Weekly Market Reports


20 December 2019

Friday, December 20, 2019

WEEKLY MARKET REPORT 

Week Ending 20th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S25/19

This Week

M25/19

Last Sale

S24/19

Sydney

Change

Last Year (Wk24)

Sydney

Sydney Yearly

Change

17

2005

1989

1925

+80

2532

-527

18

1907

1863

1815

+92

2402

-495

19

1818

1789

1723

+95

2247

-429

20

1792

1771

1708

+84

2178

-386

21 1783n 1769 1705n +78 2145 -362
26 1180n 1164 1120n +60 1205n -25

28

914n

913

840n

+74

855n

+59

30

-

729

671 (M)

+58 (M)

693 (M)

+36 (M)

MC

1071n

1051n

1040n

+31

1146

-75

CONFIDENCE IS KING!!

Last sale’s upward shift in the market accelerated this week - the final sale before the 3 week recess. The AWEX EMI rose by 55 cents to 1558 and 32 cents in $US terms to 1066 despite the FRX staying well above 68 cents. Buyers were keen from the get-go with large increases in the opening session followed by a more measured approach on the final day but still good gains. All fleece microns posted gains of 75 to 95 cents regardless of style or any faults. Skirting’s were also in good demand as buyers pushed all types in this sector 60 to 90 cents higher. Crossbreds were also keenly sought after as most microns added 60/70 cents. The only sector to not explode in prices was cardings. Sydney and Fremantle averaged 20 cent rises while Melbourne lost 7 cents to have the 3 centres’ average price at 1070.

Despite the anticipated large offering (39,400), the high FRX and shipping logistics delays, the market had its largest weekly increase for 12 sales. The final volume offered was 12% lower than originally rostered due to a high withdrawal rate and with no chance to buy any meaningful quantity till mid January buyers were under pressure to fulfil outstanding commitments from the reduced selection on offer.

This year, particularly the final 6 months, has been one of the toughest periods for all in the industry. Firstly growers are still combatting the worst drought for over 100 years, massive reductions in sheep numbers, poor quality wool and a drop in the market of 17% (1862) from 12 months ago to 1558. The peak of the market was in mid February at 2027 and the low point was early September when the EMI got down to 1365, a 33% swing. At the high point in February just 252 cents separated 17 from 21 micron (2620 to 2368). At the cheapest point of the year the spread wasn’t much wider, 17s at 1842 and 21s were 1487 - a 355 cent difference. Exporters have had a year to forget as well. The high prices from last year into 2019 proved unsustainable as global events that we have spoken about in several reports conspired against them as consumer demand weakened. The market’s demise started in May and peaked in August, falling 163 cents in a single week only to stage a remarkable recovery in S11 climbing by 170 cents. Buyers, understandably, couldn’t trade with any confidence with such wild swings and are still feeling the effects now. The British election outcome and the softening of trade tariffs have boosted confidence that will hopefully carry on into the new year.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

February 20

1690

Main Buyers (This Week)

1

Techwool

4996

2

Fox & Lillie

4068

3

Endeavour Wool

3581

4

Aust. Merino

3430

5

Tianyu Wool

2881

6

PJ Morris

2077


Eastern Market Indicators (AUD cents/kg clean)

1558 cents é 55 cents compared with 13/12/2019


Northern Market Indicators (AUD cents/kg clean)

1599 cents é 72 cents compared with 13/12/2019

   

AUD/USD Currency Exchange

0.6845 ê 0.0040  compared with 13/12/2019

13 December 2019

Friday, December 13, 2019

 WEEKLY MARKET REPORT 

Week Ending 13th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S24/19

This Week

M24/19

Last Sale

S23/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1925

1950

1908

+17

2532

-607

18

1815

1815

1808

+7

2402

-587

19

1723

1727

1706

+17

2247

-524

20

1708

1711

1683

+25

2178

-470

21 1705n 1709 1681n +24 2145 -360
26 1120n 1149 1135n -15 1205n -85

28

840n

854

833n

+7

855n

-15

30

-

671

648 (M)

+23 (M)

693 (M)

-22 (M)

MC

1040n

1058n

1061n

-21

1146

-106

MARKET BACK OVER 1500!!

After 7 straight days of falls adding up to almost 100 cents, the market had an unexpected turnaround as the AWEX EMI posted an 11 cent gain to 1503. Several factors were pointing to further losses for the market: the large offering, adverse FRX rates, the ongoing poor quality and global economic concerns almost certain to lead to a cheaper market. High rates of withdrawn wool (12%, 6000 bales) saw a much more manageable quantity for buyers to handle and some hidden prompt that appeared was all the impetuous the market needed to strengthen.

Despite the small upward adjustment this series was one of the most impressive sales of the season insofar as the big players of each segment dominated, local based traders to China led the merino sector, the biggest top-maker in the world was atop the crossbred sector and the largest global carbo processor was No.1 for cardings and oddments. Most fleece microns added 10 to 25 cents to their values. Skirtings had a mixed sale as the opening sessions’ gains were given up on the last day to leave them just in sellers’ favour for the week. Cardings averaged 19 cent losses across the 3 centres as all types fell by 10 to 30 cents. Crossbreds also had mixed results as < 26 microns were 15 cents lower while broader types added 10/20 cents.

The steadying market was welcome news after 3 weeks of falls and no talk that the market was about to stop its downward trend. Even after the high percentage of withdrawals buyers were faced with the largest catalogue since May but the end result was pleasing to all participants. The national turnover for wool sold passed the $1billion mark this week but it took 7 more sales to reach this milestone than it did last season - a result of the falling market and less wool offered (80,650 bales 10%). In what will be good news for the global economy (and the wool market) the US has agreed to halve tariff rates on $350bn worth of Chinese goods, some of which were as high as 25% and, in return, China would boost purchases of US farm products. This latest agreement should avoid US threats to impose tariffs on more than $150bn worth of Chinese exports that were due to start next week. Stock market reaction was swift as Asian markets rose 2% and Wall Street again set new records. Confidence is a great thing!! The market should end the year on a solid to dearer note for the final sale of the year.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

January 20

1670

Main Buyers (This Week)

1

Techwool

5954

2

Fox & Lillie

4166

3

Endeavour Wool

4068

4

Tianyu Wool

3195

5

Aust. Merino

2922

6

PJ Morris

2323


Eastern Market Indicators (AUD cents/kg clean)

1503 cents é 11 cents compared with 06/12/2019


Northern Market Indicators (AUD cents/kg clean)

1527 cents é 3 cents compared with 06/12/2019

   

AUD/USD Currency Exchange

0.6885 é 0.0046  compared with 06/12/2019

6 December 2019

Friday, December 06, 2019

WEEKLY MARKET REPORT 

Week Ending 6th December, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S23/19

This Week

M23/19

Last Sale

S22/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1908

1914

1980

-72

2513

-605

18

1808

1798

1863

-55

2379

-571

19

1706

1712

1744

-38

2218

-512

20

1683

1674

1713

-30

2147

-464

21 1681n 1671 1716n -35 2129 -448
26 1135n 1133n 1168n -33 1205 -70

28

833n

835

855n

-22

855

-22

30

-

648n

694 (M)

-46 (M)

683 (M)

-35 (M)

MC

1061n

1077n

1054

+7

1183

-122

MARKET FALLS UNDER 1500 cents!!

Another tough week for the wool market as the downward trend continued on for the 3rd sale in a row. Steady falls all week saw the AWEX EMI peel off by 38 cents to fall below the 1500 cent mark to 1492 - its lowest point in 13 weeks, 357 cents lower than this sale last year. In US$ terms the loss was only 15 cents to 1020 somewhat cushioned by the strengthening FRX to 68.5 cents. This ascendency, along with the subdued demand, contributes to the falling market. Losses were most severe in the finer microns, < 18.5 giving up 50 to 70 cents while 19s and broader fell by 30/40 cents with the better style, good spec types less affected while the dustier/tender lots saw the discounts widen on these. Skirtings also took a hammering with all types falling by 50 to 80 cents. The only highlight was the Carding sector which added 7 cents to 1061 while crossbreds lost 20 to 30 cents.

A wane in demand, the logistical headache of shipping wool over the Christmas/New Year period, the timing of the Chinese New Year (25th January) and a sudden spike in offerings for the last 2 sales of the year are all conspiring to send the market on a downward spiral - 100 cents fall over the past 6 weeks. The large offerings and inability of buyers to deliver wool on time is severely hampering normal buying and shipping activities. This week was, in effect, the final opportunity to ship wool to China for arrival before their New Year shutdown so the large offering at this time is bad timing for exporters and mills. This means a 2 to 4 week additional financing period that is required for exporters for any wool destined for China that is bought over the next 2 sales if delivery is not “prompt”, one week for shipment delay due to Christmas and up to 2 weeks for the Chinese New Year shutdown. The margins are tight at the best of times let alone this situation when hand to mouth modus operandi that all the trade use.

AWTA released their November figures which saw a 1% fall when compared to the same month last year with the progressive total for the year running at 8.5% less wool tested than last season (127.5mkg to 139.4mkg) and 77,175 (10.5%) less bales offered than last season. Next week’s sale (48,500) could be the largest since end of April growing by 9,000 bales (23%) since last Friday, Melbourne’s catalogue ballooning by a massive 27%.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

January 20

1680

Main Buyers (This Week)

1

Techwool

4100

2

Aust. Merino

3065

3

Fox & Lillie

2926

4

Endeavour Wool

2600

5

PJ Morris

1872

6

Tianyu Wool

1117


Eastern Market Indicators (AUD cents/kg clean)

1492 cents ê 38 cents compared with 29/11/2019


Northern Market Indicators (AUD cents/kg clean)

1524 cents ê 37 cents compared with 29/11/2019

   

AUD/USD Currency Exchange

0.6839 é 0.0074  compared with 29/11/2019