Weekly Market Reports


31 May 2019

Friday, May 31, 2019

 WEEKLY MARKET REPORT 

Week Ending 31st May, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S48/18

This Week

M48/18

Last Sale

S47/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2409

2286

2380

+29

2885

-476

18

2361

2282

2317

+44

2554

-193

19

2211

2228

2163

+48

2316

-105

20

2197

2215

2149n

+48

2258

-61

21

-

2214

2137n (M)

+77 (M)

2263 (M)

-49 (M)

22

-

2181n

2131 (M)

+50 (M)

2246n (M)

-65 (M)

28

1125n

1123

1071 (M)

+52 (M)

1023

+102

30

-

935

888 (M)

+47 (M)

709 (M)

+226 (M)

MC

1036

1046n

1019

+17

1470n

-434

MARKET REBOUNDS WITH A VENGEANCE!!

The wool market’s resilience has been no more evident than in this sale following the fortnight of big losses. Signs that prices may have leveled last Thursday with very minor downward adjustments gave growers hope that fortunes would turn and a rebound was imminent. Talk on Friday that business was written the previous night and the market would be okay was on the money with one buyer sending texts that the market would be “definitely dearer” as plenty of new business was done on Friday afternoon.

All sectors of the market rose as the EMI posted a 54 cent gain to 1887 wiping out almost half the losses of the 2 previous sales. The rise was similar in US$ terms, 46 cents to 1307 as the slight ascendency in the A$ had no adverse effect. The mid microns (18 to 22) had the largest gains, 40 to 50 cents while < 18 added 20 to 35 cents with buyers desperate to secure the limited volume of superior types (100 cents higher) with the inferior types even playing catch-up as lack of quantity came into play. Skirtings clawed back the recent losses with rises of 30 to 50 cents. LKS drove the MCI up as they gained 20 to 30 cents and, after the 2 sale savaging that XBs took, their prices recovered by 50 cents.

Why the sudden change of sentiment?? Trying to figure that out is nearly impossible. Fundamentals haven’t changed, global economic growth is slowing, consumer confidence in China has dipped, the US/China trade war is still raging, there is price resistance at the retail end and last stage processing and still the ongoing problems in the UK with Brexit and a new British PM on the horizon. These past few weeks are just a classic case of how things can change in the blink of an eye, from “doom and gloom” to “all good” overnight. When they need to buy wool nothing else matters and when the market falls there are many varied theories as to why.

Where to from here?? Commodity markets have a habit of fluctuating widely and the wool market is no different. One certainty is the lack of volume. The national offering this season to date is 215,000 bales (12%) less than last year. For the past 2 sales and the next 3 to come, the average weekly volume is just 23,000 - 4,000 bales/week less than last season. Will the tight supply be enough to keep the market trending dearer???

Free knitted woollen jumpers for poddy lambs. Call into our office and take as many as you need.

Many colours and styles to choose from.

Ag Concepts Fwd Prices as at 31 May, 2019

Micron

Date

Low

High

21

28-Aug-19

2080

2080

21 27-Nov-19 2050 2050

Main Buyers (This Week)

1

Techwool

3093

2

Fox & Lillie

2927

3

Aust. Merino

2730

4

Endeavour Wool

2552

5

Tianyu Wool

1534

6

Lempriere

1520

Eastern Market Indicators (AUD cents/kg clean)

1887 cents é 54 cents compared with 24/05/2019

Northern Market Indicators (AUD cents/kg clean)

1909 cents é 40 cent compared with 24/05/2019

   AUD/USD Currency Exchange

0.6925 é 0.0048 compared with 24/05/2019

24 May 2019

Friday, May 24, 2019

WEEKLY MARKET REPORT 

Week Ending 24th May, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S47/18

This Week

M47/18

Last Sale

S46/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2380

2248

2418

-38

2834n

-454

18

2317

2240

2365

-48

2501

-184

19

2163

2146

2231

-68

2261

-98

20

2149n

2144

2189n

-40

2193

-44

21

2129n

2137

2200 (M)

-63 (M)

2189 (M)

-52 (M)

22

-

2131n

2177 (M)

-46 (M)

2185 (M)

-54 (M)

28

-

1071

1180 (M)

-109 (M)

995 (M)

+76 (M)

30

-

888n

981n (M)

-93 (M)

716 (M)

+172 (M)

MC

1019

1036n

1056

-37

1449n

-430

MARKET FALLS SHARPLY BUT BOTTOM IS IN SIGHT!!

Further negative sentiment from buyers saw the market retreat even more as the AWEX EMI lost 60 cents to 1833 and 49 cents in US$ terms to 1261. These indicators are now 150 and 241 cents behind levels from this time last year, 7.5 and 16% lower with the A$ 9% less at 68.7 cents. The major decline in the market was on the opening day as sentiment steadied on the final day. All micron indicators fell sharply, 40 to 80 cents with the familiar pattern of better style, low VM and the odd non-mulesed lot selling at market rate or up to 50 cents clean better with the tender, burrier, low yielding types getting smashed by up to 200 cents.

Skirtings also bore the brunt of poor buyer sentiment as low   VM fine types fell 50 to 70 cents while burrier lots gave up 70/100 cents. Cardings weren’t immune from the falling market either as all types lost 20 to 60 cents. The shine has certainly come off the XB sector after its stellar run since January. 26 to 28 micron lost 100 cents while 30s and < 26 fell 50 cents. This equates to a 219 cent (14%) collapse for 28s over the past 2 sales.

All the problems that led to the market falling last week are still well and truly in place. The lingering trade dispute/tariff war between the US and China is the major factor contributing to the slowdown in the Chinese economy and a sudden dip in their consumer confidence is flowing through mills reluctant to purchase wool as price pressure is mounting from manufacturers and retailers that are struggling to move dearer stock of fabric, garments and yarn that is building up in volume. Costs have also become dearer at early stage processing with scouring costs escalating with more water needed to combat the dustier wools and higher wastage costs incurred.

In response to their economic slowdown the Chinese government has loosened monetary policy ie lowering interest rates on consumer debt (mortgages) and devaluing their currency (Renminbi) against the US$ which has fallen sharply since tariffs were raised to 25% making Chinese exports to the US cheaper.

The EMI has fallen 120 cents (6%) over the past 2 sales. Even with a favourable FRX rate, the A$ at its lowest point since the GFC and weekly offerings under 30,000 bales the market has suffered. Let’s hope the steadier market on Thursday is a signal that we’re at a level where new business has been written and prices ascend!!

Ag Concepts Fwd Prices as at 24 May, 2019

Micron

Date

Low

High

21

28-Aug-19

2130

2130

Main Buyers (This Week)

1

Fox & Lillie

2299

2

Aust. Merino

1804

3

Endeavour Wool

1541

4

United Wool Co.

1265

5

Tianyu Wool

1154

6

Techwool

941


Eastern Market Indicators (AUD cents/kg clean)

1833 cents ê 60 cents compared with 17/05/2019


Northern Market Indicators (AUD cents/kg clean)

1867 cents ê 68 cent compared with 17/05/2019

   

AUD/USD Currency Exchange

0.6877 ê 0.0039 compared with 17/05/2019

17 May 2019

Friday, May 17, 2019

WEEKLY MARKET REPORT 

Week Ending 17th May, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/18

This Week

M45/18

Last Sale

S44/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2418

2302

2480

-62

2786n

-368

18

2365

2299

2413

-48

2437

-72

19

2231

2218

2288

-57

2204

+27

20

2189n

2189

2259n

-70

2143

+46

21

-

2200

2246 (M)

-46 (M)

2138 (M)

+62 (M)

26

1455n

1413n

1523 (M)

-110 (M)

1396n

+59

28

-

1180

1323 (M)

-143 (M)

1006 (M)

+174 (M)

30

-

981

1005 (M)

-24 (M)

714 (M)

+267 (M)

MC

1056

1039n

1093

-37

1422

-366

MARKET FALLS. UNCERTAIN TIMES AHEAD!

The stalling market last sale turned into a full blown collapse this week as the fears that a lot of processors not being able to pass on the higher wool prices to downstream users finally caught up with growers. Manufacturers and retailers are seeing more and more resistance from consumers for the higher priced garments - this wool being purchased over a few peaks in the market that now were deemed as unsustainable through the pipeline. Adding to the sour sentiment is the ongoing trade tension and increased tariffs on Chinese goods exported to the USA. Demand has been lowered by current price structure and the trade war and weaker global growth. China buys 75-80% of our wool and consumes half of that with the USA - a big purchaser of tops, yarn and finished goods.

Losses were across the full spectrum as the EMI lost 59 cents to 1893, its lowest point for six months. All merino indicators lost 50 to 70 cents with the poorer style types up to 120 cents behind these new price levels with some lots 200 to 300 cents clean down from their original valuation. Skirtings lost 40 to 50 cents. Cardings also bore some savage losses. STN fell 70/110 cents, LKS 20 to 30 while CRT remained unchanged; the 3 centres averaged 44 cent falls. Crossbreds took some big hits also.  Most XBs have climbed by 50% since Christmas but this came to an abrupt halt this sale. Losses ranged from 110 to 145 cents in Melbourne for 26 and 28 microns (10% falls). The national pass-in rate escalated to 22%.

This week’s falls came as FRX rates favoured the A$, now 69.15 cents and small volumes are being offered. This does not always guarantee a rising market. The US/China trade dispute flared up this week as the US announced a 25% import duty to be imposed immediately on US$200 billion of products from China, up from 10%. Included is greasy and semi-processed wool, yarn, fabric and carpets but not wool clothing. China retaliated with its own 25% tariff targeted at agricultural products. News came through late last Friday on the lifting of the ban of South African wool exports to China. Scoured wool can be imported and greasy wool is subject to temperature conditions as the FMD dies over time dependent on the temp, the higher the temp the quicker it dies. Just 25,000 bales are on offer next week but, unfortunately, we may see more of the same.

Ag Concepts Fwd Prices as at 17 May, 2019

Micron

Date

Low

High

21

28-Aug-19

2130

2130

21 09-Oct-19 2130 2130

Main Buyers (This Week)

1

Fox & Lillie

3194

2

Aust. Merino

2803

3

United Wool Co.

1966

4

Seatech Ind.

1900

5

Endeavour Wool

1760

6

Techwool

1408


Eastern Market Indicators (AUD cents/kg clean)

1893 cents ê 59 cents compared with 10/05/2019


Northern Market Indicators (AUD cents/kg clean)

1937 cents ê 52 cent compared with 10/05/2019

   

AUD/USD Currency Exchange

0.6916 ê 0.0058 compared with 10/05/2019

10 May 2019

Friday, May 10, 2019

WEEKLY MARKET REPORT 

Week Ending 10th May, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/18

This Week

M45/18

Last Sale

S44/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2480

2364

2493

-13

2771n

-291

18

2413

2347

2425

-12

2389

+24

19

2288

2279

2304

-16

2154

+134

20

2259n

2247

2278

-19

2074

+185

21

-

2246

2260 (M)

-14 (M)

2048 (M)

+198

26

-

1523

1511 (M)

+12 (M)

1330 (M)

+193 (M)

28

-

1323

1308 (M)

+15 (M)

999 (M)

+324 (M)

30

-

1005n

1005 (M)

0 (M)

703 (M)

+302 (M)

MC

1093

1089n

1094

-1

1397n

-304

MOMENTUM STALLS BUT FOR HOW LONG?

The week to week national catalogue was reduced by 24% to 32,800 bales. The FRX was in favour of the A$ that dropped to a 3 year low below 70 cents. Many buyers were reporting that processors need to purchase wool after orders had been placed and the short term forecast for quantities in the low 30,000 range should have augured well for a rising market?? Not necessarily as one of the 2 big buyers for China was still cautious in their purchasing patterns securing only 4% (down on their usual 10/15%) of the volume bought. Their absence and a “sit and wait” approach by most other exporters saw the market drift by 8 cents to 1952 and 13 cents to 1361 in US$ terms with most falls on the final day of sales. The indicators gave up 10 to 20 cents as good style types barely moved while dustier wools came off as much as 50 to 70 cents in some cases.

The skirting market split into two as < 17 micron lost 20/30 cents while all others were solid to sellers’ favour. Cardings had a steadier sale as the East Coast indicators were unchanged to a touch dearer while in Fremantle their MCI gave up 25 cents to have all 3 markets within 5 cents of each other (1089 to 1094). Crossbreds  had subtle rises, up to 10 to 15 cents that continued to create new records since reporting these microns began, 1976 (30 micron) and 1983 for 28s and 26s within 20 cents of their all time record set in June, 2018.

Key data was released this week on Australian wool exports’ destinations and value. The season to March has volume exported down by 12% (an obvious fall in production) but an increase in value of 3% indicating just how good the market is going. Countries to lose volume were: China back by 17%, Czech Republic 36%, Egypt &Taiwan 24% and Malaysia down by 41%. China’s value was just 1% lower with India and Italy + 14%, Czech Republic -21%. The big mover is Thailand, their volume up by a massive 167% on the previous season and value climbed by 145%, a sign that more and more processing plants are relocating from other parts of Asia to the lower wages/costs countries. 33,300 bales are rostered next week. We will offer 1072 on Thursday and, hopefully, all exporters are operating to full capacity to secure the dwindling volume on offer.

Ag Concepts Fwd Prices as at 10 May, 2019

Micron

Date

Low

High

21

19-Jun-19

2260

2260

21

21-Aug-19

2240

2240

21 13-Nov-19 2125 2125

Main Buyers (This Week)

1

Fox & Lillie

3700

2

Aust. Merino

3473

3

Tianyu Wool

3355

4

Techwool

2880

5

Endeavour Wool

1294

6

Seatech Ind.

1181

Eastern Market Indicators (AUD cents/kg clean)

1952 cents ê 8 cents compared with 03/05/2019

Northern Market Indicators (AUD cents/kg clean)

1989 cents ê 8 cent compared with 03/05/2019

   AUD/USD Currency Exchange

0.6974 ê 0.0047 compared with 03/05/2019

3 May 2019

Friday, May 03, 2019

 WEEKLY MARKET REPORT 

Week Ending 3rd May, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/18

This Week

M44/18

Last Sale

S42/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2493

2390

2483

+10

2752n

-259

18

2425

2375

2404

+21

2345

+80

19

2304

2306

2291

+13

2086

+218

20

2278

2271

2264n

+14

1980

+392

21

2265n

2260

2238 (M)

+22 (M)

1964

+301

26

1515n

1511n

1450n

+65

1341n

+174

28

1303n

1308

1244

+59

998

+305

30

-

1005n

976 (M)

+29 (M)

706 (M)

+299 (M)

MC

1094

1082n

1084

+10

1377

-283

MOMENTUM BUILDING!

Wool sales recommenced this week following the Easter/ANZAC day holidays. After the market’s solid performance at the Easter Show hopes were high that the market had finally bottomed out and recovery was under way. The few buyers that were pre-valuing last Friday reported a bit of business being written and some mills being caught short for wool to process and the depreciation of the FRX by 1.5 cents also assisting any thoughts of ramping up purchasing patterns. The opening session saw 80% of the fleece selection in the good/best topmaking style (4/5) to see increases of up to 30 cents that lasted through to the final lots on the closing day. The AWEX EMI increased by 17 cents to 1960 but, as the A$ strengthened, this saw the market retreat in US$ terms - back by 21 cents to 1376. Most increases came in the good/best topmaking style types with the ever growing volume of poorer style wools losing ground to their superior counterparts - the gap between the good and inferior types widening.

Skirtings also benefitted from the renewed support as all descriptions lifted by 15 to 25 cents. Cardings shock off the run of falls to average 15 cent rises across the 3 centres. Crossbreds continued on their record breaking run as most microns jumped by 10 to 65 cents. This has a good 28 micron fleece type making 850 to 950 cents greasy and 26s over 1000 cents - incredible money!!

Talk of the market rising was spot on. Despite the national volume lifting to 43,000 bales (due to the 1 week recess) the extra wool was well absorbed by the buyers even with the absence of 2 of China’s largest indent buyers. Diminishing quantities over the next 3 sales (averaging 32,000 bales/week), the favourable FRX and fresh business being written all augurs well for a solid to dearer market for the immediate future.    

As is the case at the end of every month, latest AWTA figures were released. They showed a sharp decline in wool tested this April compared to 12 months ago 10%. The progressive total for the season was the same coming in at 10% less as offerings are just shy of 200,000 bales less than last season to date. The national catalogue drops back to 33,000 bales next week. If the Chinese indent buyers re-enter the market, price rises could be in the range of what was discussed earlier this week on the showfloor. Hope you are all getting the rain. 

Ag Concepts Fwd Prices as at 3 May, 2019

Micron

Date

Low

High

21

19-Jun-19

2250

2250

21

09-Oct-19

2125

2125

Main Buyers (This Week)

1

Techwool

6273

2

Tianyu Wool

5280

3

Fox & Lillie

3729

4

Aust. Merino

3250

5

PJ Morris

2656

6

Endeavour Wool

2530


Eastern Market Indicators (AUD cents/kg clean)

1960 cents é 17 cents compared with 18/04/2019


Northern Market Indicators (AUD cents/kg clean)

1997cents é 18 cent compared with 18/04/2019


AUD/USD Currency Exchange

0.7021 ê 0.0172 compared with 18/04/2019