WEEKLY MARKET REPORT

Week Ending 19^th January, 2018

AWEX Northern Micron Indices Comparison

MARKET FLATLINES!

This week’s wool market couldn’t sustain last sale’s rapid rises as the AWEX EMI eased by 17 cents to 1801 while the Northern Region Indicator also lost ground by 7 cents to 1901. As the FRX pushed higher to nudge 80 cents and the big catalogue of 54,000 bales was on offer, this gave the buyers a chance to be a bit more selective with their purchases. Prior to Christmas (and last week) types with high mid-breaks and other faults had been swept up in the price hike as discounts were minimal. Suddenly the discounts for any type of fault came back into vogue as all microns (bar 17.5 and finer) suffered losses to some degree. Medium microns (19 to 21) lost 20 to 35 cents while 18/18.5 and 22s gave up 10 to 15 cents. As mentioned earlier, finer types bucked the cheaper trend as 16.5/17.5 were 5 to 15 dearer and 17s rose a healthy 35 cents - this resulting in the pass-in rate to rise slightly for fleece types to 1.9%

Skirtings looked to track 2 ways as the < 18 micron types with < 5% VM were in hot demand as buyers pushed these lots up by another 30 to 40 cents while the broader burrier skirtings with heavier colour/cott fell by 10/20 cents. The spectacular run that cardings have had also came to an end bar CRS which remained firm throughout the sale and LMS types that were 20/30 cents higher and some lots extreme. LKS and STN gave up 40 to 60 cents as the 3 MCIs are now 1501 to 1513 but still great levels. Crossbreds also reversed last sale’s dearer trends to fall back by 5 to 15 cents. 

Everyone was wondering when a correction might occur as the market has been on, what some might call, a “bull run” since mid October when the EMI was 1560 lifting to over 1800 while the MCI has tracked upwards to the tune of almost 300 cents (1230 to above 1500). Over this time there has only been 7 selling days of losses. Some buyers were surprised as to the rise and rise of the market given funding difficulties late last year and the volume of wool that had been sold compared to last season (up by 5% - 49,000 bales) but the market has more than absorbed this extra quantity. Reports from China that fresh business had slowed a touch and the FRX that did sneak above 80 cents and the big offering all led to the slight pull-back in prices on Thursday according to the experts. This brief respite from the frantic chase of supply and constant rising prices will be welcome by all mills but may only be a brief interruption to the ruling trend as many wool users look to have their immediate orders and machinery demands covered. As prices continued to rise till now many mills were nervous about passing on the new price levels particularly in the woollen sector. Ultimately retail sales will determine price movements but wool, especially Merino, continues to sell well in shops and online, remembering there is virtually no greasy stock in Australia and very little wool in front of machinery overseas waiting to be processed. We sell next Wednesday with 600 bales on offer.   

Ag Concepts Fwd Prices as at 19 January, 2018

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 12^th January, 2018

AWEX Northern Micron Indices Comparison

RECESS OVER – RECORDS BROKEN!

Wool sales resumed this week after the 3 week Christmas recess with a high degree of uncertainty and anticipation. For several years now Jan/Feb has been quite rewarding for growers selling in this period but, with the A$ appreciating by 2 cents to high 78s and the largest national catalogue since mid January last year, opinion was divided as to how the market would open up. One buyer thought this sale would be either side of where it finished pre Christmas while another thought a rise of 40/50 cents was on the cards before the FRX movements but 10 to 20 cent gains were on the cards. Both wrong!! Melbourne started this series cautiously on Tuesday but as the 3 centres sold on Wednesday the market exploded into action and consolidated these rapid rises on the final day. Gains ranged from 116 cents (16.5s) to 65 cents for 18.5 with 19 to 20 micron averaging a 100 cent climb in Fremantle. The AWEX EMI jumped 58 cents to 1818, a new record with the rise in US$ terms bigger (82 cents to 1431) due to the higher FRX. Just 45 bales of fleece were passed-in in Sydney clearing 99.1% as all microns and types, regardless of faults, benefitted from the mad scramble to secure wool. In Sale 23 we had 1 lot crack the 2000 cent barrier. This sale 5 lots from Coolah made over 2000 cents, the top being 2130 for a 14.9 micron lot at 3128 cents clean. This was the highest clean price in Australia on Thursday.

Skirtings also were swept up in the buying frenzy of Room 1 although not to the extent of fleece types as gains of 70 to 80 cents for < 19 micron and < 8% VM covered most types in that range with burrier lots (up to 15%) 20 cents dearer and heavy (20%) VM types with colour/cott unchanged. That same grower from Coolah averaged over 1700 cents for his “BKN”, 15.8 micron and 4.6% VM. Cardings also rewrote the record books as LKS skyrocketed by 60/80 cents with STN/CRT posting 50 to 60 cents gains with LMS extreme, the 3 MCIs now range from 1544 to 1564. The largest XB catalogue since December, 2015, (32%) fared well as 26 to 30 micron gained 10 to 30 cents while 32s lost 20 cents.

A great start to the year as buyers were desperate to secure volume to keep mills running after 3 weeks of recess. Demand is still outstripping supply as forecasted rosters show national quantities back to the 40K to 45K after next week’s 54,000 bale sale. This reduced quantity to come should be enough to keep buyers under pressure to buy the amount of wool to keep mills turning over. All merino indicators are at 5 year highs and record levels for 19 micron and broader as are skirtings and cardings. Sydney has its 1^st 3 day sale since August with 16,000 bales on offer with Macwool selling first on Wednesday with 1145 bales up for grabs.

Ag Concepts Fwd Prices as at 12 January, 2018

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 15^th December, 2017

AWEX Northern Micron Indices Comparison

GREAT YEAR ENDS ON A MASSIVE HIGH!

We were left wondering how AWEX couldn’t find just one more cent for the EMI to create history and crack the 1700 cent mark last week. Well we didn’t have to wait too long as Melbourne’s market on Tuesday did the trick, up by 14 cents to 1713 in a precursor to the rest of the final sale of the year. The market exploded into action on Wednesday as the EMI added a whopping 52 cents to 1765 - an all time record as 18.5 to 20 micron in Sydney posted gains of 100 to 116 cents. This was to be the peak of the market as Thursday’s prices couldn’t be maintained due to the sudden fall in the US$ and appreciation of all major currencies as the US Federal Bank lifted interest rates for the 3^rd time this year on Wednesday night as buyers used the FRX to their advantage on Thursday to soften the market. As the table above shows, the gains across all microns was significant - 17s now an incredible 1008 cents higher than 12 months ago.

The buying frenzy wasn’t only restricted to the fleece room as price gains ranged from 60 to 90 cents for all types of skirtings regardless of micron, style or VM.  A Line of PCS from Cunnamulla - 18.8mic, 6% VM - made 1087 cents as just 19 bales (1%) failed to sell. The records continue to tumble for the carding sector as the 3 centres averaged a 47 cent jump to sit at 1470 to 1498. Melbourne and Fremantle did break through the 1500 cent mark on Wednesday but came off the boil in the final session. It was almost a total clearance for oddments, 8 bales passed-in clearing 99.5% of this sector, 353 cents to the good compared to this time last year. Crossbreds also added to their previous values, finer microns (25/26s) up by 40 to 50 cents while 28 to 30 micron gained 15 to 20 cents as broader types were in buyers’ favour.

A great sale for the lucky growers who sold wool as the bidding was “frenzied” from the outset for all types as the impending 3 week recess and intense demand forced some to buy “regardless of price”.  All MPGs for 16.5 to 22 micron were at record levels on Wednesday since AWEX began in 1995. For the calendar year the EMI has climbed a whopping 405 cents (30%) the biggest yearly rise since 2002, the 3^rd year-on-year rise totaling 700 cents. The value of wool sold (Jan to Dec) topped the $3 billion mark for the 1^st time since AWEX records began 22 years ago. We now enter a 3 week recess with wool sales to recommence on 9^th January.

Ag Concepts Fwd Prices at 15 December 2017

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 8^th December, 2017

AWEX Northern Micron Indices Comparison

THE EMI TEETERS ON THE EDGE OF 1700 CENTS!

After a steady start to the week the wool market fired up again late Wednesday and Thursday to surge towards an EMI of 1700 cents rising 23 cents for the week. It pulled up one cent short at 1699.

The big improvers for the week were the crossbred types which saw buyers panicking to fill orders as the Christmas recess looms and available days for shipment diminish. All types were hotly contested as buyers (operating principally for China) scrambled to buy anything that resembled wool! Sale of the day for us was a line of bellies containing over 30% burr selling for 1340 cents clean (469 cents greasy) whilst there was disappointment for the writer as his crutchings couldn’t quite manage 1000 cents greasy! The overall picture was aided by a dollar that was slightly cheaper in $US terms, hence also in Chinese Renminbi as well. This softened the blow with the rise in US dollar conversion only being 11 cents overall. Total wool sales this week grossed just over $90 million for an across the board average of $1895 per bale.

For the first four months of the season the volume of wool exports was up by 10% against last year to 106.7 mkg which was the largest volume exported in 8 years. The value of those exports totaled $1107 million - an increase of 26% over last season and the highest value for the period since 2002/03 when there was almost 50% more wool. For the same period other fibre prices have also lifted globally, particularly in China. Polyester in China has risen by 12% in the past four months and acrylic has risen by 20%. In US$ terms the EMI has risen 5% for the same period so it seems that there is no reason to be nervous about wool outpricing itself although the price relativity for superfine against synthetics is quite high.

Other data also just released was the latest breakup of National Wool Declaration (NWD) information to the end of November. Of all wool offered 65% carried the NWD with non-mulesed at 10.4%, pain relief 31.9% and ceased mulesed 2.8%. Year on year non-mulesed wool increased by 3% and PR increased by 8%.  It would be good to see a higher declaration rate than 65% but it has increased about 15% over the past two seasons so now could be considered as critical mass.

The big question for the short term is, “Will this strength continue to the final whistle next Thursday?”. There is a large offering of 52,000 bales up next week and buyers wishing to ship prior to Christmas will have to have quick payment and quick delivery through dumps to port to achieve it otherwise it will be early January before things get moving again. Macwool will be selling on the first day in Sydney next Wednesday with reasonable expectations of a good sale.

Ag Concepts Fwd Prices at 8 December 2017

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 1^st December, 2017

AWEX Northern Micron Indices Comparison

MARKET SET FOR A GOOD RUN HOME TO CHRISTMAS!

The market clawed back some of the previous series’ losses as buyers looked to have overcome their finance problems that restricted some of them operating to full capacity over the past fortnight. The benchmark AWEX EMI added 7 cents to its value (1676), 298 cents higher than the same time 12 months ago, an increase of 21%. The gain in US$ terms was the barest minimum, just 1 cent to 1271, as the A$ spent most of the sale just shy of the 76 cent mark. Some degree of urgency came back into the sale rooms this week as buying patterns intensified under renewed interest but bidding was measured as price increases were gradual. This was the final “designated superfine sale” of the year, but this didn’t benefit all microns. 17 to 18s failed to fire to slip by up to 5 cents (volume related) as 16.5 jumped by 35 cents. All other microns from 18.5 to 22 put on an average of 15 cents. Most types met with good competition regardless of VM, colour or other faults as the “right spec” lots were up to 30 cents higher than their indicators.

The skirting buyers also took a much more cautious approach but overall the market remained pretty much unchanged, bar some 17 micron and broader types just in buyers’ favour. The carding market also followed suit as the only movements in this sector were LKS < 17 micron that added 10 cents and washing LMS (< 0.3 VM) quoted as extreme. Once again XBs failed to fire or even hold the previous sales’ levels as all microns (25 to 32s) gave up another 10 to 25 cents.

Most of the show-floor talk still revolved around finances. The recent larger weekly offerings and higher prices had most buyers stretched to the limit but the pressure valve should be alleviated as we march towards the 3 week recess as November shipments are due and L/Cs (letters of credit) are opened allowing buyers to regain full budget limits for purchasing for the final 2 sales of the year. Demand for prompt shipment and the need of most mills to buy wool pre-Christmas to keep production going over the recess and into the new year should ensure, at the very least, a solid market. Competition was more evenly spread this sale as the top 3/4 buyers slowed their purchasing patterns allowing other buyers  to fill the void.

The latest testing figures from AWTA shows November was down 2.3% compared to the same month last year but July to November this year had 5% more bales tested than last season. We sell late on Thursday with 700 bales on offer; this could be the high point of the sale!! Hope everyone gets the much anticipated rain.

Ag Concepts Fwd Prices at 1 December 2017

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 24^th November, 2017

AWEX Northern Micron Indices Comparison

 A BIG THANK YOU

The dust has settled after last Friday’s AWI AGM and I would like to thank all the wool growers who voted and offered support over the past two months. There was a clear message given by literally thousands of growers and I will be determined over the next four years to repay their trust and ensure AWI continues its good work in the areas it is actively involved in and assist where I can to repair some of the rifts which have appeared over the last couple of years. The most recent election was not without its share of controversy and AWI have promised an investigation as to where some things went wrong, particularly growers who didn’t receive voting papers in time to vote. If you were one of them, please let us know so we can pass it on.

The softer markets on the east coast last Thursday had most pundits wondering if the market had finally peaked. After spending 3 sales in September at around the 1520 cent level the AWEX EMI has shot up to a record high last week of 1689, an increase of 178 cents over a 9 week stint that saw the EMI only record one negative day. It was a nervous start to this sale as Melbourne and Fremantle posted modest gains with Sydney a shade cheaper weighed down by broader microns a touch off and XBs cheaper as was the case in Melbourne, falling considerably. Thursday had the losses extend across all sectors as access to finance became harder and buyers were more and more selective with their purchases. By week’s end all merino fleece microns had lost 20 to 40 cents bar 21s back by 10 cents. As the buyers were looking for lots with the “right specs” these came under pressure and were quoted 30 to 60 cents higher than their indicators, about the only good news in a dull week.

The skirting catalogue escaped the price hiccup of their fleece counterparts virtually unscathed. Most of the selection was < 19 micron and below 4% VM and remained pretty much unchanged for the series with the odd lot in the 17/18 micron range losing support towards the end of the sale. The record breaking carding sector also took a breather from its meteoric rises. Apart from some LKS/CRS in the 18/19 micron range slipping by 10 cents all other types remained rock solid. History was made when we sold a line of LKS from Cargo, near Orange for 1009 cents!! The finer LKS under 19 micron with < 3% VM are now making over 1500 cents clean - just 150 cents from the 21 micron fleece indicator. A lot of CRS from Cooma made 1044 cents (1675 clean) - amazing prices for cardings. When the market started its climb 9 weeks ago 21s were at 1532 and the 19.5 indicator was on 1687. Crossbreds continue to frustrate growers. Just when it looked like a recovery was on the way as most microns (26 to 32) added 80 to 100 cents over a 2 week period in early November, it’s been downhill ever since. The sales losses ranged from 10 to 40 cents on top of last week’s fall but we are still 20 to 50 cents ahead of the levels before the big rises early in November. 

Concepts Fwd Prices at 24 November 2017

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 17^th November, 2017

AWEX Northern Micron Indices Comparison

 DON’S IN, MARKET STEADY!

The market took a breather this sale as it looked pretty hard to figure out which way buyers were pushing the market. By week’s end the market had edged a touch higher by 2 cents to 1683. The weaker FRX didn’t seem to help the market but the weaker A$ resulted in the market falling by 13 cents in $US terms to 1279 as the $A moved lower by over 1 cent. The market opened on a slightly dearer note but tailed off somewhat by Thursday to have all merino indicators edging just into positive territory. Some microns did add 15 to 25 cents -16.5s, 17.5 to 18.5 and 19 - while all others progressed by up to 10 cents. The less stylish selection than what had been offered over the past few sales being a factor in price movements. Even with the steadier market growers were happy to take the money as the clearance rate was 99% for the fleece offering in Sydney.

Skirtings also had an up and down sale as a strong opening led to a softer finish to the week. Finer types < 19 micron, below 5% VM ended the sale with their noses in front (up by about 10 cents) while the broader/burrier types held their levels from the past few sales. Growers are still very happy with these incredible levels for skirtings as only 18 bales were passed-in, 99.1% sold. Cardings continued to re-write the record books as the 3 MCIs all rose. Sydney (1382) and Fremantle (1366) added 35 to 45 cents (all types in this sector posted 30 to 50 cents rises) while Melbourne rose by 12 cents to 1389. We had a line of LKS from Condobolin make 822 cents!! If we see even small increases next week the MCIs on the east coast could crack an amazing 1400 cent barrier. It was only 2 years ago that 21s were just 1200 cents while 18 micron and finer ranged from 1400 to just 1460 for 16.5s!! Just when we thought crossbreds were well and truly on the way to recovery, they couldn’t maintain their meteoric rises of the past 2 sales as losses ranged from 10 cents (32 micron) to 50 cents for 28s, these big falls contributing to the small movements in regional indicators. 

A week of consolidation as movements in all microns of merino fleece/skirtings were minimal as cardings kept rocketing away and Crossbreds lost ground. With just over 50,000 bales on offer this sale was the largest since the opening sale after the winter recess (August) with Melbourne selling 56% of the total, its biggest catalogue since January. The turnover this sale topped $96.77m - the highest weekly total since 2002 when 74,500 bales were offered. The easing of the market on the east coast on the final day of selling could be a sign that the peak has been reached (time will tell) but an encouraging factor was the Fremantle market finishing slightly dearer which can be a good pointer for things to come next sale under another big selection of 44,000 bales - we wait with baited breath for the outcome.

Good news to come out of the much anticipated AWI AGM held in Sydney today. Don has succeeded in his bid to be voted onto the board of directors after a month of lobbying eligible voters. His vote count (136,384) was only 2^nd to one on the board’s incumbents, Collette Garnsey with a total of 205, 584. The final position that was up for re-election was won by James Morgan with 135,892 with Paul Cocking missing out with 128,608 votes. The new board met immediately after counting and voted Wally Merriman to retain his role as chairman.    

 Concepts Fwd Prices at 17 November 2017

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 10^th November, 2017

AWEX Northern Micron Indices Comparison

WHERE TO NOW?

The market continued on in the same vein this sale to smash last week’s record level the AWEX EMI up by a whopping 58 cents to 1681 - a rise of 103 cents in the past fortnight- as the FRX looked to be locked in the 76.5 to 77 cent range. This steady rate playing into buyers’ hands as the rise in $US terms was 40 cents to 1293. Increases were across the board, 30 to 50 cents with some of the superior super-fine types up to 150 cents higher. Just 13 bales of fleece were passed-in in Sydney clearing 99.8% (6632) bales as all micron ranges from 16 to 22 are at 5 year highs.

Skirtings kept up with the rises in the fleece room as the burrier/broader types (> 19 micron, > 5%VM) took the limelight with gains of 40 to 60 cents while the finer, lower VM lots could only muster 20 cent increases. It seems that the sky’s the limit for the carding sector as the 3 centres averaged 63 cent gains as the MCI’s range from 1323 to 1377 - all types posted 50 to 60 cent jumps with some LMS up to 100 cents dearer as just 7 bales failed to find a new home selling 99.4%. The MCI has jumped 259 cents (1089 to 1348) since early September. At long last the XB sector was the standout performer giving long suffering growers some much needed good news. Finer microns < 26 were 50 cents higher while > 28s posted 80/90 cent gains 20% for some microns).    

A remarkable market as buyers scrambled to secure volume. The 42,745 bales sold across the country this week grossed $84m or $1965/bale, quite incredible with 98.7% sold. As the market rose rapidly some buyers “slammed the bag” and adapted a wait and see approach and left it up to the “gang of four” to set these new levels buying 60% of the fleece selection and 70% of XBs. Techwool, our largest buyer, topped the list for FLC, SKTs and XBs only to be outdone by Michell in carding sector.

Not only are we asking where will the market pull up, but who will make up the new Board of AWI after next Friday’s AGM.

Don has received much support from within our client base and is very grateful for the confidence shown. Voting closes next Wednesday, so mailed votes really needed to be in the post today. Online voting will close 5pm Wednesday. You have to appoint a proxy holder otherwise your vote will be invalid. All results will be in next week’s report.

Macwool will offer 606 bales next Wednesday.

Ag Concepts Fwd Prices at 10 November 2017

Main Buyers (this week)

WEEKLY MARKET REPORT

Week Ending 3^rd November, 2017

AWEX Northern Micron Indices Comparison

AWI VOTING OPEN, RECORDS BROKEN – EVEN XBs DEARER!!

The market marched on this week as several records were broken. The AWEX EMI jumped by 45 cents to 1623 - 25% above the level the same sale 12 months ago. This now an all time high beating the August peak of 1614c and the old AWC indicator in April 1988 of 1584 cents. The rise was 35 cents in US$ terms to 1252 as the FRX floated between 77.2 and 76.5 cents. The rises were across all microns and types (30 to 75 cent gains with some superior types over 130 cents better) as buyers warmed up for next week’s designated super-fine sale. The 19.5 MPG is at an all time high (1850) since its introduction to market reports in 2001 as 20 to 23s close in on record levels.

Skirtings sold to excellent competitive tension as 19 micron and finer < 3% VM shot up by 80/100 cents while broader, burrier types with 5 to 10% VM looked 50 cents dearer as just 15 bales were passed-in. Cardings created new records as the 3 centres added significant gains to their MCIs. All types in this sector jumped by 40 to 100 cents to have the MCI at 1289 in Sydney as every bale on offer was snapped up. Crossbreds were also caught up in the buying frenzy to snap an 11 week falling run as rises were 20 to 35 cents for 25 to 30 microns - a very welcome rise. The total bales sold this sale nationally were 45,193 that grossed $87.18m which equates to $1929/bale. It was way back in 1996 that a single week’s sold wool came to a similar value but the total bales sold were 140,000 - $622/bale!! This works out to a 310% rise in the market.

Still plenty of news around regarding AWI and the impending elections for positions on the board on November 17^th. Growers who are eligible to vote should have received their “how to vote” papers. There has been plenty of argy-bargy amongst certain individuals in the rural press and this could be the most important elections in AWI’s history. In the last election in 2013 just 18.6% (204,488) of the 1.1m eligible votes were cast and a total of 98.8% (202,211) were proxy votes, ie left to the chairman as to whom the vote was to be directed. It is imperative that every grower cast their own vote and not have someone else decide who sits on the board. We all know this situation would never happen in any level of politics so why would we tolerate it at AWI!!

Ag Concepts Fwd Prices at 3 November 2017

Main Buyers (this week)