Weekly Market Reports


28 June 2019

Friday, June 28, 2019

WEEKLY MARKET REPORT 

Week Ending 28th June, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S52/18

This Week

M52/18

Last Sale

S51/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2120

-

2217

-97

2872n

-652

18

2090

2068

2187

-97

2524

-434

19

2002

2016

2090

-88

2368

-366

20

1984n

2008

2071

-87

2346

-362

28

-

1060

1091 (M)

-31 (M)

1028 (M)

+32 (M)

30

-

835n

885 (M)

-50 (M)

695 (M)

+145 (M)

MC

961

921n

985

-24

1482

-521

SEASON ENDS ON A SOUR NOTE!

Hopes of a solid market faded early in the week as futures were traded as much as 50 cents lower than the spot price indicating yet another bad sale ahead. Both days had similar losses to see the AWEX EMI collapse by 51 cents to 1715, now at its lowest point since December 2017. The worst performing microns were 18.5 and finer that fell by an average of 100 cents while broader MPGs gave up another 80/90 cents as 25% of the national fleece catalogue was passed-in with low yielding, tender types 150 to 200 cents cheaper than their superior counterparts, the finer the micron the bigger the discount.

Room 2 wools weren’t as adversely affected as skirting’s fell by 50 to 70 cents. Cardings looked to be the least affected sector as the MCI fell by 24 cents to 961 as most types retreated by 10 to 50 cents. This puts the Carding Percentile at just 12% for the past 5 years, ie it has been higher 88% of the time over the past 5 years.  The peak of 1563 was September, 2018, a 44% fall to today’s level. With the only meaningful volume of XB wool available in Melbourne their quotes had 28/30 microns off by 30 to 50 cents.

The market has ended the season on a sour note at 1715, a 400 cent fall from the dizzy heights of mid August when it peaked at 2115, a 19% fall. The EMI spent 11 weeks above the 2000 cent mark and 19 sales in the 1900s and 15 weeks below 1900.The month of June has seen a massive drop in the EMI, falling by 172 cents (9.1%), second only to the biggest monthly fall of March of 1991 when the Reserve Price Scheme was abolished. The year on year figures of wool offered show a drop of 11.9% - 225,180 bales less than last season. The actual volume sold was 296,325 bales less (16.6%) than last season. The FRX has had little movement over the year, depreciating by 3.63 cents with the pass-in rate climbing to 10.5% for the season from 5.6% the previous year. Is this the end of the “super-cycle” that started in 2016?? Despite the falls in the latter part of the season the 3 regional indicators are all higher than the commencement of the 2017/18 season.

Reasons are varied for the fall from grace for wool prices. As the global economy slows and consumer spending patterns tighten, excess stock of wool products from garments to tops are being reported in China. This, combined with the ongoing trade war (US/China), Brexit troubles and the attacks on the two oil tankers in the Middle East, we are sailing into uncertain times as global confidence wanes. Buyers are reporting no change in direction for the wool market to open the new season.

Ag Concepts Fwd Prices as at 28 June, 2019        

Micron

Date

Low

High

21

11-Dec-19

1900

1920


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.

Main Buyers (This Week)

1

Tianyu Wool

2914

2

Aust. Merino Exp.

2302

3

Techwool

2240

4

Endeavour Wool

1940

5

Fox & Lillie

1927

6

PJ Morris Wool

1406

Eastern Market Indicators (AUD cents/kg clean)

1715 cents ê 51 cents compared with 21/06/2019

Northern Market Indicators (AUD cents/kg clean)

1731 cents ê 58 cent compared with 21/06/2019

   AUD/USD Currency Exchange

0.6994 é 0.0102 compared with 21/06/2019

21 June 2019

Friday, June 21, 2019

WEEKLY MARKET REPORT 

Week Ending 21st June, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S51/18

This Week

M51/18

Last Sale

S50/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17.5

2210

2167

2262

-52

2702n

-492

18

2187

2138

2238

-51

2538

-351

19

2090

2099

2144

-54

2374

-284

20

2071

2073

2128n

-57

2356

-285

21

2068n

2068

2120 (M)

-52 (M)

2344 (M)

-276 (M)

28

-

1091

1101 (M)

-10 (M)

1048 (M)

+43 (M)

30

-

885n

914 (M)

-29 (M)

699n (M)

+186 (M)

MC

985

953n

997

-12

1495

-510

FINALLY, IS THIS THE BOTTOM?!!

Just when we thought the wool market couldn’t get any worse it did. The AWEX EMI collapsed by another 57 cents to 1766, eclipsing the low point in early November (EMI at 1776) and now at its cheapest level since March, 2018. All MPGs fell by 45 to 60 cents with even the good spec types not immune from the lack of support for the first time in many weeks. 20% of fleece wool was passed-in on the first day as some lots were up to 100 cents cheaper or completely neglected.

Skirtings suffered the same fate as their fleece cousins, low VM (< 3%) with good L&S results lost 20 to 30 cents while the dusty, burrier types falling by 50 to 80 cents. Cardings continued their losing run as LKS remained unchanged while STN/CRT gave up another 20 to 40 cents. Crossbreds also couldn’t muster any support either as falls ranged from 10 to 30 cents for most types.

Buyer support was almost non-existent on the opening day as the market was almost in freefall despite the smallest weekly offering for exactly 10 years (19,000 bales) and the A$ falling below 69 cents and losing 1% against the Chinese Yuan. A lot of showfloor talk centred around the obvious lack of business and also possible defaults on payments through the processing pipeline - ie letters of credit (LCs) not being honored as financing issues for manufacturers bite as tight cash flow situations are hampering normal business practices. We could be at an attractive price that might see commitment to do business but the ongoing finance troubles and lack of supply to cover too much forward exposure is making mills hesitant to write big volumes of wool.

Most manufacturers sat out of the market as prices descended to what should be favourable levels but retailers are very hesitant to place new orders as consumer demand falls amidst slowing economic growth globally, Brexit uncertainty and the ongoing US/China tariff war restricting confidence. The movement of tops, carbo and yarn to fabric and garments is essential for the predictability of demand through the entire supply chain.

Despite the big opening day’s losses there was a definite change of attitude on the final day as prices steadied and losses were kept to a minimum even with the largest Chinese indent buyer still sitting on the fence and one of the other operators still purchasing but not to their full extent. We thought the bottom was a few weeks ago (1833) but the market has lost 121 cents over the past 3 sales. Hopefully this is it?? Will supply over-rule demand as SA now go into recess till mid August? With 3 sales to go here we are the only source of global supply in the short-term. A few buyers this morning thought that the market might hold at these levels after a bit of inquiry overnight and some business being written. Let’s hope so!!

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.

Main Buyers (This Week)

1

Techwool

2167

2

Tianyu Wool

1472

3

United Wool Co.

1465

4

Aust. Merino

1338

5

Michell Aust.

1176

6

Fox & Lillie

1163

Eastern Market Indicators (AUD cents/kg clean)

1766 cents ê 57 cents compared with 14/06/2019

Northern Market Indicators (AUD cents/kg clean)

1789 cents ê 53 cent compared with 14/06/2019

   AUD/USD Currency Exchange

0.6892 ê 0.0020 compared with 14/06/2019

14 June 2019

Friday, June 14, 2019

 WEEKLY MARKET REPORT 

Week Ending 14th June, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S50/18

This Week

M50/18

Last Sale

S49/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17.5

2262

2208

2345

-83

2689

-427

18

2238

2194

2318

-80

2503

-265

19

2144

2141

2193

-49

2281

-137

20

2128n

2125

2179

-51

2266

-138

21

-

2120n

2184 (M)

-64 (M)

2295 (M)

-175 (M)

22

-

2117n

2156 (M)

-39 (M)

2274 (M)

-157 (M)

28

1093n

1101

1115n

-22

1013

+80

30

-

914n

939 (M)

-25 (M)

694 (M)

+220 (M)

MC

997

975n

1021

-24

1476

-479


NOT OUT OF THE WOODS YET

The market continued on its downward trend as the AWEX EMI lost 41 cents to 1823, its lowest point since early November when it fell to 1776. The past fortnight has seen the EMI lose 64 cents, completely wiping out the 54 cent rise of 3 sales ago. The slight fall in the A$ to low 69 cents didn’t help at all as the EMI in US$ terms gave up 39 cents to 1260. Finer types < 18.5 bore the brunt of the losses - 75 to 100 cents regardless of quality as the higher volume and low yields coupled with subdued demand take their toll on this sector. 19s and broader were wound back by 40/50 cents and, as has been the standard practice for some time in a falling market, better style wools (19 to 22 micron) with good specs were not discounted as much as the inferior, tender, dusty types.

The skirting sector also fell but not to the extent of the fleece types, as 10 to 30 cent losses covered most wools. Cardings fell by 10/20 cents for LKS and CRT while STN gave up 60 to 80 cents to see the MCI fall below 1000 cents, the lowest point for 5 years. Crossbreds weren’t immune from the falling trend as losses looked to be about 20 cents for 25 to 30 micron.

Processors and topmakers dominated the merino market and firm offer forward contractors held sway in the crossbred sector. The two large Chinese indent buyers were very quiet again this sale bar the final day that saw one of them increase their buying activity.

Industry discussion on welfare standards are never far off the agenda and recently the issue of use of pain relief products has been at the forefront. The good news is that there is beginning to be a realisation in some sectors internationally that Australian woolgrowers do practice best welfare standards particularly when pre and post anaesthetic and analgesia are used. The national wool declaration unfortunately only shows a 35% uptake of these products but the figure is likely to be a lot higher. Woolgrowers (merino and crossbred) have little to lose and everything to gain by getting right behind both the NWD and use of pain relief products. We need to protect our rights to grow wool and run our sheep the way we want to without either Govt. or anyone else using a big stick. Next week a very small offering in two centres of just over 20,000 bales should see the ship steady.

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 14 June, 2019

Micron

Date

Low

High

21

14-Aug-19

2030

2030

21 23-Oct-19 1980 1980

Main Buyers (This Week)

1

Techwool

2618

2

Tianyu Wool

2285

3

Fox & Lillie

2226

4

Aust. Merino

2117

5

United Wool Co.

1842

6

Endeavour Wool

1605

Eastern Market Indicators (AUD cents/kg clean)

1823 cents ê 41 cents compared with 07/06/2019

Northern Market Indicators (AUD cents/kg clean)

1842 cents ê 41 cent compared with 07/06/2019

   AUD/USD Currency Exchange

0.6912 ê 0.0059 compared with 07/06/2019

7 June 2019

Friday, June 07, 2019

WEEKLY MARKET REPORT 

Week Ending 7th June, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S49/18

This Week

M49/18

Last Sale

S48/18

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17.5

2345

2271

2388

-43

2693

-348

18

2318

2253

2361

-43

2519

-201

19

2193

2192

2211

-18

2271

-78

20

2179

2186

2197

-18

2256

-77

21

2174n

2184

2214 (M)

-30 (M)

2254

-80

22

-

2156n

2175 (M)

-25 (M)

2242n (M)

-86 (M)

28

1115n

1121

1125n

-10

1020n

+95

30

-

939n

935 (M)

+4 (M)

698 (M)

+241 (M)

MC

1021

992n

1036

-15

1479n

-458

MARKET CONTINUES ON ROLLER COASTER RIDE!!

The fickle nature of the wool market was no more evident than this week as, after a good recovery last series, the lack of any further sales with very little business written saw the market give up half of last week’s gains. The EMI fell by 23 cents to 1864 with little movement in the EMI in US$ terms (-7) to 1299 as the A$ ascended to a high point of 70 cents following the RBA’s announcement on Tuesday that saw interest rates cut to 1.25% and another cut sooner rather than later to try and stimulate the economy. All sectors of the market fell. Merino fleece indicators lost 20 to 45 cents with only the high yielding, low VM types with good AM results unaffected or even up to 20 cents higher with the inferior wools on the receiving end of large discounts (one dominant topmaker not competing on < 55% yield fleece wools). Skirtings took a battering as losses ranged from 40 to 60 cents. Crossbreds lost 10 to 30 cents depending on micron while in the Carding sector LKS and STN gave up 10 to 30 cents while CRT escaped the carnage as the MCI in Melbourne fell below 1000 cents to 992. Cardings have been belted since last September’s peak when the 3 centres averaged 1583, a fall of 567 cents to this sale’s average of 1016, a 36% fall.

Why the sudden change of sentiment?? That is anyone’s guess. Most traders were reporting that all the enquiry and new business for last sale was just that, a one week peak and back to a stalemate. The two biggest Chinese indent buyers were still virtually inactive with the slack taken up by their 2 largest topmakers and a few mills were reluctant to commit orders for this week’s sale with only 21,700 on offer. Also on the horizon, literally, is wool arriving from South Africa (10,000 to 15,000 bales) into China following the FMD embargo being lifted and a slight glut of wool to be processed there. Next sale has 29,000 bales on offer which might convince the fence-sitters to re-enter the market confident that the wool they need to buy is available. AWTA reports May testing figures are 17% less than May last year and progressive figures for the season are 11% behind the previous season - 302 mkg compared to 339 mkg.

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 7 June, 2019

Micron

Date

Low

High

21

11-Sep-19

2080

2120

21 27-Nov-19 2075 2075

Main Buyers (This Week)

1

Tianyu

2457

2

Fox & Lillie

2050

3

Techwool

1862

4

Aust. Merino

1848

5

Michell Aust.

1370

6

United Wool Co.

1300

Eastern Market Indicators (AUD cents/kg clean)

1864 cents ê 23 cents compared with 31/05/2019

Northern Market Indicators (AUD cents/kg clean)

1883 cents ê 26 cent compared with 31/05/2019

   AUD/USD Currency Exchange

0.6971 é 0.0046 compared with 31/05/2019