Weekly Market Reports


13 September 2019

Friday, September 13, 2019

WEEKLY MARKET REPORT 

Week Ending 13th September, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S11/19

This Week

M11/19

Last Sale

S10/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1930

1969

1842

+88

3008

-1078

18

1853

1874

1783

+70

2708

-855

19

1755

1833

1578

+177

2439

-684

20

1682

1785

1497

+185

2303

-621

21 1645n 1769 1487n +158 2274 -629
26 1165n - 1100n +65 1493n -328

28

953n

961

853n

+100

975

-22

30

813n

818n

703 (M)

+115 (M)

738n

+75

MC

906n

1007n

814n

+92

1563

-657

HISTORIC RISES BUT WHERE TO FROM HERE??

What an incredible week for the market as the recovery was nothing short of spectacular. After last sale’s stable market and signs of a level being found last Thursday, futures trading was pointing to a 30/40 cent lift and by Tuesday night predictions were in the 80 to 100 cent range. Both were wrong! The sale in Sydney was condensed to a one day sale due to lack of quantity with gains of 70 to 90 cents for < 18 micron and the broader types 130 to 185 higher. The AWEX EMI added 170 cents to 1535 - the largest weekly gain on record - with the 130 climb on Wednesday the biggest daily rise of all time. Skirtings added 80 to 100, XBs rose 65 to 100 and cardings put on 50 to 100 cents. Despite this steep rise for all sectors, the pass-in rate was 6.2%

After loosing 389 cents (24.5%) since the resumption of sales over the past 5 weeks the market made a stunning comeback to gain 170 cents (12.2%) in one week to wipe out 44% of the losses.  Buyers were frantic to secure quantity as discounts shrank and premiums for better types rose to extreme levels. As one buyer said, “Exporters stopped selling the market down” as the volume of wool on offer compared to the wool actually sold over the past 5 sales had declined by 40/50% due to the high passed-in rates and withdrawn lots. Another factor was the sudden rush of woolen clothing imported to the US from China before last week’s additional 15% import duty came into effect as US retailers tried to beat the 1st September deadline. For June and July the year-on-year % of wool imports rose by 30%. This major increase in exported clothing may have left some manufacturers short on stock in China and with small offerings to pick from, panic looks to have set in. Also adding to the good news was the softening stance between the US and China over tariffs and agreeing to a resolution may not be just a dream but reality sooner rather than later which can only help consumer confidence north of the equator.

Kerin Poll held their ram sale this week with a total clearance of 450 rams to average $2500 topping out at $10,000. At the feature sale in Adelaide 2 rams were bought by syndicates for $100,000 (poll) and $72,500 (horn). These results augur well for the stud selling season despite the on-going drought and less ewes to join and maybe not as many rams needed for upcoming joinings. After the overdone falls in August and this sale’s correction anything is possible in this current volatile market. Who knows what for next week??

Ag Concepts Fwd Prices as at 13 September, 2019       

Micron

Date

Low

High

21

27-Nov-19

1520

1535

21

22-Jan-20

1600

1600

Free knitted woollen jumpers for poddy lambs. Call into our office in Dubbo or Macdonald Rural at Brewarrina and take as many as you need. Many colours and styles to choose from!

Main Buyers (This Week)

1

Fox & Lilliel

3267

2

Techwool

1997

3

Modiano

1334

4

Endeavour Wool

1303

5

PJ Morris

1298

6

Aust. Merino

972

Eastern Market Indicators (AUD cents/kg clean)

1535 cents é 170 cents compared with 06/09/2019

Northern Market Indicators (AUD cents/kg clean)

1534 cents é 126 cents compared with 06/09/2019

   AUD/USD Currency Exchange

0.6878 é 0.0059 compared with 06/09/2019

6 September 2019

Friday, September 06, 2019

WEEKLY MARKET REPORT 

Week Ending 6th September, 2019

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S10/19

This Week

M10/19

Last Sale

S09/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1842

1823

1845

-3

2989

-1147

18

1783

1747

1795

-12

2669

-886

19

1578

1582

1593

-15

2443

-865

20

1497

1481

1515

-18

2324

-837

21 1487n 1477 1499n -12 2285 -798
26 1100n - - - 1486n -386

28

853n

849

843n

+10

968

-115

30

-

703

698n (M)

+5 (M)

739 (M)

-36 (M)

MC

814n

821n

806n

+8

1563

-749

IS THIS THE BOTTOM??

This week’s market started off poorly but rebounded in the final session to give a glimmer of hope that the market may have finally bottomed out. By week’s end the AWEX EMI lost just 10 cents to 1365 with a slight lift in US$ terms (6 cents) to 931. All MPGs fell ranging from 5 to 20 cents with the very odd best style Italian lot fetching 30 to 60 cents higher than their indicators. The renewed buyer interest flowed through to Room 2 as skirtings lifted by 30/50 cents, cardings added 30 to 60 cents and XBs looked up to 10 cents dearer.

Finally the market came off the descending elevator to find the stairs. After a horror August which saw the market shed 379 cents (23.8%), the largest monthly % decline in 28 years, the market recorded its first daily rise since Sale 2 on Thursday to hopefully stop the rot. The EMI is a massive 723 cents (34.6%) lower than a year ago, meaning just 10% was lost in the period from August 2018 till end of July. The “super-cycle” that most analysts talk about is certainly over. This is the 5th such cycle since the market’s big jump in 1988. Reasons for the downturns in the market after theses super-cycles are varied and all not related to the wool market, rather global external factors. If we look at the 4 downturns this century: 2003 to 2005 with the SARS outbreak in China the EMI fell 608 cents (49%) to a low of 632; the GFC period of 2008/09 saw a 328 cent drop to 721 (31%); from 2011 to 2012 a 35% (501 cents) fall to 933 was due to the massive cotton stockpile that China had built up after the GFC; and, of course, this current downturn which hopefully is nearing its end.

Now we are faced with new global challenges that will take time (up to 2 years according to some economic experts) to sort out from Brexit to the US/China trade wars which took a new twist this week. As of Monday the US lifted tariffs by 10% on a vast range of imports from China (worth $300B) from 20% to 30% but for woolen clothing the tariff was raised by 15%. Have prices “overshot” their high and low points?? Many believe so and the fundamentals of supply and demand get lost in the over-correction when the market goes in either direction. Many traders believe the market reached an unsustainable height last year and this current correction has gone too far. Hopefully the market can maintain the level it finished at on Thursday.

Ag Concepts Fwd Prices as at 30 August, 2019       

Micron

Date

Low

High

21

16-Oct-19

1500

1500

21

20-Nov-19

1500

1500

Free knitted woollen jumpers for poddy lambs. Call into our office in Dubbo or Macdonald Rural at Brewarrina and take as many as you need. Many colours and styles to choose from!

Main Buyers (This Week)

1

Techwool

2778

2

Fox & Lillie

2152

3

Endeavour Wool

2118

4

Tianyu Wool

1778

5

G Schneider

1077

6

PJ Morris

1044

Eastern Market Indicators (AUD cents/kg clean)

1365 cents ê 10 cents compared with 30/08/2019

Northern Market Indicators (AUD cents/kg clean)

1408 cents é 3 cents compared with 30/08/2019

   AUD/USD Currency Exchange

0.6819 é 0.0090 compared with 30/08/2019