Weekly Market Reports


13 July 2018

Friday, July 13, 2018

WEEKLY MARKET REPORT

Week Ending 13th July, 2018

AWEX Northern Micron Indices Comparison

 AWEX INDEX

This Week

S02/18

This Week

M02/18

Last Sale

S01/18

 Sydney Change

   Last Year

    Sydney

Sydney Yearly

Change

17

2793n

2780

2827 n

-34

2196

+597

18

2435

2443

2443

-8

2108

+327

19

2282

2269

2289

-7

1824

+458

20

2242

2246

2261

-19

1607

+635

21

2224n

2239

2251 n

-27

1530

+694

22

2199n

2236

2268 (M)

-32 (M)

1477n

+722

26

1519n

1569n

-

-

1108

+411

28

924

963

964

-40

766

+158

30

683n

684

664

+19

560

+123

MC

1435

1461n

1470

-17

1139n

+296

MARKET A BIT CHEAPER BUT STILL VERY GOOD

This sale was the final before the annual 3 week winter recess. 40,500 bales were on offer nationally down from 43,000 the week before. With just 2 sales done for the year, there is a differential of 13,000 bales fewer compared to last season. The market opened on a cheaper note but falls were not to the extent of the previous series. The market finished the week on a positive note as all fleece indicators clawed back some of the opening day’s losses. The AWEX EMI gave up 13 cents for the sale to finish on 1981. In US$ terms the fall equated to a 9 cent fall to 1462 as the FRX did fluctuate up to 74.75 at one stage before settling at last week’s level. Most microns (17.5 to 20) lost 10 to 20 cents with finer types below 17 and broader microns, 21 and coarser lost 30 cents - a good outcome when compared to the opening sale of the season.
The losses in the skirting sector also slowed considerably when compared to S01. Most types lost 10 to 20 cents bar the limited selection of superior types with < 3% VM that were in buyers’ favour. Cardings also had similar falls to the skirting sector - 10 to 20 cents across the board. Crossbreds had a mixed sale as the finer microns below 28 retreated by up to 40 cents with broader microns dearer by 20 cents.
Not a bad result to end sales as some show floor talk had the market repeating last sale’s falls. Invariably, this was not the case as all participants like to see the market end on a reasonable note before an extended break. The pass-in rate was nearly halved as most brokers took a cautious approach to valuing this sale’s catalogues and we even sold a few passed-in lots from last sale gaining small increases. Even though the market has lost 92 cents over the past 3 sales from the peak of S51 (at 2073) we are still an amazing 30% or 459 cents higher than a year ago. As the table above illustrates, the biggest gains are in the 20/22 micron range averaging a 684 cent leap.  These are incredible rises as buyers have become increasingly concerned about the lack of 80 to 100mm length wool in this micron range with the ongoing drought keeping a lot of sheep in the finer than 20 micron. The other standout micron was 26s, up by 411 cents.

As buyers catch their breath and plan their strategies for Spring they are under no illusions about the drought which is the worst since the early eighties and, in some areas, back to the sixties and the devastating effect on sheep numbers as most growers have cut numbers back to the bare essentials and now the tragic situation of having to offload scanned-in-lamb ewes, surely this rates as a natural disaster and Government intervention at the federal level should happen to save growers’ core breeders. This drought is far from over with the likelihood of easily accessible grain and hay to buy in the spring and summer is ever increasingly further and further away.

Ag Concepts Fwd Prices as at 13 July, 2018

Micron

Date

Low

High

21

10-Oct-18

2120

2120

21

12-Jun-19

1920

1930

 

Main Buyers (this week)

1

Techwool

3632

2

Tianyu  Wool

3418

3

Fox & Lillie

3342

4

Aus. Merino Exp.

3247

5

Endeavour Wool

3101

6

Seatech Ind.

2900

7

Kathaytex  Aus.

2794

8

United Wool

1616

9

PJ Morris

933

Eastern Market Indicators (AUD cents/kg clean)

1981cents ê 13 cents compared with 6/7/2018

Northern Market Indicators (AUD cents/kg clean)

2013 cents ê 13 cents compared with 6/7/2018

AUD/USD Currency Exchange

0.7382 é 0.0005 compared with 6/7/2018


6 July 2018

Friday, July 06, 2018

WEEKLY MARKET REPORT

Week Ending 6th July, 2018

AWEX Northern Micron Indices Comparison

 AWEX INDEX

This Week

S01/18

This Week

M01/18

Last Sale

S52/17

 Sydney Change

   Last Year

    Sydney

Sydney Yearly Change

17

2827 n

2791

2872n

-45

2192

+635

18

2443

2440

2524

-81

2118

+325

19

2289

2286

2368

-79

1845

+444

20

2261

2273

2346

-85

1618

+643

21

2251 n

2272

2334n

-83

1529

+722

22

2268

2336 (M)

-68 (M)

1468 (M)

+800 (M)

28

964

981

1029

-65

759

+205

30

664

675

705

-41

549

+115

MC

1470

1490

1482

-12

1164

+306

SEASON STARTS WITH A DOWNWARD THUD!!

The opening sale of the new season was nothing to crow about as the softer trend to finish the last sale of the ’17 season accelerated to have the AWEX EMI give up 62 cents (3%) to fall below the 2000 cent mark for 5 weeks to 1994. The fall wasn’t as big in US$ terms - 42 cents to 1471 as the A$ remained fairly steady at just below 74 cents. The fall was the largest weekly decline in six years as prices across the entire spectrum fell on both days. By week’s end most microns (17 to 22s) retreated by 45 to 85 cents. Only the very best lots were least affected, down only marginally with the odd lot actually dearer that had the right specs that suited Italian mills. The types that suffered heavier losses contained VM levels above 2%, low nk/t readings and high mid-breaks. Some lots were punished severely, almost neglected, as buyers picked the eyes out of the catalogue with some discounts way above what the losses read on the AWEX report resulting in a 30% pass-in rate in our fleece catalogue - our highest for some years.

Skirtings also took their biggest hit for some time as consistent losses over the 2 selling days had most types pulled back by 50 to 80 cents with > 5%VM affected more than their low VM counterparts with the very odd, better style/low VM type escaping the large losses. Crossbreds had a similar sale to the merino sector, losses ranging from 40 to 65 cents for the 28/30 micron wools with falls for other microns restricted to 20 cents. Cardings were the least affected of any sector as all types and descriptions gave up 10 to 20 cents for the sale.

A tough sale to commence the new selling season as the biggest catalogue since early April had some exporters offside regarding the big increase in quantity. This rise in quantity is a common occurrence as the new financial year ticks over as some growers look to spread their income over the 2 financial years. The increased volume should have been of no surprise to buyers. The rapid rise in the market since Easter (280 cents) may have caught up with the buyers as well. Everyone expected a correction but as to when and how much was the question no-one could answer till now. Another factor was the significant movements of the FRX of the Chinese Renminbi, CNY against the US$ over the past 3 weeks, 7% in favour of the US$ meaning Chinese mills had to find 7% more money to fund their purchases - a bridge too far this week!! Despite the sharp downwards adjustment the market is 470 cents (30%) higher than 12 months ago. Next week is the final sale before the 3 week annual winter recess with 41,000 bales on offer, hopefully the market can hang on??

Main Buyers (this week)

1

Seatech Ind.

4343

2

Fox & Lillie

3649

3

Tianyu  Wool

3483

4

Techwool

3212

5

Aust. Merino

2896

6

Kathaytex  Aust.

2270

7

G Schneider

2088

8

Michell Aust.

1905

9

Endeavour Wool

1657

Eastern Market Indicators (AUD cents/kg clean)

1994 cents ê 62 cents compared with 29/6/2018

Northern Market Indicators (AUD cents/kg clean)

2026 cents ê 62 cents compared with 29/6/2018

AUD/USD Currency Exchange

0.7377 é 0.0020 compared with 29/6/2018