Weekly Market Reports


25 January 2019

Friday, January 25, 2019

 WEEKLY MARKET REPORT 

Week Ending 25th January, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S30/18

This Week

M30/18

Last Sale

S29/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2538

2497

2523n

+15

2684

-146

18

2432

2434

2407

+25

2345

+87

19

2313

2283

2304

+9

2101

+212

20

2277

2246

2256

+21

1900

+377

21

2245n

2235

2225

+20

1785

+460

22

-

2213n

2202 (M)

+11 (M)

1697 (M)

+516 (M)

26

1298n

1307

1339

-41

1046

+252

28

934n

945

941n

-7

735

+199

30

-

741

719 (M)

+22 (M)

560 (M)

+181 (M)

MC

1186

1151n

1202

16

1334n

-148

LESS WOOL, LITTLE RAIN, MORE DUST

Last week’s predictions of a stronger market were spot on in most categories, particularly in the Northern market as all merino fleece micron indicators posted reasonable gains. The crossbred sector along with cardings showed some resistance - not really that surprising as 26 micron surged 134 cents in the preceding two weeks. Some analysts are saying that the Chinese are struggling to keep machinery running, some at 50% operation and are buying crossbred wool because it is cheaper hoping to sell it in blended form to keep the doors open. Seasonally, China has fallen from 76% to 71% of the offering; India has edged up to 7% with Italy 6% and Czech Republic (Modiano) with 4%.

I know we talk about lower offerings most weeks but the further we go this season the more this plays out and there is constant speculation about how the market will react as it continues to decline. One reaction we are seeing as the year unfolds is the competition on well-measured wool (particularly lower VM types) and who is buying them. In the last few weeks we have seen some well grown western division clips with good length (80-90mm) and high NKT receiving very strong competition and from buyers like New England Wool (Barberis and Reda) who normally focus on more traditional fine wool types. Many of the typical fine wools are a lot finer than normal and many under 35 NKT with high mid-breaks. Removing burry hind legs and keeping the fleece portion as low as possible is a real winner this season, if you can get it under 2%.

The other feature worth noting this season is the increasing premiums for non-mulesed wool. It’s been a long time coming but non-mulesed lines which also carry other favourable specs have been attracting greater competition from a wider audience of buyers. The other factor with these wools is that more and more of them are contracted forward so they don’t figure in the most recent price analysis.

Next week nationally 40,629 bales will be offered with just 8,929 to be offered in Sydney. Macwool will offer 746 bales on Thursday. Have a good hot Australia Day weekend!

Ag Concepts Fwd Prices as at 25 January 2019

Micron

Date

Low

High

21

22-May-19

2165

2165

 21  26-June-19 2150 2160 

Main Buyers (This Week)

1

Techwool

4187

2

Seatech Ind.

4005

3

Tianyu

3609

4

Modiano

2961

5

Aust. Merino

2907

6

Kathaytex

2141

Eastern Market Indicators (AUD cents/kg clean)

1927 cents é 4 cents compared with 18/01/2019

Northern Market Indicators (AUD cents/kg clean)

1970 cents é 10 cents compared with 18/01/2019

AUD/USD Currency Exchange

0.7123 ê 0.0028 compared with 18/01/2019

18 January 2019

Friday, January 18, 2019

WEEKLY MARKET REPORT 

Week Ending 18th January, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S29/18

This Week

M29/18

Last Sale

S28/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2523

2508

2557n

-34

2672

-149

18

2407

2438

2435

-28

2374

+33

19

2304

2286

2296

+8

2137

+167

20

2256

2234

2240

+16

1942

+314

21

2225

2233

2200

+25

1786

+439

22

-

2202n

2204 (M)

-2 (M)

1699 (M)

+503 (M)

26

1339n

1341

1259n

+80

1128

+211

28

941n

954

886n

+55

808

+133

30

739n

719

706 (M)

+13 (M)

594 (M)

+145 (M)

MC

1202

1172n

1179

+23

1513n

-311

BUYERS ABSORB BIG VOLUME!

Despite the largest national offering of the season to date (51,700 bales) the market absorbed the excess volume easier than most pundits thought. As far as the merino fleece sector was concerned, it was a sale of contrasts as finer types        <18.5 fell by 10 to 35 cents due mainly to the sub-standard quality of the offering feeling the effects of the drought, bar the lots with the “right specs” that were 25 to 120 cents dearer than their indicators. The 19s and coarser improved by 10 to 25 cents. The AWEX EMI gained 13 cents to 1923 helped along by the rises in fine XBs and merino cardings and skirtings.

Skirtings had a solid sale as all types and descriptions were 10 to 20 cents to the good. Cardings kept their momentum going from last sale as all types added 15 to 30 cents to their previous values to put the MCI in Sydney at 1202 cents. Crossbreds also had another stellar sale to follow on from last series as 28s and finer climbed by 50/80 cents.

Speculation of supply concerns is all the talk on the showfloor, too much in these opening 2 sales and a sharp decline for the next 4 weeks. As we stand at the present time there has been 175,000 bales less offered than the same time last season, a 17% decline or about 4 sales!! A telling factor of the 2 sales since the new year was the re-emerging of one of the bigger local trading companies taking on the Chinese indent buyers to see price levels in the medium types benefit from an increase in competition as price determination in the finer sector is now truly driven by poor quality and a rise in volume due to the drought.

The fine XB sector (25 to 28 micron) has had the largest increases of any type recently, 100 cents. The main reason is Australia is still the primary source of “good white” wools in this category and mills can keep combing machinery running at similar settings to full length merino fleece types. At the other end of the market carding wools look to be back in favour as well. European retailers are reporting improving winter sales after a slow start to the season. Hopefully the recent blast of cold weather can keep sales ticking along. Next week has quantities falling back to 41,000 bales with all the talk being a solid to dearer market.

Ag Concepts Fwd Prices as at 18 January 2019

Micron

Date

Low

High

21

12-Jun-19

2150

2160

Main Buyers (This Week)

1

Techwool

5956

2

Seatech Ind.

4106

3

Fox & Lillie

4097

4

Aust. Merino

3344

5

Tianyu

3242

6

PJ Morris

3242

Eastern Market Indicators (AUD cents/kg clean)

1923 cents é 13 cents compared with 11/01/2019

Northern Market Indicators (AUD cents/kg clean)

1960 cents é 12 cents compared with 11/01/2019

AUD/USD Currency Exchange

0.7151 ê 0.0028 compared with 11/01/2019

11 January 2019

Friday, January 11, 2019

WEEKLY MARKET REPORT 

Week Ending 11th January, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S28/18

This Week

M28/18

Last Sale

S24/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2557n

2524

2532

+25

2635

-78

18

2435

2415

2402

+33

2389

+46

19

2296

2291

2247

+49

2164

+132

20

2240

2254

2178

+62

1976

+264

21

2200

2240

2145

+55

1808

+392

22

-

2204n

2155 (M)

+49 (M)

1723 (M)

+481 (M)

26

1259n

1288

1205n

+54

1143

+116

28

886n

898

855n

+31

818

+68

30

-

706

693n (M)

+13 (M)

596 (M)

+110 (M)

MC

1179

1178n

1146

+33

1544n

-365

OFF TO A FLYING START!

Buyers hit the market with a vengeance to kick off the 2nd half of the selling season after the 3 week Christmas recess. With the A$ commencing the new year at 70 cents (a fall of 2.30 cents from Sale 24) and dipping below that point for a night last week, most Chinese mills were keen to book up wool at the more favourable FRX. Despite the large forecast offering of 50,000+ bales (47,600 was the final figure offered) the market was dearer from the outset only to drift fractionally in the final session in Sydney and Fremantle when the FRX edged higher to its pre-Christmas level. Medium and broad types (19 to 23s) performed the best climbing 50 to 65 cents while finer microns added 15 to 35 cents as the AWEX EMI rose by 48 cents to 1910 and by 25 cents to 1371 in US$. The market in Euros and Chinese Yuan only rose less than 1% illustrating not all mills had to extend themselves from the pre-Christmas levels to buy wool.

Skirtings also kept pace with their fleece counterparts as all types and descriptions across all microns looked 30 to 40 dearer. Cardings recouped their losses from S24 as the 3 regional indicators averaged 35 cent increases as LKS/STN lifted by 35 to 40 cents. Crossbreds were back in favour to recover some of their heavy losses from early December as most microns added 30 to 70 cents despite the large quantity on offer this week - 27% of the national offering and a whopping 37% of the Melbourne catalogues were crossbred types.

A great start to the year is not uncommon as for several past Januaries the market has staged a very good rally in any of the 3 opening sales of the year. Can this week’s rise be sustained or even increase?? Opinion is divided. On one hand demand is good and the need to keep machinery running after 3 weeks of not buying wool is critical. On the flip-side, next week’s national catalogue of 54,000 bales could be the largest of the season so far and the FRX has recovered to 71.85, a figure that might look a bit too high to do business with so much wool to pick from. Year on year comparisons has just 735,000 bales sold against 935,000 last season - a massive drop of 21% in 6 months. AWTA figures show 161.3mkg tested this season to date down from 183.3mkg last season. We sell early next Thursday and, hopefully, the market can hold till then.

  Ag Concepts Fwd Prices as at 11 January, 2019

Micron

Date

Low

High

21

27-Mar-19

2160

2160

21

8-May-19

2150

2150

Main Buyers (This Week)

1

Techwool

6210

2

Fox & Lillie

5207

3

Aust. Merino

2945

4

Modiano

2696

5

Endeavour Wool

2696

6

Tianyu Wool

2504


Eastern Market Indicators (AUD cents/kg clean)

1910 cents é 48 cents compared with 14/12/2018


Northern Market Indicators (AUD cents/kg clean)

1948 cents é 42 cents compared with 14/12/2018


AUD/USD Currency Exchange

0.7179 ê 0.0049 compared with 14/12/2018