Weekly Market Reports


23 September, 2020

Friday, October 23, 2020

 WEEKLY MARKET REPORT

Week Ending 23th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S17/20

This Week

M17/20

Last Sale

S16/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1846

1820n 1777
+69 1922 -76

18

1622

1615

1543

+79

1865

-243

19

1419

1390

1309

+110

1789

-370

20

1292

1283

1177

+115

1748

-456
21 1243n 1204 1140n +103 1743n -500
 26 883n 886n 753n +130 1160n -277

28

663n

673

520n

+143

899n

-236

MC

811n

816n

763n

+48

987n

-176

SIX MONTH HIGH!!

An explosive opening to this week’s sale as the 1st day’s rise of 123 cents (up to 1240) was 2nd only to the 130 cent daily climb in September, 2019 (S11) in the 20 years of market reporting by AWEX. Prices did soften in the final session in what was quite a week for wool sales. By week’s end the AWEX EMI had added 102 cents to finish at 1219 - its highest point since late April - this surge in the market now stretching back 7 weeks to see a gain of 360 cents (38%). In US$ terms the 1.2% fall in the FRX assisted in holding the EMI in check somewhat rising by 62 cents to 863. Rises for fleece wools ranged from 70 to 130 cents while the skirting selection had a very tight price rise with all types increasing by 100 to 110 cents. Cardings also kept up with their merino combing counterparts and didn’t really suffer any downward adjustment in the final session to add 30 to 80 cents across all types in this sector. Each centre MCI averaged a 45 cent rise to see the 3 MCIs well and truly aligned in price (811 to 816 cents). Crossbreds were also swept up in the price rising frenzy but unlike the merinos which fell on the final day - they added to their values to finish the sale up by 90 to 130 cents (15 to 30%).
After last week’s hefty rises (95 cents) and the 100 cent lift a month ago, all participants were wondering when the inevitable correction would come as it would be a case of when not if. There was a downward price adjustment after the big lift 4 weeks ago, but the recovery was swift - just 1 sale to recover the losses. After the big rise last week many thought this sale would be under pressure but show floor talk of 50 cents or more was commonplace - even with quantities growing by over 5,000 bales after last week’s sale had concluded. It’s always a given that when the wool market rises so rapidly there is a rush to offer wool. Next week is no exception, week to week forecasts have gone up by 6.5% (2,150 bales) from last Monday to this Monday - the latest figure being 44,000 bales up by 20% (8,700) from earlier in the week. Buyers have said for months now that with the reduced demand, the market can only absorb up to 35,000 bales/week - so next week’s quantity could be problematical for the increased volume at current price levels. Since the price recovery started in September the average weekly offering has been 26,800 bales - a big factor in why the market has jumped to its current level from the low point of 858 cents in early September. The volatility over the past 12 to 18 months has been dramatic, the EMI has moved more than 30c/kg on 40% of the auction days so far this season. For a smooth upward trajectory to continue we need a steady increase of demand - not all in and then sitting on the fence as has been the pattern for a long time. Demand for sweaters and uniforms out of China is good hence the latest price rises. Talk that Indian processors look to be recommencing work while Europe is still battling the 2nd wave of the Pandemic leaves us with key markets outside of China struggling to sell woolen garments and fabrics but there is light at the end of the tunnel.

A few ram sale results: Grogansworth at Bowning cleared 97% for a top price of $7,500 averaging at $2,625; Merrignee at Boorowa averaged $2,260 clearing 93% for a top of $4,500; Grassy Creek at Reids Flat sold all 152 rams to average $2,970 with a top of $9,000. Egelabra at Warren also achieved a top of $9,000 averaging $2,975 for all 158 rams offered and Glenwood at Wellington sold all but 2 of their 140 rams penned to average $3,100 with a top of $12,000.

The softer market late this week looks to continue next week under the weight of the largest catalogue since early August.


        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1180

Main Buyers (This Week)

1

Techwool Trading

4,703

2

Endeavour Wool

3,736

3

Lempriere (Aust)

2,248

4

United Wool Co

2,078

5

Fox & Lillie

2,006

6

Australian Merino

1,877

Eastern Market Indicators (AUD cents/kg clean)

1219 cents ê 21 cents compared with 20/10/2020

Northern Market Indicators (AUD cents/kg clean)

1278 cents ê 19 cents compared with 20/10/2020

   AUD/USD Currency Exchange

0.708 é 0.0038 compared with 20/10/2020

16 October, 2020

Friday, October 16, 2020

 WEEKLY MARKET REPORT

Week Ending 16th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S16/20

This Week

M16/20

Last Sale

S15/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1777

1732n 1626
+151 1898 -121

18

1543

1532

1402

+141

1850

-307

19

1309

1304

1195

+114

1763

-454

20

1177

1160

1069

+108

1722

-545
21 1140n 1145 1030n +110 1712n -572
 26 753n 748 693n +60 1160n -407

28

520n

515

484n

+36

899n

-379

MC

763n

754n

732n

+31

987n

-224

HOW QUICK THE SENTIMENT CAN CHANGE!!

The market exploded into action this week as buyers were desperate to secure wool from the opening lot to the final fall of the hammer in Fremantle on Wednesday. It was tipped to be a sedate series late last week with most good judges talking a firm market to sellers. Favour changed late on Friday when the enquiry started from China and kept coming all weekend. As one buyer said, “we got smashed,” with agents keen to book up any type of wool. Futures pointed to gains of 40 cents and the market didn’t disappoint as the AWEX EMI climbed by 44 cents on the opening day. This was followed by even higher rises in the final session (51 cents) to finish the week at 1117, a rise of 95 cents (9.1%). The rise in US$ terms was almost as impressive - a 74 cents gain to 801 - despite the FRX ascending by 0.65% to 71.75 cents. All fleece types were swept up in the dash to secure quantity as all microns climbed by 110 to 150 cents regardless of any discounts on faults. Some of the better superfine (< 18 micron types) were up 200+ from last week’s quotes. Just 36 bales of fleece were passed-in in Sydney - a clearance rate of 99.25%. The skirting sector performed just as good with all types across all microns adding 3 digits to last week’s values. Finer than 18.5 rocketed up by 130 to 180 cents while the broader microns added 110 to 150 cents. Once again, growers liked the new price levels as just 10 bales (0.6%) failed to sell in Sydney. Cardings also enjoyed price rises but not quite to the extent of their combing counterparts. All types < 17.5 micron lifted by 90 to 120 cents while the broader wools were 30 to 60 cents to the good as the 3 MCIs now range from 788 to 754 cents. Crossbreds, like the carding sector, didn’t have the hype of the merino combing wools but still rose 50 to 70 cents for 27.5 and finer and 30 to 40 cents for the coarser types.

Traders were again the dominant force in pushing the market up with 1st stage manufacturers appearing in the top 5 buying positions for merino skirtings and cardings. Risk mitigation is key in these trying times and the buy and sell prompt methodology is working in favour of the inventory building traders. The frantic enquiry over the weekend and the steep opening session’s price rises didn’t deter Chinese mills from baulking at the new levels which could form a basis for the foreseeable future. One buyer told us every bale they bought on Tuesday was sold by 7:00 that night. The EMI now sits just 7 cents below the Sale 2 level with < 19 micron all higher than in July - before the rot set in when sales resumed in August. Since the resumption the market has collapsed and then recovered 276 cents, most of that over the past 6 weeks. Fremantle had its largest daily gain (113 cents) since September 2019.

Whilst the news of this current price recovery and a possible “floor” in the price is welcome, there is still a long way to go before we can assume all is good with the wool market. Many global factors will influence market direction. The geopolitical nature of the Pacific rim is a concern for all countries when trade is mentioned. As Australia has seen recently diplomatic tensions have led to bitter trade tensions between China and Australia that have seen crippling tariffs placed on our wine, barley and beef exports into China. The latest victim looks to be cotton (an $800m export market) with Chinese mills told not to buy Australian cotton with the threat of a 40% tariff being imposed. Cotton millers are given an import quota each year and have been told they may not receive this allowance if they continue to buy our cotton. Worrying times indeed.   

Futures have traded at a good premium to the spot price indicating another good market next week.


                                                   Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1110

Main Buyers (This Week)

1

Endeavour Wool

4,263

2

Australian Merino

3,103

3

Techwool Trading

2,578

4

Fox & Lillie

2,350

5

PJ Morris Wool

1,611

6

Tianyu Wool

1,169

Eastern Market Indicators (AUD cents/kg clean)

1117 cents é 51 cents compared with 13/10/2020

Northern Market Indicators (AUD cents/kg clean)

1184 cents é 56 cents compared with 13/10/2020

   AUD/USD Currency Exchange

0.717 é 0.0004 compared with 13/10/2020

9 October 2020

Friday, October 09, 2020

 WEEKLY MARKET REPORT

Week Ending 9th October, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S15/20

This Week

M15/20

Last Sale

S14/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1626

1608n 1591 +35 1902 -276

18

1402

1403

1382

+20

1867

-465

19

1195

1181

1160

+35

1788

-593

20

1069

1058

1049

+20

1762

-693
21 1030n 1027 1010n +20 1753n -723
 26 693n - 678n +15 1170n -477

28

484n

483

469n

+15

940n

-456

MC

732n

701n

730n

+2

991n

-259

MOST LOSSES RECOVERED!!

As we forecast last week the EMI rose back through the 1000 cent barrier adding 26 cents to its value to finish this series at 1022. An FRX rate that remained flat throughout the sale had the EMI in US$ terms up by 19 cents to 727. Finer fleece types (< 17.5 and 19s) edged higher by 30 to 40 cents with discounts for overlength, tender, VM and high mid-breaks almost non-existent with these wools selling for levels usually reserved for European types while all other microns added 20 to 25 cents with most growers happy to accept these price rises as just 4% was passed-in.  The skirting catalogue had an identical sale as < 17.5 rose by 30 to 50 cents; 17.5 to 18.5 were quoted 25/40 dearer while broader types across all VM levels added 20 to 30 cents. Again growers were happy to accept these price increases clearing 97%. Cardings had a very solid sale as all types were quoted as sellers’ favour. Crossbreds also staged some sort of comeback with all microns lifting from 15 to 35 cents.

Opinion was divided as to which way the market would go. One of our well informed sources said the market would be solid to dearer but other exporters were tipping firm to buyers’ favour. As the opening day progressed the “fence sitters” had to re-enter the market to avoid buying wool at the dear point of the series. Traders dominated the fleece sector with first stage processors calling the shots for all other types. Chinese demand is still dominant but, as each week goes by, small pockets of enquiry from India and Europe are becoming more evident. Even as greasy prices improve the retail sector is still very cautious to commit to placing new season orders as big volumes of old (or out of season inventory) is sold to the consumer hopefully as at small profit or break-even point but signals from retail on a macro level are on the improve. The elephant in the room is still Covid-19 and the race to find a vaccine is still at the forefront of all Western governments desperate to get the masses back to work to get economies growing again without having to go deeper into debt with more stimulus packages. The more chance consumers have to go shopping and spend money on discretionary goods such as wool the quicker the market has the chance to recover to acceptable levels.

A few more Ram sale results: Parkdale at Dubbo sold 115 rams for a top price of $8,200 to average $1,795; Boxleigh Park at Wellington cleared 95% with a top of $3,750 to average $1,860 for their mix of Poll and Horn rams; also at Wellington Mumblebone averaged $2,920 to clear all but 2 of the 260 rams offered with a top of $14,000; Bundilla at Young sold all but 5 of the 300 rams on offer to average $3,790 ($520 higher than last year) with a top of $11,000 twice and Charinga in Victoria achieved a top of $38,000, an average of $4345 for 141 Poll rams and Horned rams average $2,680.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

1030

Main Buyers (This Week)

1

Techwool

3885

2

Lempriere

3505

3

Endeavour

2812

4

United Wool

2213

5

Tianyu Wool

1191

6

Fox & Lillie

1136

Eastern Market Indicators (AUD cents/kg clean)

1022 cents é 40 cents compared with 02/10/2020

Northern Market Indicators (AUD cents/kg clean)

1076 cents é 23 cents compared with 02/10/2020

   AUD/USD Currency Exchange

0.7118 é 0.0002 compared with 02/10/2020

2nd October, 2020

Friday, October 02, 2020

 WEEKLY MARKET REPORT

Week Ending 2nd September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S14/20

This Week

M14/20

Last Sale

S13/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1591

1572n 1611 -20 1872 -281

18

1382

1363

1407

-25

1840

-458

19

1160

1136

1208

-48

1739

-579

20

1049

1025

1104

-55

1699

-650
21 1010n 1003 1075n -65 1684n -674 
 26 678n - 668n +10 1150n -472

28

469n

465

489n

-20

908n

-439

MC

730n

696n

723n

+7

1005

-275

EMI UNDER 1,000 BUT JUST FOR ONE DAY!!

The wool market was unable to sustain its mini recovery this week as prices softened across most sectors. A combination of factors from softer enquiry levels, urgency for prompt shipment abating and the increase in volume by 7,700 bales to 31,000 (the largest catalogue since mid August) was the impetus for buyers to take their foot off the pedal and take a step back from the buying patterns of the past 3 sales. The AWEX EMI retreated by 40 cents to 996 (-4%) and gave up 30 cents in US$ terms to 709 as the FRX softened by a third over the course of the sale to 71 cents to have nil impact on price direction. All fleece types lost 20 to 60 cents, the discounts followed the microns, increasing as the wools got broader. The skirting selection followed the same pattern as their fleece counterparts - just a 20 cent fall for < 17 micron as broader types across all descriptions fell by 40/60 cents. Cardings had a mixed sale as < 17.5 LKS gave up 30/40 cents while the broader types added 10 to 15 cents with merino and XB lambs gaining 20 to 50 cents with STN/CRT fully firm. These movements saw the MCI up by 7 cents to 730. Crossbreds opened the sale on a dearer note (+10 cents) but 28s and coarser lost 30 cents in the final session to finish the sale cheaper. As the sale progressed buying became more widespread across all types. Merino fleece was dominated by traders with all sectors in room 2 (skirtings, cardings and XBs) coming under more pressure from 1st stage manufactures and processors - a good sign of interest being reignited down the processing pipeline. The light at the end of the tunnel is still on the dim side but may become brighter in the run to Christmas. Intertextile Shanghai was held last week with Chinese fabric producers showing off their collections for Autumn/Winter 2021-22 with good levels of enquiry for samples and price requests. This does not lead to a full blown recovery but a bumpy ride with some speculators talking more upside soon as the August slump was an over-reaction, but on the flipside the 3 week rise we saw was over-reaction in the other direction - who’s right or wrong?? Recent HIS market surveys of PMIs (purchasing managers intentions) the US services sector fell from a 17 month record high but manufacturing was up on the previous month. This was a similar scenario in Europe.

AWTA released its September testing figures with a surprising jump of 7.8% more wool tested than September 2019.This could be a result of some growers shearing early to avoid a clash of shearing with (hopefully) the big harvest just around the corner. The cumulative figures for the 1st quarter of the year show an identical fall (7.8%) in wool tested when compared to last season 57.5mkg to 62.4mkg.

Some ram sale results from the past week: Allendale at Wellington had a top price of $4,000 to clear 87% with the average increasing by $85 to $1870; Cassilis Park Cassilis offered a mixture of Polls, Horns and Megas to sell all but 1 ram from 80 offered to average $2,145 with a top price of $6,400; Dunbogan at Elong sold all 56 rams on offer to average $2,245 with a top of $4,000 four times. Langdene at Dunedoo cleared 98% of their draft of Polls and Horned rams to top at $6,500 twice to average $3,230 up by $200 on last year; Bogo at Yass sold all 169 rams with a top of $5,000 to average $2,805; Richmond at Quandialla sold all 110 rams to average $2,275 up by $336 from last year with a top of $10,000. A $15,000 top price was achieved by One Oak Poll at Jerilderie to average $2,435 clearing 95%; also, at Jerilderie, Willandra had a top of $13,000 to average $2,735 to clear 91%. Show floor chatter is for a firm market next week with the EMI to break through 1000 cents again.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

990

Main Buyers (This Week)

1

Techwool

3855

2

Lempriere

2646

3

Endeavour

2570

4

Aust. Merino

1873

5

Fox & Lillie

1721

6

Tianyu

1114

Eastern Market Indicators (AUD cents/kg clean)

996 cents ê 40 cents compared with 25/09/2020

Northern Market Indicators (AUD cents/kg clean)

1053 cents ê 33 cents compared with 25/09/2020

   AUD/USD Currency Exchange

0.7116 é 0.0017 compared with 25/09/2020