WEEKLY MARKET REPORT

Week Ending 14^th September, 2018

AWEX Northern Micron Indices Comparison

MILLION DOLLAR RAM SALE!

Plenty happening in the world of wool this week as the market stagnated, a record breaking ram sale and the annual Nanjing wool conference. The market followed last week’s pattern - a dearer opening session ending with a softer tone on the final day. The AWEX EMI advanced by just 6 cents to 2094 (37% higher than a year ago) helped along by the sub 19 micron indicators gaining 10 to 45 cents as the broader edge, 20 to 24 slipped by 10/20. The FRX remained stable around the 72 cent mark after falling to below 71 cents early in the week, its lowest point for 2 years. This enabled the EMI in $US to also add 6 cents to its value, up to 1503 as just 68 bales of FLC were passed-in in Sydney.

All types of skirtings made subtle gains, 10 to 20 cents depending on the level of VM and style. There was very little change in the carding market, the only movement being fine micron LKS back by 10 to cents. Crossbreds also had a sedate sale to have most types appreciate by 5/10 cents.

On property ram sales started with a bang. The first cab off the rank was long time wool client Kerin Poll from Yeoval with a massive 400 ram catalogue. 80+ registered bidders competed on every ram to achieve a top price of $9,000 to average $3026 with a 100% clearance. The sale grossed $1.21m to set a new national record for a single on-property ram sale and certainly set an incredible tone for the remainder of the ram selling season. Some of their new buyers from Victoria, Tasmania and Southern NSW were composite breeders aiming to join theses new rams to their ewes to put a bit more value into their wool clips. Well done to all at Kerin Poll, a great result. Another Macwool client, the famous Haddon Rig stud at Warren, held their sale on Thursday offering 150 horned and 60 poll rams with the top price going to a poll ram at $14,000. In an ever-increasing trend where studs are breeding both types the average for the polls was higher then their horned counterparts, $2887 to $2148 with a 91% clearance  and overall average of $2357. Again, great results for both studs considering the dire season.

It was a situation of “wait and see” this sale as the Nanjing Wool Conference was held and the outcomes will become more apparent in the next few sales. Hard to gauge from bleary-eyed delegates how the mood in China is as most are still in-bound or recovering from a solid 3 days of business and pleasure!!. What everyone is acutely aware of is the shortfall of wool when compared to last season, a dramatic 48,000 bales (13%) or 1 selling week of wool!!  Also on the radar at the conference is the recently introduced environmental protection legislation in China and the cost for mills to implement these new laws, the biggest drama being the effects on scouring effluent and waste water and sludge disposal as water treatment devices are adding significant costs to the scouring process. The USA and China trade war was also discussed at length, more on this next week. 35,000 bales on offer next week, no real change expected.

                        Ag Concepts Fwd Prices as at 14 September, 2018

Main Buyers (this week)

AUD/USD Currency Exchange

0.7178 é 0.0010 compared with 7/09/2018

WEEKLY MARKET REPORT

Week Ending 7^th September, 2018

AWEX Northern Micron Indices Comparison

HOLDING PATTERN AWAITING NEW DIRECTION

Finally, IWTO is running a promotion on our fibres great properties through an Instagram promotion of your farm videos and photos of sheep and wool.  Please see the attachment with our weekly report and join in to promote our great fibre worldwide. A smaller offering of 35,000 bales will commence Wednesday.

NCWSBA Weekly Newsletter Supplements (Sept 2018) (400 KB)

                                Ag Concepts Fwd Prices as at 7 September, 2018

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 31^st August, 2018

AWEX Northern Micron Indices Comparison

MARKET PLEASES GROWERS AND BUYERS

The wild swings of the past fortnight weren’t evident this series as a much more measured approach to buying was on display. This week saw the opening “designated superfine sale” of the season. The superior style, sub 19 micron selection in Sydney that had attracted wools from WA and VIC was well received by the exporters as both days saw steady rises for the finer, better style types. By week’s end the 18 and finer indicators added 35 to 50 cents, 18.5/19s gained 25 cents and 20s and broader, although in short supply, weren’t neglected to finish in sellers’ favour by up to 10 cents.  As is the case when a larger volume of these superior types hit the market, the Italian buyers come to the fore with premiums on some lots up to 150 cents higher than the indicator, as both days had a total clearance in both rooms of 98.4%. The Northern Regional Indicator added 28 cents to finish at 2145. The EMI added 22 cents to finish the sale at 2090. The fall in the FRX did no harm either falling to 72.65 cents on Thursday night, back by 0.80 of a cent from last Friday.

Skirtings also benefitted from the superior style selection on offer to have increases for both selling days for a combined rise of 50 to 70 cents for < 19 micron and below 5%VM. All other broader and burrier types were quoted as fully firm. Cardings continued on their merry way as double digit gains over the 2 days saw the MCI lift by 34 cents to 1560 cents. LKS and CRT led the charge with advancements of 40 to 50 cents with STN in sellers’ favour. Crossbreds turned last sale’s cheaper trend to the good as the finer end (< 28micron) looked solid with the 28 and coarser types dearer by 20 to 35 cents.

National totals rose to 35,000 bales as Fremantle rejoined the selling roster after a week’s recess but all things didn’t go to plan as the Melbourne sale scheduled for Thursday was postponed till this morning due to the massive fire in a shed next door (an old woolstore) to the Brooklyn wool stores that started yesterday morning but, although contained, could still burn well into next week. Black plumes of smoke from asbestos and wool grease could be seen as far away as Geelong.

A good sale as the excellent selection (in Sydney) and favourable FRX movements helped the market appreciate into positive territory. Another factor could be the release of consumer confidence figures in major wool consuming countries. In the US the figure is just below the peak of April and the highest since 2000. This is the same for the European Union, China and Japan but surprisingly confidence has waned in Sth Korea.

The National Ram Sale was held in Dubbo this week. In what might be (but hopefully not) a disturbing trend just 56% of the rams offered were sold. Honors went to the South Australian stud, Orrie Cowie, with a top price of $22,000 bought by the Brumpton family in QLD. A national catalogue of 38,000 bales is on offer next week - a repeat of this series would be good!!

                        Ag Concepts Fwd Prices as at 31 August, 2018

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 24^th August, 2018

AWEX Northern Micron Indices Comparison

ERRATIC UPS AND DOWNS FRUSTRATE GROWERS

The rapid descent of the market after the vertical rises of the previous sale caught growers and brokers by surprise as no-one was talking of a correction let alone the magnitude of this week’s fall. Quantity was vastly reduced as only the 2 east coast centres were in operation with 29,700 bales on offer and the lift in the FRX wasn’t considered to be a factor in market movements. The Australian Wool Production Forecasting Committee met and has reviewed its forecast for the 2018/2019 season. After considering industry data and seasonal conditions the committee now predicts shorn wool production at 320mkg – a drop of 5.7% since its April forecast. This may force buyers to supply-driven pricing rather than demand-driven expectations. More volatility like the past 2 sales could become commonplace. Some good judges think medium microns, 19s and broader, have conquered their Everest but finer types < 19 micron may still improve; only time will tell. Fremantle rejoins the selling roster next week with just 35,000 bales on offer.

                                    Ag Concepts Fwd Prices as at 24 August, 2018

           Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 17^th August, 2018

AWEX Northern Micron Indices Comparison

WEEKLY MARKET REPORT

Week Ending 10^th August, 2018

AWEX Northern Micron Indices Comparison

MARKET OPENS ON A SOLID FOOTING BUT DROUGHT STILL DOMINATES

A good way to kick off sales after the 3 week break as the bigger quantity was easily absorbed into buyers’ inventory. European buyers and forward sellers lead the way especially on the better style/finer types which forced the Chinese mills to join the fray to meet supply requirements, despite the US$ now appreciating by 10% against the CNY-Chinese yuan. Volume drops back to 37,000 bales next week. Should be solid to dearer.

          Ag Concepts Fwd Prices as at 10 August, 2018

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 13^th July, 2018

AWEX Northern Micron Indices Comparison

MARKET A BIT CHEAPER BUT STILL VERY GOOD

As buyers catch their breath and plan their strategies for Spring they are under no illusions about the drought which is the worst since the early eighties and, in some areas, back to the sixties and the devastating effect on sheep numbers as most growers have cut numbers back to the bare essentials and now the tragic situation of having to offload scanned-in-lamb ewes, surely this rates as a natural disaster and Government intervention at the federal level should happen to save growers’ core breeders. This drought is far from over with the likelihood of easily accessible grain and hay to buy in the spring and summer is ever increasingly further and further away.

Ag Concepts Fwd Prices as at 13 July, 2018

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 6^th July, 2018

AWEX Northern Micron Indices Comparison

SEASON STARTS WITH A DOWNWARD THUD!!

The opening sale of the new season was nothing to crow about as the softer trend to finish the last sale of the ’17 season accelerated to have the AWEX EMI give up 62 cents (3%) to fall below the 2000 cent mark for 5 weeks to 1994. The fall wasn’t as big in US$ terms - 42 cents to 1471 as the A$ remained fairly steady at just below 74 cents. The fall was the largest weekly decline in six years as prices across the entire spectrum fell on both days. By week’s end most microns (17 to 22s) retreated by 45 to 85 cents. Only the very best lots were least affected, down only marginally with the odd lot actually dearer that had the right specs that suited Italian mills. The types that suffered heavier losses contained VM levels above 2%, low nk/t readings and high mid-breaks. Some lots were punished severely, almost neglected, as buyers picked the eyes out of the catalogue with some discounts way above what the losses read on the AWEX report resulting in a 30% pass-in rate in our fleece catalogue - our highest for some years.

Skirtings also took their biggest hit for some time as consistent losses over the 2 selling days had most types pulled back by 50 to 80 cents with > 5%VM affected more than their low VM counterparts with the very odd, better style/low VM type escaping the large losses. Crossbreds had a similar sale to the merino sector, losses ranging from 40 to 65 cents for the 28/30 micron wools with falls for other microns restricted to 20 cents. Cardings were the least affected of any sector as all types and descriptions gave up 10 to 20 cents for the sale.

A tough sale to commence the new selling season as the biggest catalogue since early April had some exporters offside regarding the big increase in quantity. This rise in quantity is a common occurrence as the new financial year ticks over as some growers look to spread their income over the 2 financial years. The increased volume should have been of no surprise to buyers. The rapid rise in the market since Easter (280 cents) may have caught up with the buyers as well. Everyone expected a correction but as to when and how much was the question no-one could answer till now. Another factor was the significant movements of the FRX of the Chinese Renminbi, CNY against the US$ over the past 3 weeks, 7% in favour of the US$ meaning Chinese mills had to find 7% more money to fund their purchases - a bridge too far this week!! Despite the sharp downwards adjustment the market is 470 cents (30%) higher than 12 months ago. Next week is the final sale before the 3 week annual winter recess with 41,000 bales on offer, hopefully the market can hang on??

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 29^th June, 2018

AWEX Northern Micron Indices Comparison

MARKET SURGE SLOWS

Our last sale this week for the 2017/2018 season saw Fremantle return after not offering last week and push the quantity for the three Centres to 31,784 bales, well up on last week’s offering. Early in the week we heard from the exporters that they expected the market to slow and slow it did. The Eastern Market Indicator (EMI) slipped to 2056 cents down 17cents.

The market saw the finer fleece microns hardest hit, retreating 20 to 40 cents, the 19 to 20 micron fleece were off 10 to 20 cents. Interestingly a very small offering of 21 micron fleece wools managed to remain in record territory rising a further 10 cents.

We continue to hear from the show floor that Chinese mills want more supply of 21 to 22 micron long 100mm plus merino wools. Unfortunately with our continuing drought, most clips are finer and many have shorn early reducing the length.

We saw this week that short fleece wools (60mm and less) and poorer, very dusty types were very neglected by the buying trade. The skirting types also felt the slowing with broken and bellies slipping 30 to 50 cents for the week. Oddments also were off 5 to 10 cents and crossbreds down 5 to 20 cents, 30 micron being the most affected.

As the season closes it is interesting to see which exporters buy the most. Our top three exporters this season were:

1. Techwool Trading with 13.6% or 242,410 bales
2. Fox and Lillie with 10.6% or 189,003 bales
3. Kathaytex with 7.9% or 140,721 bales.

So next week we start the 2018/2019 season with Sale 01. Currently there are 43,232 bales rostered for sale. A larger quantity as many growers wait for this sale to sell in the new financial year. Let’s hope that this larger quantity does not slow the market further. Macdonald and Co will offer on Thursday, 5^th July, 961 bales.

All eyes are now on the dollar holding steady at 73 cents and assisting this market to stabilise. Keeping in mind that the falls we are seeing are miniscule when looking at the rises we have had this season. Some rain has been reported to us. Let’s hope we are seeing the end of this dry.

Ag Concepts Fwd Prices as at 29^th June, 2018

Main Buyers (this week)