Weekly Market Reports


29 March 2019

Friday, March 29, 2019

 WEEKLY MARKET REPORT 

Week Ending 29th March, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S39/18

This Week

M39/18

Last Sale

S38/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2513

2447

2538

-25

2764

-251

18

2437

2359

2457

-20

2301

+136

19

2316

2296

2331

-15

2037

+279

20

2293

2274

2298

-5

1922

+371

21

2279n

2263

2283n

-4

1888

+391

26

1425n

1433n

1408n

+17

1198 (M)

+227 (M)

28

-

1178

1165n

+19 (M)

871 (M)

+307 (M)

30

-

945

-

+16 (M)

614 (M)

+331 (M)

MC

1142

1109n

1172

-30

1332

-190

A TALE OF TWO SALES!!

Week 39 saw 37,400 bales go to auction, 5700 less than last week. Unfortunately there was another decline in the Australian wool market (even with the 7.5% drop in supply) which saw 11.8% passed in. The AWEX EMI came back for the fifth consecutive week closing at 1947, a decrease of 16. There were considerable discounts once again this week, especially on the lower yielding wools, under 60%, which made up 30% of the merino fleece nationally by week. A report from AWEX explains that this week was the highest percent of low yielding wools since the 2009 drought. This is definitely a driving factor at the moment as lower yields mean extra processing, extra cost and more chance of damaged valuable fibre. As we look into the future, even if we get this rain that has confidently been predicted this weekend, (all fingers crossed) buyers and processors realise there is going to be a lot more of these types of wool coming through the system for a good length of time yet. As quoted by AWI, “With most of our wool destined for export in the greasy form, the low yield means far less clean kgs are able to be placed into shipping parcels/containers. Container shipment to China is much cheaper than all other destinations so decreased shipping of clean kgs is problematic but relatively negligible in the big cost/picture but with the European and Indian shipping costs ranging from 3 to 5 times higher, the lower yields either take competition away or depress prices due to conversion to clean kg.” Another factor included in the decreasing value of our wool is the constant flow of high mid-break wools. This week saw 76.8% of the Australian merino fleece under 40 nkt. Any better style wools with low VM, sound and higher yields are definitely making a premium in the merino fleece market which is still strong.

Merino skirtings had another solid week. Buyers seemed enthusiastic as the auction kicked off and left the skirtings generally unchanged, still helping the average for woolgrowers. The downside for the room 2 wools was the Cardings giving up 30 - 42c nationwide but still closing at an average of 1113c/kg.

Definitely on the positive side once again the XBs have added to the indicators. Very strong buyer support has helped the XBs rise by 15 to 20 cents with the broader 32 microns taking the biggest leap.

Next week sees us taking 814 bales to the auction. Let’s hope the market heads in a positive direction and see the EMI break back through the 2000 mark!

            Ag Concepts Fwd Prices as at 29 March 2019               

Micron

Date

Low

High

21 17-Apr-19 2250 2250 
21 9-Oct-19  2095 2095 

Main Buyers (This Week)

1

Techwool

4990

2

Fox & Lillie

4000

3

Seatech Ind.

3511

4

Aust. Merino

2865

5

PJ Morris Wool

2311

6

Tianyu Wool

2198

Eastern Market Indicators (AUD cents/kg clean)

1947 cents ê 16 cents compared with 22/03/2019

Northern Market Indicators (AUD cents/kg clean)

1993cents ê 14 cents compared with 22/03/2019

AUD/USD Currency Exchange

0.7097 ê 0.0048 compared with 22/03/2019

22 March 2019

Friday, March 22, 2019

WEEKLY MARKET REPORT 

Week Ending 22nd March, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/18

This Week

M38/18

Last Sale

S37/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2538

2458

2560

-22

2776

-238

18

2457

2383

2472

-15

2348

+109

19

2331

2317

2340

-9

2074

+257

20

2298

2282

2309

-11

1960

+338

21

2283n

2282

2291n

-8

1914n

+369

26

1408n

-

1411n

-3

1168

+240

28

1165n

1159

1141 (M)

+18 (M)

842

+323

30

-

929

921 (M)

+8 (M)

595 (M)

+334 (M)

MC

1172

1151n

1238

-66

1330n

-158

CROSSBREDS SOLID - MERINOS FALL!

Another week and more falls for the wool market. For the 4th sale in a row the market was in retreat as all of the advances of S34 (59 cents) amidst the SA foot and mouth outbreak have been eroded as the AWEX EMI lost another 16 cents to add to the 48 cent losses for the 3 previous sales. The only sector to escape any losses was XBs. The ascending A$, peaking at 71.5 cents, a lift of 1.22% coupled with the ongoing poor selection gave buyers enough ammunition to let the market drift as 18 micron and broader gave up 10/15 cents while < 18s fell by 25 cents with only the very best style fleece wools with high nk/t readings and low mid-breaks escaping any discounts. The fleece offering that came under a style 6 or 7 (average to inferior topmaking styles) made up 15% of the volume, the highest weekly level since June 2010 as the grip of drought seems to tighten up.

Most room 2 types fared worse than their merino fleece counterparts. Skirtings took hits of 30/50 cents for the low VM lots (<2%) with burrier, poorer style types giving back 80 cents. Cardings also took a major hit as LKS/STN lost 40 to 70 cents while STN collapsed by 10 to 120 cents. As mentioned earlier, the XB sector was the only one to go through the sale unscathed as most microns were solid to 20 cents dearer.

All the talk on the showfloor centres around the selection and how poor it is with no real improvement in the short term even if the drought were to break now. Some fleece lines are yielding below 50% with these becoming an issue in scouring as water replacement frequency increases and sludge disposal costs escalate. There are no issues further down the processing line if scouring is effective as topmakers can use these wools and take advantage of the price discounts as the finished product is still suitable for worsted yarn manufactures.

National volumes look to have stagnated around the 40,000 bale/week mark as many growers shear and offload sheep to escape what could be another tough winter as low finances and ability to source supplement feed is forcing growers into this dire situation of selling ewes. Quantities are expected to decrease rapidly after Easter. The market looks to be close to the bottom of this price cycle according to some buyers. Let’s hope so and pray that “Trevor & Veronica” can get together and deliver what so many desperately need - a massive rain event!!

            Ag Concepts Fwd Prices as at 22 March 2019               

Micron

Date

Low

High

21 27-Mar-19 2260 2260 

Main Buyers (This Week)

1

Techwool

4749

2

Tianyu Wool

4248

3

Fox & Lillie

3619

4

Seatech Ind.

3534

5

Kathaytex

2671

6

Endeavour Wool

2605

Eastern Market Indicators (AUD cents/kg clean)

1963 cents ê 16 cents compared with 15/03/2019

Northern Market Indicators (AUD cents/kg clean)

2007cents ê 20 cents compared with 15/03/2019

AUD/USD Currency Exchange

0.7145 é 0.0085 compared with 15/03/2019

15 March 2019

Friday, March 15, 2019

 WEEKLY MARKET REPORT 

Week Ending 15th March, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S37/18

This Week

M37/18

Last Sale

S36/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2560

2445

2608

-48

2746n

-186

18

2472

2375

2520

-48

2328

+144

19

2340

2326

2381

-41

2027

+313

20

2309

2292

2340

-31

1912

+397

21

2291n

2277

2321

-30

1854

+437

26

1411n

-

1451n

-40

1153

+258

28

-

1141

1169n

-24 (M)

815 (M)

+326 (M)

30

-

921

945 (M)

-24 (M)

563 (M)

+358 (M)

MC

1238

1184n

1237

+1

1298n

-60

UNDER THE WEIGHT OF DUST!

It was another tough week as the EMI slipped for the third week in a row under the weight of an increasing catalogue of drought-affected dusty wools and back under the magical 2000 cent mark to finish 29 cents lower at 1979. The national average yield on merino fleece this week was 63.6%, the lowest in ten years.

Over the course of the week buyers continually adjusted downwards their limits on the low yielding types as they struggled to average them into their orders. On the other hand, the few well-measured lines for both yield and tensile strength saw very good competition and finished the week not far below the previous week. It seems this trend will continue for the foreseeable future and now is certainly the time to be pulling dusty backs out of fleeces to give the remainder a fighting chance. What is also set to continue will be the downward pressure on the sub 19 micron sector and we now see the 17 micron indices 186 cents below this time last year even though the EMI is 228 cents above last year’s level. We predict the gap to narrow over the coming months with an imbalance in offering squeezing the broader end and flooding the fine end.

The Foot and Mouth outbreak in South Africa could still be having an impact here but not positive. We did see a jump in the market three or four weeks back and some of that rise was attributable to the Chinese ban on SA wools. The downside is that there are exporters who have South African wool tied up in containers either at Chinese ports, on the water or still in SA awaiting a clearance, who also buy wool off us. These exporters (a couple of large ones) would be feeling a credit squeeze and this has the potential to impact our market here. South Africa produces about 50mkg per annum equivalent to about 14% of the Australian clip. The fall in production here this year will be close to the entire SA wool clip.

Next week a larger catalogue of 44,000 bales will be offered in three centres with Macwool to offer 760 bales on Wednesday. I think you might have gathered by now we expect a similar trend for next week.

                  Ag Concepts Fwd Prices as at 15 March 2019               

Micron

Date

Low

High

21 12-Jun-19 2250 2250 
21 9-Oct-19  2115  2115 

Main Buyers (This Week)

1

Techwool

4188

2

Tianyu Wool

3618

3

Seatech Ind.

3407

4

Aust. Merino

3307

5

Kathaytex

2329

6

Endeavour Wool

2158

Eastern Market Indicators (AUD cents/kg clean)

1979 cents ê 29 cents compared with 08/03/2019

Northern Market Indicators (AUD cents/kg clean)

2027cents ê 31 cents compared with 08/03/2019

AUD/USD Currency Exchange

0.7060 é 0.0012 compared with 08/03/2019

8 March 2019

Friday, March 08, 2019

 WEEKLY MARKET REPORT 

Week Ending 8th March, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S36/18

This Week

M36/18

Last Sale

S35/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2608

2506n

2612

-4

2802

-194

18

2520

2428

2525

-5

2395

+125

19

2381

2365

2396

-15

2085

+296

20

2340

2330

2357

-17

1958

+382

21

2321

2295n

2338n

-17

1887

+434

26

1451n

1449n

1436n

+15

1170

+281

28

1169n

1165n

1151n

+18

808

+361

30

-

945

971 (M)

-26 (M)

570 (M)

+375 (M)

MC

1237

1192n

1210

+27

1319n

-82

STEADY AS SHE GOES!

Another steady week for the wool market as the AWEX EMI had a small decline of 8 cents to 2008. In Fremantle it was a reversal of the last series as it virtually gave up all the gains of the previous sale to fall by 20 cents to 2157. The volume of dusty, tender, fine fleece types weighed on the indicators as the lots with better specs, that were few in number, were rock solid but couldn’t compete with the inferior types as they pushed the fine indicators < 18.5 down by just 5 cents while the 19s and broader retreated by 15/20 cents with some of the poorer style wools quoted 30 to 60 cents cheaper as buyers struggle to fit the vast number of these drought affected wools into orders.

Skirtings followed the lead of their fleece counterparts to see prices reduce by 10 to 20 cents across all microns and VM levels. Cardings continued their price rises after last series’ hiccup to have the 3 centres average a 30 cent increase for the MCI, now 91 cents higher (1237) than their pre-Christmas close. Crossbreds kept their stellar run going as most types added 10 to 30 cents to their previous record breaking levels.

Despite the FRX going in favour of the A$ by 1 cent to 70.50 it was not enough to stop the market from falling. Although demand remains high and supply is dwindling the quality of the offering is a hindrance to any price advancement at the moment with the selection not improving any time soon.

ABARES held its annual Outlook Conference in Canberra this week releasing its new 5 year forecast for agricultural industries. The new forecast for wool looks confusing and inconsistent which is not providing the correct information for the industry. They are forecasting that total wool production for 2018/19 will be 383mkg (2.1 million bales) a 9% fall from the previous season. This is in line with AWTA testing data that is 11% less than last season up till the end of February.

The Chinese ban on wool imports from SA continues as a delegation from there is in China to try and bring a quick resolution to the stand-off but it could take up to 2/3 months. This didn’t hinder their market (up by 2% this week) with the big Chinese processor, Tianyu, securing 1600 bales. Our national catalogue drops back to 41,700 bales next week; we offer 760 bales on Thursday hopefully to a dearer market.

            Ag Concepts Fwd Prices as at 8 March 2019               

Micron

Date

Low

High

21 12-Jun-19 2250 2250 

Main Buyers (This Week)

1

Techwool

5114

2

Fox & Lillie

4338

3

Tianyu Wool

4138

4

Seatech Ind.

3549

5

Kathaytex

2974

6

Aust. Merino

2964

Eastern Market Indicators (AUD cents/kg clean)

2008 cents ê 8 cents compared with 01/03/2019

Northern Market Indicators (AUD cents/kg clean)

2058cents ê 5 cents compared with 01/03/2019

AUD/USD Currency Exchange

0.7048 ê 0.0099 compared with 01/03/2019

1 March 2019

Friday, March 01, 2019

WEEKLY MARKET REPORT 

Week Ending 1st March, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S35/18

This Week

M35/18

Last Sale

S34/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2612

2524

2620

-8

2826

-214

18

2525

2468

2533

-8

2407

+118

19

2396

2374

2422

-26

2136

+260

20

2357

2339

2390

-33

2001

+3563

21

2338n

2333

2368

-30

1928n

+410

26

1436n

-

1414n

+22

1152n

+284

28

1151n

1133

1153n

-2

805

+346

30

-

971

983 (M)

-12 (M)

576 (M)

+395 (M)

MC

1210

1176n

1215

-5

1339n

-129

THINGS BACK TO NORMAL??

An 8 sale run of rises for the EMI came to a halt this week as the market drifted by 11 cents to 2016, the best start to the year since 2006. With Chinese mills not operating in South Africa and their decision to hold wool sales this week and our local volume lifting by 8,500 bales in the space of 4 days due to last sale’s big gains many theories were being touted as to what might happen. Could the market lose 10/15% in SA and our market following suit here with the European orders heading across the Indian Ocean to what may have been a substantially cheaper market or stay here to support our market?? When will the Chinese resume buying in SA? Growers and brokers were understandably worried about this week’s outcome on both sides of the Indian Ocean.

The market held up well as a cheaper opening trend led to a stronger finish to see 18.5s and finer up to 10 cents cheaper while broader microns gave back 25 to 35 cents. It was interesting to note Fremantle had both days of increases. Merino skirtings had a solid sale to finish in sellers’ favour. Crossbreds had a mixed week as the finer and very broad types gained 20 cents while 28/30micron lost 10 cents. Cardings gave up 10 to 15 cents for most types in this sector. The market in SA was nowhere near as bad as predicted, just a 0.6% fall and, worthy of note, the big top-maker from China (Tianyu) bought 1700 bales this week, headed to who knows where!!

Considering the events over the past few weeks global wool markets looked to have dodged a bullet. The suspension of sales in SA and the embargo from Chinese Customs on their wool imports could have led to a massive fall in their market with the potential repercussions felt here as buyers chased the potentially cheaper wool in SA. This didn’t eventuate as the good selection of finer types were in good demand from Europe.

In no real surprise to anyone the release of testing figures for February from AWTA was down 5.5% from the previous season’s weight of wool tested. This has the year-on-year decline at 11.2%; auction offerings are at 13.4% lower than last season (174,000 bales) or 4/5 selling weeks. We sell late on Wednesday next week as the national volume drops slightly to 46,000 bales. Market direction is still hard to pick but plenty of business was written on Wednesday night that didn’t really flow through to the sale room on Thursday - hopefully next week.


            Ag Concepts Fwd Prices as at 1 March 2019               

Micron

Date

Low

High

21 17-Apr-19 2280 2280 
21 29-May-19 2250 2250

Main Buyers (This Week)

1

Techwool

9007

2

Seatech Ind.

3980

3

Tianyu Wool

3814

4

Kathaytex

3061

5

Fox & Lillie

2827

6

PJ Morris Wool

2673


Eastern Market Indicators (AUD cents/kg clean)

2016 cents ê 11 cents compared with 22/02/2019


Northern Market Indicators (AUD cents/kg clean)

2063cents ê 11 cents compared with 22/02/2019


AUD/USD Currency Exchange

0.7147 ê 0.0013 compared with 22/02/2019