Weekly Market Reports


23rd February 2018

Friday, February 23, 2018

WEEKLY MARKET REPORT

Week Ending 23rd February, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S34/17

This Week

M34/17

Last Sale

S33/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2793n

2745n

2785

+8

2093

+700

18

2389

2383

2390

-1

2017

+372

19

2153

2145

2131

+22

1806

+347

20

2017

2014

1971

+46

1562n

+455

21

1927

1918

1878

+49

1442n

+485

22

1886n

1865

1849n

+37

-

-

26

1128

1123n

1111

+17

933n

+195

28

798

801

793

+5

704

+94

30

593

591

590

+3

546n

+47

MC

1348

1327n

1360

-12

1190

+158

CLOSING IN ON A NEW RECORD AGAIN

The fears of the Chinese New Years holiday adversely affecting the wool market were allayed as modest increases over the series had the AWEX EMI reverse last sales losses to record an 8 cent rise to 1820 to be within a whisker of Januarys all time high. As the FRX moved in favour of the A$ by over a cent to below 78 cents on Thursday, this caused the EMI to lose 17 cents in US$ terms to 1417 cents. All medium microns-18.5 to 22s and 16.5- benefitted most from the renewed buying activity (spurred on by the FRX) adding 20 to 50 cents to their previous values while 17 to 18s were 10/15 cents higher. One factor worth noting is the amount of high VM in fleece wools coming onto the market. FNF types now are just over 50% of the offering making these lots more desirable to buyers as they try to keep averaging 1% VM in their orders. 

Skirting’s had a mixed sale as finer low VM types - <18.5 micron and below 5% VM - bore the brunt of big losses, 50/70 cents while all other types held their ground. Cardings couldn’t maintain last sales modest rises. The 3 centres lost ground, Sydney by 12 cents and Melbourne/Fremantle by 28 and 29 cents. Locks were the biggest casualty, cheaper by 40 to 50 cents while all other types in this sector gave up 10 cents. For the 3rd sale running XB’s edged higher. Increases ranged from 5 cents for the broader microns-28 to 32- to 15/25 cents for 26s and finer.

The activity and price pressure in trading wool and manufacturing for the past few years now has been ruled by the growing demand. With this price escalation comes finance pressure to be able to continually fund purchases, eg: a full container (108 bales) of merino fleece wool is costing over $300,000. The FRX rate are also playing a part and becomes more critical when demand and prompt business is not apparent or if exporters are reticent to book firm contract and buying is done on indents and in US$.

AWI CEO Stuart McCullough has written to all AWI share holders with the latest developments on WoolQ- previously “Wool Exchange Portal” inviting growers to register. Various functions will be delivered over the next 12 months, starting with an Electronic Speci. Some brokers already offer similar services as far as down-loading speci’s from their websites. AWEX is also developing their own version. With the solid market national quantities have grown to 44,500 bales for next week, up by 14% in 7 days, with all buyers back in full buying mode. We sell late on Wednesday with 959 on offer.     

                                                Ag Concepts Fwd Prices as at 23 February, 2018

Micron

Date

Low

High

18

23-May-18

2245

2245

19

23-May-18

2090

2100

Main Buyers (this week)

1

Techwool

6148

2

Fox & Lillie

4876

3

Seatech Ind.

2835

4

PJ Morris

2544

5

Aust. Merino Exp.

2189

6

Endeavour Wool

2126

7

Tianyu

1640

8

Kathaytex (VIC)

1157

9

Kathaytex Aust.

997

Eastern Market Indicators (AUD cents/kg clean)

1820 cents é 5 cents compared with 16/02/2018

Northern Market Indicators (AUD cents/kg clean)

1902 cents é 5 cents compared with 16/02/2018

AUD/USD Currency Exchange

0.780 ê 0.0076 compared with 16/02/2018

16th February, 2018

Friday, February 16, 2018

WEEKLY MARKET REPORT

Week Ending 16th February, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S33/17

This Week

M33/17

Last Sale

S32/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2785

2707

2815

-30

2089

+696

18

2390

2352

2428

-38

2008

+382

19

2131

2119

2165

-34

1789

+342

20

1971

1959

1999

-28

1541

+430

21

1878

1887

1893n

-15

1436

+442

22

1849n

1844n

-

-

1376n

+473

26

1111

1116n

1098n

+13

928

+183

28

793

796

791

+2

685

+108

30

590

589

603

-13

543

+47

MC

1360

1355n

1356

+4

1175n

+185

HAPPY CHINESE NEW YEAR – HOPEFULLY!!

The few records that were set in the last series for the Sydney Indicator (1909) and most fleece indicators couldn’t be maintained as the AWEX EMI gave up just 6 cents to 1812. In US$ terms the numbers appreciated by 14 cents to 1437 due the AU$ rising by over 1 cent to 79.30 against the US$. All the damage was done in the fleece sector as all MPGs lost some of last sale’s big gains. The largest fall was 17.5s, peeling off by 60 cents with all others reducing by 25 to 40 cents bar 16.5 and 21s. Their losses were 15 cents with broader microns solid.

Skirtings had a reasonable sale as the finer micron, low VM types (< 18 & 5%) looked just in sellers’ favour with the burrier lots irregular to finish a touch cheaper - growers accepting these great levels with just 14 bales unsold. After last sale’s big lift XBs were still on the buyers’ radar to record modest gains of up to 15 cents except 30 micron back by 10 cents. Cardings also looked to be in good demand as all types were solid to 10 cents better for LKS with some LMS extreme.

Most buyers took stock of the rapid elevation of the market last week to be a bit more selective with their purchases. The appreciation in the AU$ put paid to any further advancements for merino fleece types, bar lots with exactly the right specs that were solid to dearer as these wools become scarcer and lots with higher VM and mid-breaks grow in numbers and are harder to place and are receiving increased discounts. For the 2nd time since Christmas the EMI has peaked in the 1820s but unable to go any higher suggesting this may be the top level for the moment but the underlying demand factor is still outweighing supply. Latest data on retail sales of clothing in eight of the major wool consuming countries shows sales rose in 5 of those countries in 2017 from 2016. Also from the big 8 countries (US, UK, France, Italy, Germany, China, Japan & Sth Korea) consumer confidence is on the rise, at its highest level since 2000, a massive indicator that spending  will rise and clothing will be on consumers’ wish lists. As demand has increased wool exports from the 5 major exporting countries is up by 11% for the opening 6 months of this financial year, Chinese purchases are up by 16% for the same time with Italy, Czech Republic and UK to the good by 7 to 9%. As the Chinese New Year looms, price shifts should be minimal as local buyers and non Chinese mills set the pace.

Ag Concepts Fwd Prices as at 16 February, 2018

Micron

Date

Low

High

21

14-Mar-18

1840

1840

21

16-May-18

1820

1820

Main Buyers (this week)

1

Techwool

5162

2

Fox & Lillie

4029

3

Seatech Ind.

3009

4

Aust. Merino

2605

5

PJ Morris

2488

6

Endeavour 

1975

7

West Coast 

1896

8

Kathaytex (Vic)

1661

9

Modiano

984

Eastern Market Indicators (AUD cents/kg clean)

1812 cents ê 6 cents compared with 9/02/2018

Northern Market Indicators (AUD cents/kg clean)

1893 cents ê 16 cents compared with 9/02/2018

AUD/USD Currency Exchange

0.7929 é 0.0104 compared with 9/02/2018

9 February 2018

Friday, February 09, 2018

WEEKLY MARKET REPORT

Week Ending 9th February, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S32/17

This Week

M32/17

Last Sale

S31/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2815

2761n

2705

+110

2080

+735

18

2428

2373

2330

+98

2002

+426

19

2165

2144

2090

+75

1795

+370

20

1999

1987

1901

+98

1562

+437

21

1893n

1891

1789

+104

1449

+444

22

-

-

1720n

-

1398n

-

26

1098n

1108n

1039n

+59

909

+189

28

791

785

718

+73

667

+124

30

603

576

542

+61

531n

+72

MC

1356

1328n

1300n

+56

1162

+194

WALL STREET CRASHES – WOOL MARKET RISES!

The market exploded into action this sale as futures trading early in the week indicated a rise in the market as they looked 20 to 40 cents higher than the last trades executed late on Friday. This author’s bold prediction of solid gains across the board were swamped as the opening days action saw sub 17.5 skyrocket by 100/120 cents as broader microns added 50 to 75 cents. The 2nd day of sales saw subtle increases of 10 to 50 cents to see the AWEX EMI crash through the 1800 cent barrier for the third time since sales resumed (1818). The shift in US$ terms wasn’t as extreme (+24 to 1423) due to the favourable FRX, a 7 day decline of over 2.5 cents to 77.94 this morning. As is the case in a market like this discounts for COL, TDR and high mid-breaks shrunk and premiums for best top-making, spinners style and better types become larger as buyers focused completely on quantity. Just 52 bales of fleece were passed-in in Sydney, a clearance of 99.2%.

Skirtings were also swept up in the buying frenzy as gains of 50 to 120 cents were commonplace with the ultra-fine selection < 3% VM 150 cents to the good. Only 9 bales failed to sell - 99.6% sold!! Cardings reversed last series’ falls and went some way to recoup the collapse of 2 weeks ago. The MCI in Sydney leapt by 54 cents as the Melbourne and Fremantle indicators jumped by an average of 110 cents. The XB market continues to confuse all and sundry as it also posted large gains, 50 to 75 cents across all microns as 26s are now the only micron behind levels that were reached after the opening sale’s jump a month ago.

The 80 cent jump in the EMI is the biggest weekly increase in seven years and the opening day’s 70 cent rise was the largest daily increase also since January, 2011. At 1818 we are just 4 cents shy of the record set on Tuesday 16th, January before the 5 sessions of losses. As it stands now 18s and finer and 20/21 micron are at record levels and 18.5 to 19.5s just a whisker from setting new records. The impetus for the accelerating market came on the back of a couple of reasons: new business was written and orders were to be filled promptly, the FRX depreciated against all our major wool buying countries and forecast volumes were not going to be enough to cover increasing demand. The long anticipated Wall St correction didn’t have any impact on the wool market. The national catalogue climbs back above 40,000 bales next week (43,000).

Ag Concepts Fwd Prices as at 9 February, 2018

Micron

Date

Low

High

21

18-Apr-18

1780

1780

21

30-May-18

1750

1750

21

26-Sep-18

1620

1620

Main Buyers (this week)

1

Techwool

7397

2

Fox & Lillie

4547

3

Aust. Merino

2741

4

Endeavour 

2345

5

PJ Morris

2060

6

Lempriere

1982

7

Seatech Ind.

1911

8

Tianyu Wool

1437

9

West Coast 

900

Eastern Market Indicators (AUD cents/kg clean)

1818 cents é 80 cents compared with 2/02/2018

Northern Market Indicators (AUD cents/kg clean)

1909 cents é 80 cents compared with 2/02/2018

AUD/USD Currency Exchange

0.7825 ê 0.0223 compared with 2/02/2018

2 February 2018

Friday, February 02, 2018

WEEKLY MARKET REPORT

Week Ending 2nd February, 2018

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S31/17

This Week

M31/17

Last Sale

S30/17

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2705

2677n

2684

+21

2038

+667

18

2330

2318

2345

-15

1971

+359

19 

2090

2086

2101

-11

1752

+338

20

1901

1913

1900

+1

1549

+352

21

1789

1798

1785

+4

1438

+351

22

1720n

1728

1723n

-3

1377n

+343

26

1039n

1049n

1046

-7

903

+136

28

718

731

735

-17

655

+63

30

542

539

550

-8

544

-2

MC

1300n

1228n

1334n

-34

1158n

+142

MARKET STABILISES – SHORT TERM OUTLOOK GOOD

History shows that after such a tough sale like last week, the market stabilises or even rebounds and, again, this was the case. The AWEX EMI slipped by just 6 cents to 1738 and by the barest of margins (1 cent) in $US terms to 1399 as cardings and medium fleece microns (18s to 19.5) took the brunt of the falls. A cheaper opening session was followed by renewed buyer interest on the final day to see most losses cut in half by the end of the sale. As has been the case since Christmas, sub 17.5s continued to improve adding 10 to 30 cents to their values - a nice tune-up for the designated super-fine sale next week. 18 to 19.5 micron continued their slide by 10 to 25 cents whereas 20s and broader were unchanged.

The skirting catalogue followed a similar pattern to the fleece types. An opening cheaper session led to the sale ending on a firmer note to be around 20 cents off for the week for < 5% VM with higher VM lots irregular. Cardings are still to find their level as overall losses averaged 40 cents for the 3 centres as most types in this sector gave up 40/50 cents. The crossbred market was cheaper by 10 to 20 cents for 26 to 30 micron, solid for the finer microns and 32s up by 10 - good news after last sale’s big losses.

A good sale considering the pasting XBs and Cardings took last week as the market looks to have found a level according to showfloor talk this morning. As the above table illustrates, all microns are well ahead of the same week 12 months ago, bar 30 micron. Whilst China was cautious early in the series, other countries stepped in at the lower levels to execute some inventory purchasing but, by the final day, China joined the fray to see the market regain some losses. In the ultra-fine sector (< 16.5 micron) competition was fierce as a high quality mill in China out-bid some Italian orders to push these types higher by 160 cents. The improvement in the final session could be a precursor for the next few sales as demand and enquiry ramped up on Wednesday night and this morning as volume pressure could be a factor. The next 3 weeks will be flat out to average 40,000 bales.  This is in contrast to the latest testing figures for January that show 14% more wool tested than Jan., 2017, and is 3% ahead of last season - 213.7mkg to 207.3mkg. We sell late on Thursday with 925 bales on offer.                       

Ag Concepts Fwd Prices as at 2 February, 2018      

Micron

Date

Low

High

21

7-Feb-18

1750

1750

21

11-Apr-18

1730

1730

Main Buyers (This Week)

1

Techwool

4625

2

Fox & Lillie

3552

3

Endeavour Wool

2792

4

Aust. Merino

2474

5

Kathaytex (Vic.)

2317

6

PJ Morris

2209

7

Lempriere

2003

8

Tianyu Wool

1986

9

Seatech Ind.

1865

Eastern Market Indicators (AUD cents/kg clean)

1738 cents ê 6 cents compared with 26/01/2018

Northern Market Indicators (AUD cents/kg clean)

1829 cents ê 16 cents compared with 26/01/2018

 AUD/USD Currency Exchange
0.8048 é 0.0020 compared with 26/01/2018