Weekly Market Reports


25 May 2018

Friday, May 25, 2018

WEEKLY MARKET REPORT

Week Ending 25th May, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S47/17

This Week

M47/17

Last Sale

S46/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2834n

2888n

2786n

+48

2265

+569

18

2501

2495

2437

+64

2148

+353

19

2261

2281

2204

+57

1891

+370

20

2193

2202

2143

+50

1590

+603

21

2186n

2189

2128

+58

1477

+709

22

2174n

2185

2115n

+59

1419n

+755

26

1438

1431n

1396n

+42

1045n

+393

28

999

995

1009

-10

755n

+244

30

695

716

703

-8

563n

+132

MC

1449n

1491n

1422

+27

1180n

+269

CAN THE EMI CRACK 2000???

The market kept marching towards new records this sale as the AWEX EMI closed in on the 2000 cent mark finishing this series at 1983, a 40 cent appreciation from last sale. The rise was just as good in US$ terms gaining 39 cents to 1501 as the FRX swayed in the 75 cent range all week - this morning at 75.70 cents. A few buyers thought the frantic rises over the past 2 weeks would steady to have a market that could be slightly cheaper given the rapid rises we have seen. That wasn’t the case as the market had similar gains on both days to see all microns add 50/70 cents regardless of style, yield or VM.

Skirtings weren’t to be outdone either as all types and descriptions were rock solid with 18/19 micron up to 5% VM lifting by 30 to 40 cents. Cardings kept up with the combing sector of merinos with the 3 centres averaging 30 cent rises as all types added 20 to 40 cents to their previous values as the only weeks the MCIs have been higher was the pre-Christmas sale and the 2 opening sales in January. Crossbreds kept the same pattern as the few previous sales, < 26 micron up to 40 cents dearer, 28s and broader 10 cents off the pace.

Another record breaking sale as 17.5 to 22s are at all-time record levels. The EMI is 33% (488 cents) higher than a year ago and a massive 691 cents (53%) better than this time 2 years ago. Since Easter the EMI has rallied by 211 cents. All the talk is about quantity, the lack of it now and the looming tighter supply in the spring and into next year as the crippling drought gives no signs of letting up. The past 3 sales and the next 3 will see an average of just 32,000 bales/week, far below the quantity needed to supply the current levels of demand. This week and next has Fremantle holding 1 day sales then missing a sale to add to exporters’ woes about supply. The highlight of the recent gains has been the 19.5 and coarser microns as the gap between 19 and 22 is averaging 95 cents across the 3 centres - the gap at Easter was 180 cents.

Can the demand be maintained and higher costs passed down the pipeline all the way to the retailer?? The short term answer might be yes but long term, “who knows”. Plenty of growers heard the country hour interview where one Chinese processor was very confident through till spring and word from some fine wool processors that all is good in the sub 19 micron sector. Just 31,000 bales up next week. Will the EMI crack 2000 cents??                   

                        Ag Concepts Fwd Prices as at 25 May, 2018

Micron

Date

Low

High

21

27-Jun-18

2080

2080

21

26-Aug-18

1920

1945

21

10-Oct-18

1900

1900

 

Main Buyers (this week)

1

Techwool

3821

2

Fox & Lillie

3727

3

Seatech Ind.

2975

4

Aust. Merino Exp.

2572

5

Kathaytex Aust.

2176

6

Endeavour Wool

2027

7

Tianyu

1646

8

PJ Morris

1567

9

Modiano

1412

Eastern Market Indicators (AUD cents/kg clean)

1983 cents é 40 cents compared with 18/05/2018

Northern Market Indicators (AUD cents/kg clean)

2033 cents é 38 cents compared with 18/05/2018

AUD/USD Currency Exchange

0.757 é 0.0043 compared with 18/05/2018


18 May 2018

Friday, May 18, 2018

WEEKLY MARKET REPORT

Week Ending 18th May, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S46/17

This Week

M46/17

Last Sale

S45/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2786n

2800n

2771n

+15

2354

+432

18

2437

2427

2389

+48

2219

+218

19

2204

2215

2154

+50

1942

+262

20

2143

2154

2074

+69

1628

+515

21

2128

2138

2044

+84

1499

+629

22

2115n

2114

-

+96 (M)

1441n

+674

26

1396n

1389n

1344

+52

1049

+347

28

1009

1006

999

+10

763

+246

30

703

714

703

0

570

+133

MC

1422

1448n

1397n

+25

1176

+246

MARKET HEADS TOWARDS THE STRATOSPHERE!

There was absolutely no hint of a correction this week as the wool market went on another upward trajectory similar to last series. The AWEX EMI added 52 cents to its value to smash through the 1900 cent mark to finish the sale at 1943, yet another all-time record. In US$ terms the gains were much the same - a 49 cent rise to 1462 (its highest level in 7 years) as the FRX did move around a bit, at one stage dropping to below 74.5 cents then regaining some ground to 75.25 this morning. They are now referring to this extended period of gains as a “super-cycle” that has lasted 112 weeks outdoing the raging market in the late 1980s. Most merino fleece types added 35 to 85 cents with no wools neglected (just 1% passed in) as 18 to 22 micron are now in all-time record territory in the 3 centres.

Skirtings also took a quantum leap as < 18 micron skyrocketed by 90/100 cents with the 19s and broader 60 cents to the good as buyers almost completely disregarded faults like colour, cott or VM.  Cardings took their lead from the other merino sectors as all types in this category lifted by 15 to 40 cents to have all 3 regional MCIs above 1400 cents. Crossbreds had a relatively quiet sale bar 26 micron which jumped by 50 cents, others up to 10 dearer as 26s and 28 micron re-write the record books with new highs.

No-one could have anticipated the rises of the past few sales as the growers lucky enough to have wool in the last 3 weeks have benefitted from a “buying frenzy”.  Can it keep going, when/if the correction will come and how big will that correction be??? These were hot topics of discussion at the 87th Congress of the International Wool Textile Organisation in Hong Kong this week. A plethora of items were on the table from drought and supply concerns in Australia (notably NSW) and foreseeable low levels of production for the next 2 years to the demand side - global economic conditions are very good with consumer confidence levels still very high. The recent survey of wool textile conditions from IWTO is positive right through the industry. Retail and online sales have risen in China by 8 and 22% with an ever-increasing emphasis on sustainability. Also a good session was “wool’s contribution to wellness” the benefits of wool’s impact on human skin health, especially babies. Next sale’s roster drops even lower to 32,000 bales. Where to for the market, who knows???

                   Ag Concepts Fwd Prices as at 18 May, 2018

Micron

Date

Low

High

21

6-Jun-18

2005

2005

21

29-Aug-18

1900

1955

21

24-Oct-18

1860

1860

 

     Main Buyers (this week)

1

Techwool

5407

2

Fox & Lillie

5000

3

Kathaytex Aust.

2887

4

Aust. Merino Exp

2622

5

Seatech Ind

2472

6

Tianyu

2292

7

PJ Morris

1846

8

Modiano

1769

9

Endeavour Wool

1559

Eastern Market Indicators (AUD cents/kg clean)

1943 cents é 52 cents compared with 11/05/2018

Northern Market Indicators (AUD cents/kg clean)

1995 cents é 55 cents compared with 11/05/2018

AUD/USD Currency Exchange

0.7527 é 0.0050 compared with 11/05/2018

11 May 2018

Friday, May 11, 2018

WEEKLY MARKET REPORT

Week Ending 11th May, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/17

This Week

M45/17

Last Sale

S44/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2771n

2583n

2752n

+19

2354

+417

18

2389

2241

2345

+44

2223

+166

19

2154

2105

2086

+68

1939

+215

20

2074

2072

1980

+94

1630

+444

21

2044

2048

1964

+80

1506

+538

22

-

2018

1946n

+63 (M)

1420n (M)

+598 (M)

26

1344

1330n

1341n

+3

1043

+301

28

999

999

998

+1

768

+231

30

703

706

708

-5

588

+115

MC

1397n

1426n

1377

+20

1171n

+226

RECORD BOOKS REWRITTEN – AGAIN!!

History again looked to repeat itself as all participants on the Eastern seaboard are keen watchers as to where the market in Fremantle finishes. Given the 2 hour time difference sales are well and truly done with here and, more often than not, how the market ends in the west is a guide as to which way the market will track here the next day. It was a welcome surprise to see Fremantle finish so strongly last Thursday and was just a sign of things to come as markets exploded into action on Wednesday as records were smashed. By week’s end all 3 centres made massive gains with fleece indicators climbing by 40 to 90 cents. The AWEX EMI set new daily and weekly records adding 55 cents to 1891, 23% higher than 12 months ago. The regional Indicator in the west is an incredible 2018 cents. 20 to 23 microns are at record highs as all types, regardless of yield, VM or strength were swept up in the scramble to secure quantity in most cases not worrying about faults.

Skirtings also benefitted from the supply squeeze as all types across all microns and VM levels posted gains of 50 to 60 cents. Cardings also were caught up in the buying frenzy as the 3 selling centres recorded double digit rises and the 3 MCIs are averaging 1410 cents across the country as all types in this sector rose by 15 to 30 cents. Crossbreds took a breather this sale as 28s and finer were in sellers’ favour with 30 micron and broader up to 5 cents off the pace.

A great sale to be in as there was no real indication that the market was going to rise in the fashion that it did. Futures trades pointed to a dearer market but nothing to the extent of the gains from the opening lot on Wednesday. The forecasts of a drop in the supply of wool not only in the short term but well into next year due to the state-wide drought in NSW and reduction in sheep numbers and the best FRX in a year (as the A$ sits well below 75 cents - 74.75 this morning) looked to be the catalyst for the renewed buyer activity as some lots were bought without limits and mills have virtually no wool in front of machinery waiting to be processed as hand-to-mouth operations have been the standard practice for some time.

Where to from here - that is the million$ question. The EMI, all regional indicators, 20 to 23 micron and 26s are at record levels and most merino microns at 5 year highs so for the market to keep improving would be quite the scenario given the climatic conditions affecting the quality of the clip and processors’ ability to pass on the higher costs. Next sale’s quantity is similar to this series. Will there be a correction, who knows??? 

           Ag Concepts Fwd Prices as at 11 May, 2018

Micron

Date

Low

High

Micron

Date

Low

High

21

27-Jun-18

1960

1960

21

24-Oct-18

1800

1830

21

22-Aug-18

1880

1880

21

13-Feb-19

1700

1700

      

Main Buyers (this week)

1

Techwool

5277

2

Fox & Lillie

5133

3

Aust. Merino Exp

2747

4

PJ Morris

2544

5

Seatech Ind

2375

6

Modiano

2030

7

Endeavour Wool

1893

8

Lempriere

1666

9

Kathaytex Aust.

1534

Eastern Market Indicators (AUD cents/kg clean)

1891 cents é 55 cents compared with 4/05/2018

Northern Market Indicators (AUD cents/kg clean)

1940 cents é 48 cents compared with 4/05/2018

AUD/USD Currency Exchange

0.7477 ê 0.0044 compared with 4/05/2018


4 May 2018

Friday, May 04, 2018

WEEKLY MARKET REPORT

Week Ending 4th May, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/17

This Week

M44/17

Last Sale

S43/17

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

2752n

2712n

2763

-11

2382n

+370

18

2345

2346

2361

-16

2251

+94

19

2086

2086

2105

-19

1967

+119

20

1980

1989

2005

-25

1660

+320

21

1964

1970

1969

-5

1540

+424

22

1946n

1955

-

-1 (M)

1454n

+492

26

1341n

1326n

1343

-2

1044n

+297

28

998

989

993

+5

763

+235

30

708

706

743

-35

585n

+123

MC

1377

1390n

1379n

-2

1169

+208

MARKET MARKS TIME EVEN WITH LOWER DOLLAR

The cheaper trend in Melbourne and Fremantle last Thursday put fear into wool growers selling in this sale that the market might soften. They were spot on. An opening cheaper session in all 3 centres saw last week’s gains disappear but, in an encouraging sign on Thursday, markets looked to have leveled on the eastern seaboard and Fremantle’s fortunes were completely reversed from the opening day as they recaptured all their losses to have most MPGs firm to 20 cents dearer by the end of the sale. By week’s end results were mixed here and in Melbourne as all indicators < 20 micron were 10 to 35 cents off with broader types in buyers’ favour in Sydney and finer < 18.5 mostly dearer in the south and others either side of unchanged. The AWEX EMI gave up 10 cents for the sale to 1836. The move in US$ terms was minimal as well - 17 cents back to 1381. The FRX dipped to its lowest point since last June to 74.94 cents on Wednesday but did not assist the market - the A$ now at its lowest point (75.20 cents) almost 3 cents below its recent peak of 78.08 just 2 weeks ago.

Skirtings also came under some pressure as, like their fleece counterparts, only the very best fine and low VM types (< 3%) held their ground or made a slight advancement as the > 5% VM types were irregular but most looked 10/20 cents cheaper. Cardings also had a mixed sale with the MCI drifting back by 2 cents to 1377. Finer LKS and STN were in sellers’ favour, broader LKS off by 10 while CRT remained unchanged. Crossbreds took a breather from their frantic rises over the past 5 sales as < 28 micron remained solid with 30s and broader 20 to 35 cents cheaper.

The market movements were minimal this week as a low point in the FRX for 12 months couldn’t persuade buyers to step in and secure the ever decreasing volumes coming onto the market. The quality of the offering is still  the biggest factor influencing price direction which was the talking point and how to average these wools into orders that fit mills’ specifications is becoming more and more difficult as the “good“ wools become scarcer and burrier/dusty types are turning up to brokers’ stores literally by the truck load. The quality of the selection did improve marginally this sale but not enough to push prices up. The lift in prices in Fremantle yesterday could have been quality related but the eastern seaboard growers are hoping this will follow suit next week with national quantities averaging 36,000 for the next 3 sales.

              Ag Concepts Fwd Prices as at 4 May, 2018

Micron

Date

Low

High

21

22-Aug-18

1840

1855

21

24-Oct-18

1740

1740


   Main Buyers (this week)

1

Fox & Lillie

5061

2

Tianyu

3691

3

Lempriere

3665

4

Techwool

3088

5

PJ Morris

2905

6

Seatech Ind

2485

7

Modiano

2440

8

Aust. Merino Exp.

2361

9

Kathaytex Aust.

2064

Eastern Market Indicators (AUD cents/kg clean)

1836 cents ê 10 cents compared with 27/04/2018

Northern Market Indicators (AUD cents/kg clean)

1892 cents ê 16 cents compared with 27/04/2018

AUD/USD Currency Exchange

0.7521 ê 0.0052 compared with 27/04/2018