Weekly Market Reports


10 July 2020

Friday, July 10, 2020

 WEEKLY MARKET REPORT

Week Ending 10th July, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S02/20

This Week

M02/20

Last Sale

S01/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1638

1658

1586

+52

2175

-537

18

1428

1434

1408

+20

2143

-715

19

1279

1274

1284

-5

2043

-764

20

1229

1253

1221

+8

2033

-804

21 1228n 1253 1200n +28 2037 (M) -784 (M)
 26 - 866 816 (M) +50 (M) 1373n (M) -507 (M)

28

574n

564

564(M)

0 (M)

1045

-471

30

-

466n

466 (M)

0 (M)

861 (M)

-395 (M)

MC

801n

832n

801n

0

1010

-209

A STRONG FINISH!!

Too much wool on offer with the subdued demand for exporters to handle?? Or the realisation that, with the looming 3 week winter recess upon us, this week’s sale would be their last chance to buy any meaningful quantity of wool till early August. Luckily for growers selling in this series the latter came into play. There was a real concern that the 35,000 bales on offer was going to be more than enough for the orders that were placed and a cheaper trend was on the cards, especially for us who were selling last on the final day with the 3rd largest catalogue in Sydney (1550 bales). This was far from the case as a cautious approach by buyers on the opening day pushing the market into sellers’ favour led to a more frantic buying urgency in the final session till the final lots were sold. This saw the AWEX EMI adding 18 cents to 1134. In US$ terms a 14 cent gain to 787 was the result as the FRX looks to be stuck at a whisker below 70 cents - virtually identical to a year ago. Finer and broader fleece types were the beneficiaries of the renewed competition with < 18 and > 21 microns lifting by 20 to 50 cents while 18.5s to 20.5 were just dearer while, in Melbourne, 17.5s rose 90 cents and 21s gained 60 cents. All descriptions of skirtings gained 20 to 30 cents while cardings finished the series just in buyers’ favour. Crossbreds followed the lead of their merino counterparts with prices ascending by as much as 20 to 50 cents. In a coup for our new partnership with Carmicheal & Co. they offered the largest XB catalogue in Sydney this week, 23% bigger than any other broker. Together we had a combined catalogue of 425 bales of XB wool. 

A good finish to the market as we head into a well earned 3 week recess after what can only be described as a 6 month period that as far as the health and economic destruction of the globe has been, historically it will be judged as bad or worse than anything preceding it. Other pandemics and World Wars have taken millions more lives but the economic ramifications could easily outdo the Great Depression, only time will tell. As we stated earlier the rush to secure wool before the 3 week recess led to a strengthening market. This opening 2 week increase for the season (24 cents) and the 28 cent rise over 2 sales in  late May/early June were the only 2 times the market has put together back to back gains since consecutive weekly increases before Christmas (a 66 cent jump to 1558) and, with the opening sale in January gaining another 51 cents to 1605 (117 cents for the 3 sales), today’s prices are a mile away from those levels pre Covid-19 and it could be a very extended period of time before we get close to them again.  

An email outlining Covid-19 market information is below this market report. This is a very informative document that outlines the damage that has been done to global economies by Covid-19 and needs to be read by woolgrowers.

https://macwool.worldsecuresystems.com/LiteratureRetrieve.aspx?ID=254269

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Aug/Sept 20

1170

Main Buyers (This Week)

1

Techwool

4263

2

Endeavour Wool

3441

3

Lempriere

3369

4

Aust. Merino

2540

5

Fox & Lillie

2266

6

United Wool

2146

Eastern Market Indicators (AUD cents/kg clean)

1134 cents é 18 cents compared with 03/07/2020

Northern Market Indicators (AUD cents/kg clean)

1175 cents é 16 cents compared with 03/07/2020

   AUD/USD Currency Exchange

0.6936 é 0.0016 compared with 03/07/2020



3 July 2020

Friday, July 03, 2020

 WEEKLY MARKET REPORT

Week Ending 3rd July, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S01/20

This Week

M01/20

Last Sale

S52/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1586

1598

1592

-6

2133

-547

18

1408

1409

1401

+7

2107

-699

19

1284

1291

1276

+8

2024

-740

20

1221

1219

1212

+9

2009

-788

21 1200n 1194 1197n +3 2022n (M) -828 (M)
 26 810n 816 810 0 1315n -505

28

-

564

551(M)

+13 (M)

1050 (M)

-486 (M)

30

-

466

466 (M)

0 (M)

835 (M)

-369 (M)

MC

801n

826n

814n

-13

981

-180

OFF TO A STEADY START!

With very little demand to support even a national catalogue of as few as 20,000 bales, most people thought this week’s opening sale of the season with 30,000 bales on offer was going to be a bridge too far for exporters. As we predicted last week, if new business wasn’t forthcoming, the market could’ve dropped below 1100 cents. Luckily this wasn’t to be as fresh enquiry led to spatterings of business being written. Also, with the 3 week winter recess almost upon us it was enough to keep the market’s head above water. Two solid days of selling saw the AWEX EMI add 6 cents to its value to 1116. In US$ terms the move was minimal (a 2 cent lift to 772) as the FRX traded in a range from 68.5 to 69.2 cents. All fleece microns recorded single figure shifts - 6 cents for 17s and finer and 3 to 9 cent increases for all others. Growers were happy to take the money as 98% of fleece was cleared in Sydney. Skirtings had a firm sale as all types were tending in buyers’ favour with < 16.5 micron “B” fault, best style skirtings were 30 cents dearer. Cardings continued to slide as the MCI fell by 13 cents to 801 undoing all the rises from a month ago. Crossbreds added 20 to 30 cents to their previous quotes.

Any rise is a good rise! The final 3 weeks of the season had seen the market lose 73 cents to come close to falling below 1100 cents but this week’s mini recovery might delay this unfortunate milestone mark. As was the case in May, a bit of business can lift or see the market stabilise when volumes are not large enough to fill the demand but, on the other hand, when the market is treading water or no demand is in the market even small national catalogues are too big for the market to handle. According to most exporters, a recovery in demand looks to be a long way off. Some restrictions are being lifted in some European countries, a sign that life may be returning to some form of normality but there are still many countries where the pandemic is in its 2nd wave and restrictions are being re-enforced and the brakes being put on economic recovery. As far as employment returning to pre-Covid-19 levels, it could be 12/18 months before the degree of employment is enough to allow economies to get back to full economic production. How quickly consumers feel they are able to spend their discretionary income on non-essentials will be the driver as to when the demand picks up for woolen products and the farm gate price improves.  We must ram home our advantage of a clean, green, renewable, sustainable and traceable product. If most growers were surveyed now this would be the message they would want to be conveyed to consumers when demand picks up. The 2nd sale of the season will take place next week, then we head into a 3 week winter recess. The largest sale since late March (36,000 bales) will be on offer. Hopefully there is enough enquiry about to keep the market where it is and, with the looming recess, limited opportunity to buy wool for 3 weeks.  

Southern Aurora Fwd Prices            

Micron

Date

Low

21

Aug/Sept 20

1170

Main Buyers (This Week)

1

Techwool

4314

2

Endeavour Wool

3704

3

Tianyu Wool

2301

4

Lempriere

2259

5

Aust. Merino

1809

6

United Wool

1696

Eastern Market Indicators (AUD cents/kg clean)

1116 cents é 6 cents compared with 26/06/2020

Northern Market Indicators (AUD cents/kg clean)

1159 cents ê 1 cent compared with 26/06/2020

   AUD/USD Currency Exchange

0.6920 ê 0.0022 compared with 26/06/2020