Weekly Market Reports


25 September 2020

Friday, September 25, 2020

WEEKLY MARKET REPORT

Week Ending 25th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S13/20

This Week

M13/20

Last Sale

S12/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1611

1641n 1474 +137 2003  -392

18

1407

1398

1279

+128

1965

-558

19

1208

1231

1096

+112

1871

-663

20

1104

1104

994

+110

1843

-739
21 1075n 1073 956n +119 1828n -753 
 26 668n 670n 623n +45 1240n -572

28

489n

483

466n

+23

988n

-499

MC

723n

703n

673n

+50

993n

-270

A THREEPEAT - IS THERE MORE IN STORE??

The talk of the anticipated rising market late last week came to fruition but much more than anyone was prepared to call. A frantic opening session was followed by a more measured approach on the final day but still the market did what growers had been yearning for, a big lift in prices. The AWEX EMI climbed by a massive 99 cents to 1036 to add up to a 178 cent lift (21%) over the past 3 weeks. The gain in US$ terms was 53 cents to 739 as the falling FRX to 71.35 certainly helped. This series’ opening day’s rise of 59 cents (6.3%) was the largest daily gain in 12 months and the largest weekly lift over the same period. This recovery goes part of the way to cancelling out the 27% (276 cents) fall the market suffered through August and early September. Merino fleeces all rose by triple figures, 100 to 140 cents with no type neglected. Skirtings also rocketed back to reasonable levels with < 18 micron adding 120/180 cents and broader lots 80 to 100 cents to the good. Cardings continued to claw back their lost money as the 3 centres’ MCIs averaged 60 cent increases. All descriptions added 50 to 130 cents depending on style, micron and VM.

The new business that was written 3 weeks ago has kept coming to most people’s surprise. One buyer we spoke to said the enquiry on Tuesday night was the highest level for 18 months thus giving exporters a new aura of confidence to do more business. Local traders led the recovery with Chinese indent orders and overseas top-makers sniffing around the edges. In other good news European and Indian orders were in the market with Italian mills picking the eyes out of this week’s designated Superfine sale selection (albeit at small volumes) but the more enquiry coming normally converts to fresh business being written and increased competition. The same buyer seems to think that these levels could be the base from which the market can go forward providing growers don’t flood the market with wool held in store that has been waiting for price increases that we have seen over the past 3 sales.

Ram sales continue with great results. This week’s sales have gone like this: Bella Lana at Wellington cleared all 125 rams for a top of $10,000 to average $2,490; Gullendah at Yeoval offered a mix of Dohne and Polls (140) to sell all but 1 poll ram. The Dohne’s averaged $3,115 to top at $5,000 twice and the Polls averaged $2,100 with 2 rams selling for $4,000. Tara Park at Boorowa achieved a top price of $10,500 to average $2,520 selling all but 2 rams. Trynow at Goolma had a top price of $1,600 5 times for an average of $1,070 to clear 86%; Poll Boonoke and Wanganella at Conargo sold all 200 rams to average $3,470 with a top of $13,000; also in the Riverina at Pooginook, Jerilderie, the mix of Polls and horned rams had a 98% clearance with a top of $7,000 for a poll ram with the top merino making $4,000 with an overall average of $2,625; Lachlan Merinos at Forbes sold all their 140 rams with a top price of $11,500 to average $4,075; a $10,500 top price was achieved by Coddington Uardry Poll at Dunedoo with a total clearance to average $1,740; and Calga Dohne stud at Coonamble sold all 73 rams for a $4,000 top price twice and an average of $2,375. Next week’s catalogue has grown to 33,200 bales. Will the market hold at these levels??

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

960

Main Buyers (This Week)

1

Techwool

3656

2

Endeavour Wool

3286

3

Fox & Lillie

2420

4

Aust. Merino

2074

5

Lempriere

2039

6

Modiano

1768

Eastern Market Indicators (AUD cents/kg clean)

1036 cents é 99 cents compared with 18/09/2020

Northern Market Indicators (AUD cents/kg clean)

1086 cents é 93 cents compared with 18/09/2020

   AUD/USD Currency Exchange

0.7133 ê 0.0185 compared with 18/09/2020

18 September 2020

Friday, September 18, 2020

WEEKLY MARKET REPORT

Week Ending 18th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S12/20

This Week

M12/20

Last Sale

S11/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1474

1456n 1420n +54 1967 -493

18

1279

1283

1207

+72

1902

-623

19

1096

1085

1045

+51

1775

-679

20

994

980

949

+45

1743

-749

21 956n 949 926n +30 1735 (M) -786 (M)
 26 623n 626n 591n +32 1195n -572

28

466n

466

441n

+25

953n

-487

30

-

374n

365 (M)

+9 (M)

791n (M)

-417 (M)

MC

673n

639n

638n

+35

934n

-261

TWO WEEKS RUNNING. WILL IT BE THREE?

The increased volume for this series looked to be problematical for exporters when valuing for this week’s sale as all the talk was for a cheaper market that was most likely going to erase last week’s gains. By the commencement of sales, sentiment had changed for the good with solid increases as the week progressed. The AWEX EMI added 47 cents (5.3%) to 937 with a similar gain in US$ terms - 43 cents (6.5%) to 686 cents. The extra 1% gain in US terms came about from the upward shift in the FRX. Normally this would be a hinderance to the market’s direction but helped the market this week as the FRX strengthened over the course of the sale to 73.20 cents, up by 1 cent. Merino fleece prices rose across the board from 30 cents for 21s to 70 cents for 18 micron. The highlights were in Melbourne and Fremantle where 17.5 and 18.5s rose by 100 to 115 cents something we haven’t seen for some time. Skirtings were also caught up in the increased demand as < 18.5 micron jumped by 50/80 cents with the broader selection gaining 30 to 50 cents. Cardings continued to make upward adjustments with the 3 MCIs averaging 30 cent rises as all types in this sector made gains from 30 to 100 cents. Crossbreds weren’t left behind as they continued their rise from the ashes with most microns lifting by 20 to 70 cents.

Chinese buyers led the charge with some European orders from forward sellers and indent top-makers. Fresh business coming from an increase of enquiry that has converted into firm orders is something that has been lacking in the market since sales resumed in August when speculative stock buying was non-existent and the odd new order was filled easily as no big volume of new business was written. Is there a change in the wind?? Two weeks of rises doesn’t lend itself to a full-blown recovery but any rise in any commodity is always welcome. Of course, the elephant in the room is the 2nd wave of Covid-19 that is rampant in some countries and lockdowns and restrictions are being re-introduced hindering economic growth. The widespread release of a vaccine in the Northern Hemisphere (our critical markets) will go a long way to getting people back to work quickly and consumers spending money again without fear of not being treated if they catch the virus.

Ram sales continued this week with some outstanding results for both Merino and XB studs. Some results include: Gullengamble at Yeoval clearing 91% for a top of $6,500 3 times to average $2,590; Yarrawonga at Harden sold 97% to average $2,975 with a top of $16,000; Gilgandra’s Weealla stud sold 97% of their draft for a top of $4,000 to average $1,660 ($260 higher than last year). Another local stud, Roseville Park, cleared all 210 rams to average $2995 with a top of $26,000 these 3 studs offering a mixture of Poll and Horned rams. Merryville stud at Boorowa sold 101 rams with a top price of $6,000 to average $1750 and the MPM Stud (Multi Purpose Merino) at Girilambone cleared all of their draft for a top price of $3,200 to average $1,540. Next week’s national catalogue is 25,000 bales with a designated super-fine sale in Sydney. Showfloor talk has the market dearer again.

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

960

Main Buyers (This Week)

1

Techwool

3338

2

Endeavour Wool

3253

3

Lempriere

3195

4

Fox & Lillie

2313

5

PJ Morris

2073

6

Aust. Merino

1669

Eastern Market Indicators (AUD cents/kg clean)

937 cents é 47 cents compared with 11/09/2020

Northern Market Indicators (AUD cents/kg clean)

993 cents é 38 cents compared with 11/09/2020

   AUD/USD Currency Exchange

0.7318 é 0.0098 compared with 11/09/2020

11 September, 2020

Friday, September 11, 2020

 WEEKLY MARKET REPORT

Week Ending 11th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S11/20

This Week

M11/20

Last Sale

S10/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1420n

1369 1382 +38 1930 -510

18

1207

1193

1172

+35

1853

-646

19

1045

1024

995

+50

1755

-710

20

949

919

910

+39

1682

-733

21 926n 904 898n +28 1645n -719
 26 591n 571 526n +65 1165n -574

28

441n

438

396n

+45

953n

-512

30

-

365

319 (M)

+46 (M)

818n (M)

-453 (M)

MC

638n

609n

637n

+1

906n

-268

A SLIGHT RISE BUT ….

Talk of a reversal of the downward trend of prices rang true early in the series but the newfound optimism and hope that the market may have finally turned the corner went as quickly as it arrived as prices faded late in the sale. The falls weren’t as large as the rises so the AWEX EMI posted its 1st weekly gain since early July (following 5 weeks of falls totaling 276 cents) a rise of 32 cents to 890. The fall in the FRX to 72.2 cents had the EMI add just 12 cents to 643 in US$ terms. All fleece microns finished the sale 30 to 55 cents higher; the opening session’s rises saw 99% sold. Skirtings also saw a sharp increase in demand with all descriptions jumping by 30 to 50 cents as again growers were happy with the price hike to clear 98%. Cardings also rose but not to the extent of their combing counterparts as < 18.5 micron for all types added 20 to 30 cents to their previous values. Crossbreds also lifted themselves off the canvas to add 60/80 cents for 26s and finer while broader types were 30 to 50 cents dearer.

The sudden surge of enquiry late last week came almost exclusively from Chinese manufacturers converting virtually no demand into a dearer market that required prompt delivery which meant contracts had to be met quickly. This new business was the first real action to arise since the season opened in July. Exporters facing harder and leaner times need to cover risk quickly to maintain the funding of overheads with diminishing opportunities of trade while attempting profitable conclusions to those limited orders that are available at the moment. The new enquiry coincided with the smallest national catalogue since mid June and a favourable swing of almost 2% in the FRX the short lived price rise saw the national pass-in rate drop to just 6%, the highest clearance rate since July.

The Australian Bureau of Statistics has released data on wool exports for July which don’t paint a pretty picture. The total volume of wool exported was 8% less and the value was a massive 37% down when compared to July, 2019. Exports to China and Thailand were actually up by 8% and 13% when compared to July last year but exports to Europe fell by 59% and an incredible 79% in value while the volume to India saw a 37% decline in volume with the East Asia trio of Japan, Korea and Taiwan having a reduction of 45% from the previous July. All major wool processing countries saw declines also except Germany - their exports rose by 27% year-on-year for July. Other destinations saw declines: Italy back by 14%; Czech Republic down by 38%; and India 12% less. These figures are a stark indication of the falling wool market due to weak consumer demand.

Ram sales commenced this week with good results recorded so far. Kerin Poll at Yeoval offered 500 rams with a total clearance to top at $10,000 to average $3,100, up by $590 on last year. Hadden Rig at Warren also conducted their sale this week offering 230 rams - a mixture of poll and horned rams for another high clearance rate. Their top price of $12,000 was achieved twice - one poll and one horned with the poll rams averaging $3,210 and the horned selection averaging $2,525. An increase in volume to 33,000 bales next week will test the market. 

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

870

Main Buyers (This Week)

1

Endeavour Wool

2423

2

Lempriere

2268

3

Techwool

2013

4

United Wool

1751

5

Aust. Merino

1366

6

Fox & Lillie

1347

Eastern Market Indicators (AUD cents/kg clean)

890 cents é 32 cents compared with 04/09/2020

Northern Market Indicators (AUD cents/kg clean)

955 cents é 36 cents compared with 04/09/2020

   AUD/USD Currency Exchange

0.7220 ê 0.0135 compared with 04/09/2020

4 September 2020

Friday, September 04, 2020

 WEEKLY MARKET REPORT

Week Ending 4th September, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S10/20

This Week

M10/20

Last Sale

S09/20

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1382

1340 1448n -66 1842 -460

18

1172

1153

1249

-77

1783

-611

19

995

998

1085

-90

1578

-583

20

910

900

991

-81

1497

-487

21 898n 869 976n -78 1487n -589
 26 526n 546n 645n -119 1100n -574

28

396n

408

436 (M)

-28 (M)

849 (M)

-401 (M)

30

-

319n

368 (M)

-49 (M)

703 (M)

-384 (M)

MC

637n

581n

663n

-26

814n

-177

MARKET DIRECTION – ANYONE’S GUESS BUT WHO KNOWS??

The wool market continued on its sorry path downwards this week as little to no new business was written and, as we forecast, the EMI fell below 900 cents. The ascendency of the FRX by over 2.3% to 74 cents certainly didn’t help but the main factor was, again, the genuine lack of demand. Both days saw double digit falls for all types in all sectors. The EMI dropped by a further 71 cents to 858 and, with the stronger FRX, the fall was 37 cents in US$ terms to 631. Merino fleeces lost 65 to 90 cents across most lots with the Best style FNF, sound types up to 30/50 cents lower. Skirtings also took a hammering as losses ranged from 30 to 80 cents. Despite these heavy falls growers were willing to meet the market as just 7% was passed-in. After last sale’s unexpected rises cardings followed the combing types lead to cheapen as well with broader than 17.5 micron STN and CRT 20 to 30 cents back with all other descriptions either side of unchanged. The sorry state of the XB market continued with heavy losses for the finer microns; 26s collapsed by 120 cents in Sydney and 155 cents in Melbourne with all other microns falling by 30 to 50 cents. At just 190 cents (clean) 32 micron are at their lowest point since AWEX records began in 1995. AT these levels most XB fleeces (26 to 32 micron) are only bringing mid 300 cents to low 100s based on a yield of 70%, barely enough to cover shearing expenses.

Local traders dominated buyers’ lists this series with Chinese topmakers and Indent buyers adding some muted competition on the final day. Reports that European wool merchants are nearly all back from holidays and may lift the abysmal levels of enquiry over the next few weeks will be cautiously welcomed but growers shouldn’t be holding their breath. As usual, AWTA released their monthly testing figures this week. A massive 20% less wool was tested in August compared to the same month in 2019 and the progressive total for the season so far is 17% less than last season - 31.4mkg to 38.2mkg. In a surprise figure 11,680 bales (or 6.4%) more have been sold to the trade to date this season than last, this despite the market being a whopping 37% cheaper than 12 months ago and 750 cents (50% cheaper than the opening sale in January). Reasons could be varied for the extra sell-off from paying off feed or farming bills to just quitting their wool before the market gets any worse.

Increased demand will be the only thing that will pull the market out of this rut. A huge concern is the “2nd wave” of Covid-19 that some countries are experiencing and indeed some countries not getting on top of their 1st wave. If lockdowns and restrictions are enforced again or extended economic recovery will be even further stalled than is anticipated costing governments $billions extra in stimulus and welfare packages for their populations. More and more protests globally against these harsh restrictions may well lead to governments realising that, for the sake of the sanity of their people and their own political existence, a quicker return to normal life will speed up economic growth and may need the pandemic to run its course till a vaccine is released - the course of action they need to adopt??

        Southern Aurora Fwd Prices            

Micron

Date

Low

21

Nov/Dec 20

870

Main Buyers (This Week)

1

Techwool

3297

2

United Wool

2134

3

Tianyu Wool

2047

4

Endeavour Wool

2005

5

Fox & Lillie

1273

6

Seatech Ind.

1122

Eastern Market Indicators (AUD cents/kg clean)

858 cents ê 71 cents compared with 28/08/2020

Northern Market Indicators (AUD cents/kg clean)

919 cents ê 63 cents compared with 28/08/2020

   AUD/USD Currency Exchange

0.7355 é 0.0162 compared with 28/08/2020