting on the side-lines as all types in this sector were quoted 60 to 100 cents behind the previous series. Crossbreds took reasonable hits as well with a cut-off point around 26 micron. Finer than this the falls ranged from 50 to 100 cents while coarser types were adjusted down by 20/30 cents.

After last series relatively minor falls talk of the falling market reversing its fortunes was widespread. That was until the FRX shifted in favour of the 3 major wool trading destinations as the A$ jumped and buyers let the market freefall again. Talk is still strong that the market is very close to the bottom.

Ag Concepts Fwd Prices at 9 November 2018

Micron

Date

Low

High

21

23-Jan-19

1980

1980

21 8-May-19  1910 1910 

Main Buyers (This Week)

1

Endeavour Wool

2548

2

Fox & Lillie

2531

3

Tianyu Wool

2411

4

Techwool

2383

5

Seatech Ind.

2094

6

PJ Morris

1823

7

Aust. Merino

1507

8

Michell Aust.

714

9

G Schneider

668

Eastern Market Indicators (AUD cents/kg clean)

1776 cents ê 78 cents compared with 2/11/2018

Northern Market Indicators (AUD cents/kg clean)

1809 cents ê 82 cents compared with 2/11/2018

AUD/USD Currency Exchange

0.7278 é 0.0149 compared with 2/11/2018

2 November 2018

Friday, November 02, 2018

WEEKLY MARKET REPORT

Week Ending 2nd November, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S18/18

This Week

M18/18

Last Sale

S17/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2555

2532n

2582

-27

2454

+101

18

2377

2343

2397

-20

2246

+131

19

2238

2221

2258

-20

1968

+270

20

2153

2141

2175

-22

1713

+440

21

2139

2126

2153

-14

1608

+531

22

-

2169n

-

+4 (M)

1503 (M)

+666 (M)

26

1189n

1210

-

-

1048

+141

28

778

778

795

-17

728

+50

30

661n

700

671n

-10

536

+125

MC

1045

1116n

1143

-98

1289n

-244

NEXT WEEK ... THE RECOVERY??

Hope that the change of fortunes in Fremantle last Thursday could be a trigger for a market recovery were short lived as the falling market accelerated as the sale progressed. All 3 centres recorded double digit losses (20/30 cents) as the AWEX EMI peeled off by another 20 cents (1%) to 1854. Losses were consistent across all microns, 15 to 30 cents as again buyers struggled to cope with the large volume of drought-affected, fine, low yielding and tender types coming onto the market as growers dug their toes in to pass-in 16% of the national fleece catalogue.

The skirting sector was the best performer of any as losses were kept to the barest minimum as all types and descriptions were quoted as “in buyers favour”. Cardings again bore the brunt of buyer resistance as heavy losses over both sale days saw the MCI shed 98 cents in Sydney to 1045, a whopping 518 cents from the record peak of 1563 in early September. Growers were caught out by the magnitude of the losses as the clearance rate was only 73%. Crossbreds also looked to escape the big losses of the past few sales as most microns gave up 10 to 20 cents.

Another tough sale as the market fell but did perhaps mask an underlying change of sentiment as the fall in A$ terms can be somewhat attributed to the ascending FRX, up by 0.75%. The 3 other main currencies (US$, Euro and the Chinese Yuan) that are used in wool trading prices were unchanged to buyers’ favour. Demand was stronger from the outset and the only real problem is still the over-supply of sub 18.5 micron types not suitable for European manufacturers but buyer interest is on the up as the price gap between these and 19s to 21s is only 110 to 160 cents compared to 170 to 230 cents at the market’s peak in August making these finer microns good value when compared to their broader cousins.

These past few sales have demonstrated that “demand is still king” above all else. Factors like supply, FRX and quality all play their part in price determination but demand is the no.1 factor that dictates price movements and, if demand isn’t there, prices will fall no matter how much other factors are or are not in play. The “demand” component that goes all the way to the retailer has manufacturers worried that consumers will be able to afford these dearer price levels for the Northern Hemisphere winter collection which is in stores now.

The shrinking quantity is again in the news as the latest AWTA figures released for October showed a fall of 5.9% from  October, 2017, and the progressive total for the season (July to October) is back by 9.7% (102.7mkg) to 118.8mkg compared to last year. This equates to 93,700 bales less offered this season than last, more than 2 selling weeks. Hopefully the market can take a turn for the better next week!!! 

Ag Concepts Fwd Prices at 2 November 2018

Micron

Date

Low

High

21

28-Nov-18

2130

2130

Main Buyers (This Week)

1

Techwool

3514

2

Fox & Lillie

3064

3

Endeavour Wool

2472

4

Tianyu Wool

2451

5

Seatech Ind.

2407

6

Kathaytex

1758

7

Modiano

1131

8

Aust. Merino

897

9

G Schneider

652

Eastern Market Indicators (AUD cents/kg clean)

1854 cents ê 20 cents compared with 26/10/2018

Northern Market Indicators (AUD cents/kg clean)

1891 cents ê 23 cents compared with 26/10/2018

AUD/USD Currency Exchange

0.7129 é 0.0049 compared with 26/10/2018