Weekly Market Reports


31 August 2018

Friday, August 31, 2018

WEEKLY MARKET REPORT

Week Ending 31st August, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week 

S09/18 

This Week 

M09/18 

Last Sale 

S07/18 

Sydney 

Change 

Last Year 

Sydney 

 Sydney Yearly  

Change

17

2968   

2924   

2917

+51   

2315   

+653   

18

2651   

2639   

2617

+34   

2186   

+465   

19

2418   

2426   

2393   

+25   

1838   

+580   

20

2311   

2302   

2303   

+8   

1643   

+668   

21

2286   

2283   

2280   

+6   

1598   

+684   

22

-   

2282   

2259n   

+17 (M)   

1516 (M)   

+766 (M)   

26

1489   

1548n   

1489n   

0   

1125   

+364   

28

965   

980   

930n   

+35   

848   

+117   

30

731n   

719   

-   

+8 (M)   

628 (M)   

+91 (M)   

MC

1560

1592n   

1526   

+34   

1086n   

+474   

MARKET PLEASES GROWERS AND BUYERS

The wild swings of the past fortnight weren’t evident this series as a much more measured approach to buying was on display. This week saw the opening “designated superfine sale” of the season. The superior style, sub 19 micron selection in Sydney that had attracted wools from WA and VIC was well received by the exporters as both days saw steady rises for the finer, better style types. By week’s end the 18 and finer indicators added 35 to 50 cents, 18.5/19s gained 25 cents and 20s and broader, although in short supply, weren’t neglected to finish in sellers’ favour by up to 10 cents.  As is the case when a larger volume of these superior types hit the market, the Italian buyers come to the fore with premiums on some lots up to 150 cents higher than the indicator, as both days had a total clearance in both rooms of 98.4%. The Northern Regional Indicator added 28 cents to finish at 2145. The EMI added 22 cents to finish the sale at 2090. The fall in the FRX did no harm either falling to 72.65 cents on Thursday night, back by 0.80 of a cent from last Friday.
Skirtings also benefitted from the superior style selection on offer to have increases for both selling days for a combined rise of 50 to 70 cents for < 19 micron and below 5%VM. All other broader and burrier types were quoted as fully firm. Cardings continued on their merry way as double digit gains over the 2 days saw the MCI lift by 34 cents to 1560 cents. LKS and CRT led the charge with advancements of 40 to 50 cents with STN in sellers’ favour. Crossbreds turned last sale’s cheaper trend to the good as the finer end (< 28micron) looked solid with the 28 and coarser types dearer by 20 to 35 cents.
National totals rose to 35,000 bales as Fremantle rejoined the selling roster after a week’s recess but all things didn’t go to plan as the Melbourne sale scheduled for Thursday was postponed till this morning due to the massive fire in a shed next door (an old woolstore) to the Brooklyn wool stores that started yesterday morning but, although contained, could still burn well into next week. Black plumes of smoke from asbestos and wool grease could be seen as far away as Geelong.
A good sale as the excellent selection (in Sydney) and favourable FRX movements helped the market appreciate into positive territory. Another factor could be the release of consumer confidence figures in major wool consuming countries. In the US the figure is just below the peak of April and the highest since 2000. This is the same for the European Union, China and Japan but surprisingly confidence has waned in Sth Korea.

The National Ram Sale was held in Dubbo this week. In what might be (but hopefully not) a disturbing trend just 56% of the rams offered were sold. Honors went to the South Australian stud, Orrie Cowie, with a top price of $22,000 bought by the Brumpton family in QLD. A national catalogue of 38,000 bales is on offer next week - a repeat of this series would be good!!

                        Ag Concepts Fwd Prices as at 31 August, 2018

Micron

Date

Low

High

21

14-Nov-18

2175

2175

 

Main Buyers (this week)

1

Techwool

4464

2

Seatech Ind.

3336

3

Fox & Lillie

3013

4

Tianyu

2736

5

Kathaytex Aust.

2679

6

Modiano

1893

7

PJ Morris Wool

1771

8

Lempriere

1700

9

Michell Aust.

1231

Eastern Market Indicators (AUD cents/kg clean)

2090 cents é 22 cents compared with 24/8/2018

Northern Market Indicators (AUD cents/kg clean)

2145 cents é 28 cents compared with 24/8/2018

AUD/USD Currency Exchange

0.7252 ê 0.0092 compared with 24/08/2018

24 August 2018

Friday, August 24, 2018

WEEKLY MARKET REPORT

Week Ending 24th August, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S08/18

This Week

M08/18

Last Sale

S07/18

Sydney Change

Last Year

Sydney

Sydney Yearly

Change

17

2917

2915

3007

-90

2274

+643

18

2617

2589

2682

-65

2169

+448

19

2393

2386

2465

-72

1862

+531

20

2303

2291

2376

-73

1663

+640

21

2280

2269

2341

-61

1640n

+640

22

2259n

2265

-

-98 (M)

1532 (M)

+733

26

1489n

1538n

1507

-18

1149n

+340

28

930n

970

944

-14

883n

+47

30

-

711

736 (M)

-25 (M)

660 (M)

+51(m)

MC

1526

1534n

1515

+11

1102

+424

ERRATIC UPS AND DOWNS FRUSTRATE GROWERS

The fickle and erratic nature of the wool market has been no more evident than over the past 2 sales. After the sky-rocketing ascendency of prices last sale (the largest weekly rise in 16 years) the market retreated almost as rapidly on the opening day of this week’s sale. It was a market of 2 complete contrasts from buying wool like there was “no tomorrow” in sale 7 to drawing bids from exporters this week was like “pulling teeth”!! The market collapsed from the opening lot. Losses ranged from 35 to 90 cents in the opening session to a day of consolidation to end the series where 19.5/20 micron were the only microns to suffer as all microns retreated by 60 to 95 cents for the week. By week’s end the AWEX EMI gave up 48 cents to fall back to 2068. As the FRX appreciated for its low point of 72.55 a week ago to mid 73 cents, this saw the EMI fall just 18 cents in US$ terms to 1519. No micron or type was immune from the massive change in buyer sentiment as discounts for faults opened up to excessive levels as some good spec types did perform well, outdoing their indicators by up to 40 cents but some lots were well shy of their value (100 to 150 cents clean) as we passed-in 33% of our fleece offering.
Skirtings followed a similar pattern to the fleece wools - an opening session fall of 30 to 40 cents for all types and styles regardless of VM, colour or other faults only to finish the sale on a solid note. Cardings were the only sector to end the sale in positive territory, the MCI up by 11 cents to 1526 due to LKS and CRT going ahead by 10 to 40 cents. We had a line of LKS from Tottenham make an incredible 1158 cents (1812 cents clean). Crossbreds were also caught up in the negative tone as losses ranged from 15 to 25 cents.

The rapid descent of the market after the vertical rises of the previous sale caught growers and brokers by surprise as no-one was talking of a correction let alone the magnitude of this week’s fall. Quantity was vastly reduced as only the 2 east coast centres were in operation with 29,700 bales on offer and the lift in the FRX wasn’t considered to be a factor in market movements. The Australian Wool Production Forecasting Committee met and has reviewed its forecast for the 2018/2019 season. After considering industry data and seasonal conditions the committee now predicts shorn wool production at 320mkg – a drop of 5.7% since its April forecast. This may force buyers to supply-driven pricing rather than demand-driven expectations. More volatility like the past 2 sales could become commonplace. Some good judges think medium microns, 19s and broader, have conquered their Everest but finer types < 19 micron may still improve; only time will tell. Fremantle rejoins the selling roster next week with just 35,000 bales on offer.

                                    Ag Concepts Fwd Prices as at 24 August, 2018

Micron

Date

Low

High

21

19-Sep-18

2280

2280

 

 

           Main Buyers (this week)

1

Seatech Ind.

2955

2

Fox & Lillie

2650

3

Techwool

2455

4

Aust. Merino

2227

5

Kathaytex

2182

6

Lempriere

1618

7

Tianyu

1583

8

PJ Morris Wool

1361

9

New Eng. Wool

1304

Eastern Market Indicators (AUD cents/kg clean)

2068cents ê 48 cents compared with 17/8/2018

Northern Market Indicators (AUD cents/kg clean)

2117 cents ê 46 cents compared with 17/8/2018

AUD/USD Currency Exchange

0.7344 é 0.0082 compared with 17/8/2018

17 August 2018

Friday, August 17, 2018

WEEKLY MARKET REPORT

Week Ending 17th August, 2018

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week   

S07/18   

This Week   

M07/18   

Last Sale   

S06/18  

Sydney  

Change 

Last Year  

Sydney  

Sydney Yearly 

Change  

17  

3007  

3006  

2816  

+52  

2282  

+725  

18  

2682  

2659  

2478  

+89  

2201  

+481  

19  

2465  

2459  

2292  

+40  

1924  

+541  

20  

2376  

2387  

2232  

+17  

1724  

+652  

21  

2341  

2367  

2210  

+18  

1668  

+673  

22  

-  

2350  

2184n  

+16 (M)  

1602 (M)  

+748 (M)  

26  

1507  

1554  

1430n  

+35  

1180  

+327  

28  

944  

984  

871  

+30  

899  

+45  

30  

709  

736  

648  

+30  

682  

+27  

MC  

1515  

1558n

1466  

+14  

1110  

+405  

BUT WAIT......THERE’S MORE??
The improving market late last week gave no real indication as to what might unfold this sale. All participants were pleased with the outcome of the opening series and a slight improvement in the market and slowly gaining momentum as sales commenced to the tune of 20 cents and maybe up to 50 cents was the most likely scenario for this week. How wrong we were!! The market exploded into action from the 1st lot with all fleece indicators across the 3 centres skyrocketing by 100 to 160 cents smashing regional indicator and individual micron records. The final day wasn’t as frantic as just the Eastern seaboard was in action - still most microns increasing by double digits (up to 90 cents). By week’s end the AWEX EMI had escalated by 126 cents (6.33%) to 2116 easily surpassing the June record of 2073. The depreciating FRX against the US$ (down by 2.20 cents - 3.2% - on Wednesday night to 72.20) had the EMI in US$ adding 56 cents to last sale’s value to 1537. Nothing was immune to the intense competition as all microns and types, regardless of style, VM or other faults put on 130 to 200 cents as 99% of fleece was snapped up by the trade.
Room 2 wools weren’t to be outdone either. Skirtings were in hot demand like their fleece counterparts. Big opening day rises followed by steadier increases to finish the sale had all types and descriptions, regardless of faults, climb by 110 to 150 cents. Just 28 bales of the 5684 offered nationally failed to sell, a 99.4% clearance. Cardings also looked to be caught up in the frantic buying frenzy to secure quantity as LKS and CRT led the charge in this category. Fine types
< 19.5 and < 5% VM jumped by 50 to 80 cents while STNs remained solid. Crossbreds shook off last week’s negative tone to recapture those losses. Prices improved by 60 to 80 cents across all the micron ranges and categories - Fremantle selling all of its 115 bale selection!!

A great sale this week as the combination of high demand, reduced supply and favourable FRX combined to have buyers scrambling for quantity as price limitations took a back seat and buyers took no prisoners in the battle to get volume as the competition from, not only China, but Europe and India at the forefront of the bidding war as no one mentioned “panic buying” moreso “aggressive”!!. The 99 cent gain on Wednesday and the weekly rise of 126 cents were the largest daily and weekly gains since 2002 to push 18 to 24 micron prices in all 3 centres into new record territory. Quantity again is reduced next week as just the 2 East coast centres offer 29,000 bales - where to from here???

                  Ag Concepts Fwd Prices as at 17 August, 2018

Micron

Date

Low

High

21

26-Sep-18

2205

2280

21

12-Dec-18

2150

2150

21

13-Feb-19

2110

2110

 

          Main Buyers (this week)

1

Techwool

5543

2

Fox & Lillie

1091

3

Aust. Merino

2562

4

Seatech Ind.

2561

5

Lempriere

2553

6

Endeavour Wool

2180

7

Kathaytex Aust.

2156

8

PJ Morris Wool

1980

9

Michell Aust.

1806

Eastern Market Indicators (AUD cents/kg clean)

2116cents é 126 cents compared with 10/8/2018

Northern Market Indicators (AUD cents/kg clean)

2163 cents é 136 cents compared with 10/8/2018

AUD/USD Currency Exchange

0.7262 ê 0.0176 compared with 10/8/2018


10 August 2018

Friday, August 10, 2018

WEEKLY MARKET REPORT

Week Ending 10th August, 2018

AWEX Northern Micron Indices Comparison

 AWEX INDEX

This Week

S06/18

This Week

M06/18

Last Sale

S02/18

 Sydney Change

   Last Year

    Sydney

Sydney Yearly

Change

17

2816

2831

2793n

+23

2227

+589

18

2478

2480

2435

+43

2153

+325

19

2292

2328

2282

+10

1853

+439

20

2232

2246

2242

-10

1648

+584

21

2210

2230

2224n

-14

1576

+634

22

2184n

2201

2199n

-15

1519n

+665

26

1430n

-

1519n

-89

1119

+311

28

871

886

924

-53

817

+54

30

648

673

683n

-35

608

+40

MC

1466

1477n

1435

+13

1099n

+367

MARKET OPENS ON A SOLID FOOTING BUT DROUGHT STILL DOMINATES

Wool sales resumed after the 3 week annual winter recess. Of course with the break came an increase in volume - upwards of 50,000 bales rostered (8,800 more than Sale 2) but around 4,000 bales shy of the corresponding sale last year. As is always the case after a recess buyers were keen to talk the market down due to the big offering. Apparently, following Sale 2, a major buyer put offers out 20/30 cents below where the market finished and these offers were snapped up by Chinese mills and showfloor talk had the market retreating by up to 100/150 cents. The market opened on Tuesday with the anticipated fall of 10 to 30 cents for all fleece microns bar 18/18.5s. Was this the start of the 150 cent fall?? Thankfully not - a complete change in sentiment entered the auction rooms for the final 2 days to have < 19.5 micron to the good by 10 to 75 cents as broader types lost 10 to 20 cents. The AWEX EMI added a modest 6 cents to 1990 and 18 cents to 1480 in US$ terms as the FRX has barely moved either side of 74 cents for a month. One thing of note was the discounts for < 2% VM in fleece lots looking to have gone back to very little or, in some cases with the right specs, no penalty, some lots up to 20 cents above the indicator. Even burry types > 2% looked to have their discounts softened when compared to end June/early July when these penalties looked excessive.
Skirtings followed the lead of the fleece types, an opening cheaper session followed by renewed buyer activity to end the sale to have all descriptions and VM levels 20 dearer for the week. Cardings also mirrored their merino counterparts. After a cheaper opening session they came home with a wet sail to finish the week 10 to 20 cents higher. Crossbreds also took their lead from the merino sector but a last day recovery couldn’t push them into positive territory. The losses were in fact heavy, 26s down by 90 cents while 28 to 30 micron fell by 35 to 50 cents whereas the broader microns were unchanged. These big falls probably attributed to the Northern Hemisphere shearing still under way which is virtually all XB wool leading to an over-supply of > 26 micron wool.

A good way to kick off sales after the 3 week break as the bigger quantity was easily absorbed into buyers’ inventory. European buyers and forward sellers lead the way especially on the better style/finer types which forced the Chinese mills to join the fray to meet supply requirements, despite the US$ now appreciating by 10% against the CNY-Chinese yuan. Volume drops back to 37,000 bales next week. Should be solid to dearer.

          Ag Concepts Fwd Prices as at 10 August, 2018

Micron

Date

Low

High

21

19-Sep-18

2150

2150

21

12-Dec-18

2075

2075

21

10-Apr-19

2010

2010

 

Main Buyers (this week)

1

Techwool 

7636

2

Fox & Lillie

5323

3

Lempriere

3837

4

PJ Morris

3233

5

Aust. Merino

3205

6

Endeavour Wool

2880

7

Kathaytex  Aust.

2486

8

Modiano

2073

9

Tianyu  Wool

1533

Eastern Market Indicators (AUD cents/kg clean)

1990cents é 9 cents compared with 13/7/2018

Northern Market Indicators (AUD cents/kg clean)

2027 cents é 14 cents compared with 13/7/2018

AUD/USD Currency Exchange

0.7438 é 0.0056 compared with 13/7/2018