Weekly Market Reports


8 May 2020

Friday, May 08, 2020

 WEEKLY MARKET REPORT 

Week Ending 8th May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S45/19

This Week

M45/19

Last Sale

S44/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1657

1631

1697

-40

2480

-823

18

1488

1469

1518

-30

2413

-925

19

1353

1353

1414

-61

2288

-935

20

1303

1299

1362n

-59

2273n

-970

21 1278n 1286 1362 -84 2259n -981
26 790n 846n 835n -45 1523 (M) -677 (M)

28

611n

596

661n

-50

1323 (M)

-727 (M)

30

-

476

478 (M)

-2 (M)

1005n (M)

-529 (M)

MC

796n

812n

840n

-44

1093

-297

IS THE LOW POINT IN SIGHT?

Another poor week for the wool market as the pattern was similar to previous sales with demand almost non-existent as the market recorded more heavy losses across the board. It wasn’t that long ago that buyers were talking of weekly volumes of 35,000 bales being sustainable in the current environment. The absolute lack of demand has meant that, over the past 5 sales, the national catalogue has only averaged 24,000 bales but this has been unsustainable as the market has lost 117 cents, most of that (102 cents) over the last 2 sales. With passed-in lots and growers withdrawing wool the amount of wool cleared to the trade has only been about 20,000 bales/week. The AWEX EMI slumped by another 55 cents to 1170 this week - its lowest point since 2015. The fall in US$ terms was similar - a 48 cent decline to 753, a 10 year low, this despite the FRX falling by a cent to 64.35. Merino fleece types gave up 20 to 65 cents while skirtings fell by 30 to 50 cents across the entire range. Cardings fell by another 20 to 70 cents as the MCI descended by an additional 44 cents to 796 and crossbreds gave up 40 to 50 cents. Surprisingly the passed-in rate fell to 18% down from 25% last sale as more growers seem prepared to meet the market rather than risk a lower price later on.

How low can the market go?? No-one truly knows the answer and opinions are divided. Are we at the bottom? If not, at what level is the low point? And how long will the recovery take for the market to get back to an acceptable level where all participants along the pipeline can make money. Two major buyers we spoke to had varied opinions, from the market perhaps bottoming out sooner rather than later to the market progressively getting cheaper well into our winter months. One buyer thought the only way to help global economies kick start were stimulus packages but this would place all countries in more financial stress - a risk some will not take. The level of consumer confidence in  all major wool consuming countries (US, Europe, Japan and South Korea) has literally fallen off a cliff in April due to the social lockdowns and restrictions that have lead to a collapse in discretionary consumer spending. Only China’s figures showed a very small decline in February before a slight improvement in March, unbelievable!! The world is in a recession and, as to when industry and economies can be running to full capacity and unemployment rates fall as lockdown restrictions ease, then will we see consumers willing to spend their hard earned money again and economic growth rebound to levels we saw pre Covid-19. The wool market absolutely depends on consumer’s ability to spend their excess cash on our product.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

July 20

1250

Main Buyers (This Week)

1

Techwool

2784

2

Tianyu Wool

2020

3

United Wool

1816

4

Endeavour Wool

1626

5

PJ Morris

1576

6

Fox & Lillie

1519

Eastern Market Indicators (AUD cents/kg clean)

1170 cents ê 55 cents compared with 01/05/2020

Northern Market Indicators (AUD cents/kg clean)

1214 cents ê 45 cents compared with 01/05/2020

AUD/USD Currency Exchange

0.6432 ê 0.0102 compared with 01/05/2020

1 May 2020

Friday, May 01, 2020

 WEEKLY MARKET REPORT 

Week Ending 1st May, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S44/19

This Week

M44/19

Last Sale

S43/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1697

1695

1749n

-52

2493

-796

18

1518

1519

1593

-75

2425

-907

19

1414

1437

1483

-69

2304

-890

20

1362n

1382

1443

-81

2278

-916

21 - 1370 1459n (M) -89 (M) 2260 (M) -890 (M)
26 835n 861n 865 (M) -4 (M) 1515n -680

28

661n

668

674n

-13

1303n

-642

30

-

478n

484 (M)

-6 (M)

1005n (M)

-527 (M)

MC

840n

843n

865n

-25

1094

-254

AT LEAST IT’S RAINED!!

The market suffered further losses this week as sentiment seems to go from bad to worse. The AWEX EMI gave up another 47 cents to 1225 ( a 5 year low) but just 2 cents in US$ terms to 800 as the FRX appreciated to 65.40 cents (up by 2.25 cents - 3.5%) almost the identical amount the market fell by - 3.7%. Unfortunately the losses aren’t attributed to just the FRX movements.  Virtually no sector was immune from the rapidly declining demand causing all fleece microns to fall by 50 to 90 cents as discounts widened for the dustier types but the better types (and some NM lots) sold to solid competition or even dearer rates. Skirtings fell by 20 to 50 cents while cardings retreated by 10 to 30 cents and crossbreds lost 10 to 40 cents depending on micron. 32 micron is at 270c clean, its lowest point for 23 years. This weeks losses caps off 2 disastrous months for the wool market. April saw the EMI fall by 76 cents (4.7%). This was minor compared to March - a collapse of 294 cents, 11.8%. Looking back to earlier in the year the price shifts were minor as January lost just 10 cents while in February the EMI gained 33 cents, certainly an erratic shift.

The fall in the market and the spread of Covid-19 that has whole countries in lockdown has seen retail spending collapse cannot be underestimated. March figures coming out of the USA saw retail spending slump by 8.7% compared to February, manufacturing output was back by 6.3% and industrial production shrunk by 5.4%, the largest fall since WWII. Buyers were adamant that even with restricted demand national catalogues of 35,000/week would be able to be absorbed. The average weekly offering has been 36,000 over the past 8 sales and just 24,000 in April but this has been a bridge too far. Most of the recent falls came in a period when New Zealand and South Africa had suspended wool sales but now both are back online - SA holding a sale via “Zoom” last week and back into the Port Elizabeth sale rooms from now and NZ selling, scouring and shipping wool again. Even though some form of normality is returning to China as shopping centres reopen, large retail outlets are reporting business is 20% below normal throughput before the shutdown as early stage processing in China is continuing but temporary closures for most combing mills are still in force in Europe, Malaysia and South America. Further down the chain a gradual lift in restrictions is giving some middle and end stage processors in Europe a gradual cranking up of machinery. Many astute judges believe the wool market still has some way to fall while others think that we are close to the bottom as the more production comes online, prices will rise in time but not till late 2020 (even into 2021). Talk about an each way bet!! At least it’s rained again!!

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1330

Main Buyers (This Week)

1

Techwool

2803

2

Endeavour Wool

1686

3

Tianyu Wool

1660

4

United Wool

1315

5

Seatech Ind.

1101

6

Aust. Merino

999

Eastern Market Indicators (AUD cents/kg clean)

1225 cents ê 47 cents compared with 24/04/2020

Northern Market Indicators (AUD cents/kg clean)

1259 cents ê 48 cents compared with 24/04/2020

AUD/USD Currency Exchange

0.6534 é 0.0226 compared with 24/04/2020

24 April 2020

Friday, April 24, 2020

 WEEKLY MARKET REPORT 

Week Ending 24th April, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S43/19

This Week

M43/19

Last Sale

S42/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1749n

1734

1748

+1

2483

-734

18

1593

1568

1593

0

2404

-811

19

1483

1486

1513

-30

2291

-808

20

1443

1468

1493

-50

2264n

-821

21 1438n 1459 1477 (M) -18 (M) 2238 (M) -779 (M)
26 - 865n 899n (M) -34 (M) 1501n (M) -636 (M)

28

674n

673

703n

-29

1244

-570

30

-

484

483 (M)

+1 (M)

976 (M)

-492 (M)

MC

865n

861n

886n

-21

1084

-219

NO REAL CHANGE!

The national offering increased to 25,000 bales this week but price improvements looked even further away as the AWEX EMI gave up another 20 cents to 1272. The fall was similar in US$ terms (26 cents to 802) as the FRX ascended by 1 cent to 63 cents. Broader Merino fleece wools, some Crossbreds and cardings were the main instigators for the fall in the EMI. Fine fleece types < 18.5 finished either side of firm while 19 and broader retreated by 30 to 50 cents, more for the poorer style lots. Skirtings had a solid sale while crossbreds finer than 28 micron lost 15 to 35 cents with broader types unchanged and cardings fell by 10/20 cents.

The smaller weekly offerings that will only average 25,000 to 30,000 bales for the foreseeable future are unlikely to help the market in the short term. Sydney’s total of 4696 bales this week was the smallest weekly offering for 23 years.  The yearly offering is 11% lower (153,000 bales) than last season. The fall in the market year on year has been spectacular. The EMI is 671 cents lower than this week 12 months ago (1943 to 1272), a 34% fall. As the table above shows all fleece microns are 750 to 800 cents behind last year’s levels. The comparison is worse in US$ terms, 1398 to 802, a 595 cent reduction or 42%. The FRX is 12% behind, 63 cents to 72.

Demand is the key to every commodity and, as we’ve seen in the news this week, oil producers were paying refineries to take their oil as storage capacity overflowed while prices fell into negative territory for the first time ever as production outstripped demand by 2 to 1, global airline travel is almost nonexistent and peak hour traffic in every major city is a thing of the past as travel restrictions mean very little fuel is being used (the only exception is on farm) despite prices at the bowser now at 20 year lows. Wool exports of raw wool was 10% lower from the 5 major exporting countries (NZ, SA, Australia, Uruguay and Argentina) this season to February, this due to the ongoing drought here in Australia, demand falling from August and the start of restrictions due to Covid-19. The figures for March/April will be worse.  Looking at the countries that process wool, China imported 11% less than the same period to February; Italy was 19% lower; and the Czech Republic 16% back; but India had a 5% improvement. These figures are guaranteed to get worse as March/April retail numbers come in because retail spending (bar food and liquor) keep falling globally.

Next week has a similar volume on offer but no magic bullet in sight. Despite the rapid decline of the market lately 21s are still trading at 83% of their value since 1995 - just 17% of that time spent over 1500 cents in 2011,2015 and most of the recent period since 2017.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1430

Main Buyers (This Week)

1

Techwool

3035

2

Tianyu Wool

2052

3

United Wool

1987

4

Aust. Merino

1982

5

Endeavour Wool

1569

6

PJ Morris

1265

Eastern Market Indicators (AUD cents/kg clean)

1272 cents ê 20 cents compared with 17/04/2020

Northern Market Indicators (AUD cents/kg clean)

1307 cents ê 18 cents compared with 17/04/2020

AUD/USD Currency Exchange

0.6308 é 0.0101 compared with 17/04/2020

17 April 2020

Friday, April 17, 2020

WEEKLY MARKET REPORT 

Week Ending 17th April, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S42/19

This Week

M42/19

Last Sale

S41/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1748

1768

1757

-9

2483

-735

18

1593

1601

1595

-2

2404

-811

19

1513

1519

1524

-11

2291

-778

20

1493

1481

1496

-3

2264n

-771

21 1488n 1477 1493n -5 2238 (M) -761 (M)
26 899n 899n 901n -2 1450n -551

28

703n

686

711n

-8

1244

-541

30

-

483

529 (M)

-46 (M)

976 (M)

-493 (M)

MC

886n

872n

891n

-5

1084

-198


THE SALE WE HAD TO HAVE??

This week’s sale that was originally rostered as a recess drew for a national catalogue of 21,000 bales but, after withdrawals, 18,000 were offered. The market barely moved as the AWEX EMI lost just 9 cents to fall below 1300 cents to 1292. As the A$ ascended by almost 3 cents (4%) to +64 cents, the market in US$ terms added 31 cents to its value to 828. Fleece movements were minimal as losses in Sydney were up to 10 cents while Melbourne’s market was in the positive by up to 15 cents, bar 20 micron and broader. Skirtings lost about 10 cents while cardings were either side of firm. Crossbreds were the biggest loser of any sector - 10 cents cheaper in Sydney but Melbourne’s 20 to 50 cent falls were the contributing factor to the EMI’s overall fall.

Was this week’s sale a success? Did we need to hold it?? Debate will rage for some time but next week’s volume is now 31,000 bales instead of the 45/50,000 that would have been offered if this week was kept as a recess. Most exporters warmed to the sale and the more manageable weekly volumes that are on offer for the next month which average about 30,000 bales, not too much in this volatile environment. Apart from the unscheduled sale that was held there were 3 on-line auctions trialed. AuctionsPlus held a sale yesterday with 4 brokers offering wool with 10 buyers bidding. WoolQ also held a sale this morning in which we and 3 other brokers participated with a similar number of exporters bidding. Another auction was held using Zoom on Wednesday morning. All three systems are in the very early stages of development and will need some refining of course but were met with enthusiasm from all parties and going forward will be fine tuned to complement the open-cry auction.

The IMF released new forecasts for global economic growth for 2020/21 (like darts at a dartboard). Economic growth is predicted to fall by 3% globally before recovering by 5.8% in 2021 as most developed country’s unemployment rates go to 10/15%. China’s economy could still actually grow this year by 1.2% and by 9.2% in 2021 but Italy’s economy could shrink by 9%. Even with the anticipated rebound next year all advanced economies will be smaller than 2019. China’s retail clothing sales for January/February were back by 33% compared to the same period last year and, in the US, March clothing sales were down by 50% compared to February - massive falls. This downturn, which will worsen, is being seen in retail orders to garment and fabric suppliers with unconfirmed reports of mass cancellations of orders by retailers with some big operators refusing to accept shipments. This is very bad news as consumer demand collapses for not only woolen clothing but whitegoods, electronics and a plethora of non-essential discretionary goods.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1430

Main Buyers (This Week)

1

Endeavour Wool

1970

2

Lempriere

1664

3

Tianyu Wool

1613

4

Aust. Merino

1099

5

Seatech Ind.

938

6

Kathaytex

847

Eastern Market Indicators (AUD cents/kg clean)

1292 cents ê 9 cents compared with 10/04/2020

Northern Market Indicators (AUD cents/kg clean)

1325 cents ê 8 cents compared with 10/04/2020

AUD/USD Currency Exchange

0.6409 é 0.0281 compared with 10/04/2020

10 January 2020

Thursday, April 09, 2020

 WEEKLY MARKET REPORT 

Week Ending 10th April, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S41/19

This Week

M41/19

Last Sale

S40/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1757

1760

1743

+14

2497

-740

18

1595

1585

1578

+17

2410

-615

19

1524

1512

1508

+16

2293

-769

20

1496

1486

1463

+33

2272

-776

21 1493n 1486 1458n +35 2264n -771
26 901n 928 951 (M) -23 (M) 1460n (M) -532 (M)

28

711n

705

703n

+8

1205n

-494

30

-

529

541 (M)

-12 (M)

998 (M)

-469 (M)

MC

891n

902n

899n

-8

1096

-205

MARKET STEADIES!

After last week’s disaster anything less than a solid market would’ve been met with tears. Fortunately the market did the right thing and recovered a minute amount of the previous series’ losses - the EMI up by 14 cents to 1301. All merino fleeces lifted by 10 to 35 cents. Skirtings moved ahead by 30 to 50 cents while cardings were unable to ascend in price giving up 10 to 20 cents across the board. Crossbreds had a mixed sale as < 28s were either side of firm while broader types lost 25/30 cents.

The large anticipated offering of 44,000 bales didn’t eventuate as mass withdrawals (22%) saw just 29,500 bales offered nationally. As global demand (especially in Europe & North America) collapses with import bans now in place in India and Europe we are virtually left with one market, China. Buyers are reporting that any weekly offering over 35,000 bales is too much both in volume and financially for China to handle on their own with quantity below this level being absorbed as this week’s sale proved. To help cap the volume of wool to be offered NASC (National Auction Selling Committee) has approved the proposal to limit the number of lots in each selling room to 1000/day in each centre sending a clear message that we will try to offer the volume that can be bought without too much angst.

There have been many varied opinions, from growers through to retailers, as to how the wool trade tackles the problems that Covid-19 has and will continue to cause our industry well into this year and beyond. It’s a given that the world will fall into recession and some economists even predicting a depression. Arguments for and against sales continuing, the July recess brought forward or shortened from its current form to 1 or 2 weeks have been the hot topics of discussion this week. Wool Industries Australia members met this morning and reaffirmed their support of free enterprise principles to allow the continuation of the exchange of ownership of wool in these difficult times. Sellers should be able to sell their wool to the highest bidder if they choose to sell and buyers also given that same right to buy wool or not to buy judged on their situation of finance and ability to sell wool down the pipeline through to the retailer. There is no support to cancel or suspend wool sales as New Zealand and South Africa have done.

Next week, which was originally a recess, has been added to the selling program with 21,000 bales on offer, this to avoid a backlog of wool should open-cry auctions be postponed due to Covid-19.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1440

Main Buyers (This Week)

1

Techwool

3870

2

Endeavour Wool

2716

3

Fox & Lillie

2415

4

Lempriere

2279

5

Tianyu Wool

2260

6

PJ Morris

1816

Eastern Market Indicators (AUD cents/kg clean)

1301 cents é 14 cents compared with 03/04/2020

Northern Market Indicators (AUD cents/kg clean)

1333 cents é 13 cents compared with 03/04/2020

AUD/USD Currency Exchange

0.6128 ê 0.0001 compared with 03/04/2020

3 April 2020

Friday, April 03, 2020

WEEKLY MARKET REPORT 

Week Ending 27th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S40/19

This Week

M40/19

Last Sale

S39/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1743

1706

1883

-140

2512

-769

18

1578

1560

1754

-176

2422

-844

19

1508

1491

1665

-157

2299

-791

20

1463

1471

1632

-169

2277

-814

21 1458n 1465 1609n -151 2268n -810
26 - 951 1081 (M) -130 (M) 1458n (M) -507 (M)

28

703n

731

871n

-168

1205n

-502

30

-

541

680n (M)

-139 (M)

963n (M)

-422 (M)

MC

899n

869n

987n

-88

1101

-202


HOW FAR DO WE LET THIS GO?

We thought we had seen it all over the years, stockpiles, droughts and the like but nothing really compares to, or conditions us to the marketing environment we are presently faced with. All players in our industry, from growers through to retailers, are in a bind and trying to choose between a raft of poor options in front of us.

Firstly, to deal with our own situation, on Monday I called a staff meeting to put a hold on all non essential travel for staff. This means that, unfortunately, we won’t be making shed visits or sending extra staff with clients to wool sales. The woolstore is operating at present as normal with transport so far unaffected and we are still testing wool for sale whilst they continue. Some staff have been asked to take leave and stay at home and some staff have been asked to work from home where possible but our office and store are manned and functioning well. Ian Sharp, who is based in Sydney, is collaborating with other brokers in our group who are also only sending one person to the sale.

The real question that is spinning round the industry is how long should we keep selling for, or how long we will be able to continue selling? There is real pressure mounting, particularly from European processors to call a halt as, whilst we sell into a downward spiral, it continues to erode their inventory positions but they cannot purchase whilst their borders and factories are closed. The same is the case for wool destined for India with Australian buyers sitting on quantities of purchased wool that they can’t ship. There is real fear that, in some cases, contracts will be reneged or renegotiated which will cause severe financial loss to some traders.

Whether we continue to sell or not, in the short term there is no doubt that the wool market is in for a tough trot like many commodities. We don’t know where the bottom is and can’t honestly advise growers whether they should sell now or wait. For those who choose to wait, it could be months before we see an upturn. My view is that we need to continue selling in some form. I’m not convinced that the public auction right now is the best way to do it. There are various private selling options and electronic sale methods currently being trialled. The EMI lost 155 cents this week or nearly 11%. We don’t need too many weeks like that but the major brokers have stated they will continue to sell regardless and allow growers the choice to sell or not and, as we saw last week, those that did decide to sell (which was only about half of the offering) still bore the brunt of a market with no confidence. Would a one, two or three week recess help? I think a brief recess is needed to judge better the global situation and allow traders time to catch up with their finances which are stretched to the limit.

Next week there will be 44,400 bales to be offered and growers need to think carefully about their selling instructions and consult well with their broker. Please keep safe and well, and we look forward to catching up in person when this has past.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

June 20

1400

Main Buyers (This Week)

1

Tianyu Wool

2607

2

Techwool

2475

3

Aust. Merino

2225

4

Kathaytex

1708

5

United Wool

1618

6

Endeavour Wool

1601


Eastern Market Indicators (AUD cents/kg clean)

1287 cents ê 155 cents compared with 27/03/2020


Northern Market Indicators (AUD cents/kg clean)

1320 cents ê 162 cents compared with 27/03/2020

   

AUD/USD Currency Exchange

0.6129 é 0.0209 compared with 27/03/2020

27 March 2020

Friday, March 27, 2020

 

 WEEKLY MARKET REPORT 

Week Ending 27th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S39/19

This Week

M39/19

Last Sale

S38/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1883

1868

1848n

+35

2513

-630

18

1754

1763

1715

+39

2437

-683

19

1665

1671

1644

+21

2316

-651

20

1632

1623

1628

+4

2293

-661

21 1609n 1621 1632n -23 2279n -670
26 - 1081n 1095n (M) -14 (M) 1433n (M) -352 (M)

28

871n

868

871n

0

1178n (M)

-310 (M)

30

690n

680

688 (M)

-8 (M)

945 (M)

-265 (M)

MC

987n

1021n

1004n

-17

1142

-155

WOOL SALES STILL ON!!

In the midst of Covid-19 engulfing the globe the wool market managed to keep its head above water as the AWEX EMI ascended by just 4 cents to 1442. In US$ terms the rise was significant (up 53 cents to 854), this due to the upward shift in the FRX to 59 cents - up by 3 cents (6%).  Merino fleece < 20 micron added 5 to 40 cents with 21s and broader falling by 25 cents. Skirtings also tracked upwards by 10 to 20 cents while cardings continued on their slide as the MCI fell below 1000 to 987, off by 17 cents. Crossbreds had a solid sale to finish unchanged. Reports from China say that all provinces bar Hubei (where Covid-19 originated) is back to full production but, due to lockdowns and restricted travel, consumer spending has collapsed by 30% in the past 6 weeks. In news from Italy, after trying to keep mills open for the foreseeable future, the decision was made to close all topmaking plants, woollen mills and spinners and weavers.      

As the world tries to comprehend the magnitude of the effects on everyday life from Covid-19, wool sales will continue. After the government’s announcement earlier in the week that auctions would cease, clarification today from the Dept. of Agriculture announces that livestock and wool sales could continue under the strict social distancing and hygiene practices as they are deemed an essential part of the Agricultural supply chain. Wool sales have moved from the sale rooms in each centre to the showfloors to allow sufficient space between buyers and auctioneers with sales to be restricted to 2 days (Tuesday/Wednesday) leaving Thursday free in case a centre has to cease selling 1 of the other 2 centres can sell their wool to avoid a build up and backlog of quantity. Australia will be the only country to offer wool to the world as South Africa and New Zealand have suspended wool sales for the next 3 weeks. Also released today was new protocol for shearing. (Both these documents in following email for your viewing.)

Many participants in the trade are also exploring other avenues of selling in case wool sales are forced to stop. All avenues of technology that can trade wool on electronic platforms for online selling are being closely monitored and several methods have already undergone trial should the need arise to convert to these methods of selling.

We are still hearing that the market has far more potential to fall than rise and, given the situation in Europe and North America with borders closed and lockdowns of cities and countries in full effect, consumer spending will take massive hits which could result in a wool market losing far more than the 10% we’ve seen to date.

         Southern Aurora Fwd Prices            

Micron

Date

Low

21

May 20

1570

Main Buyers (This Week)

1

Techwool

7463

2

Endeavour Wool

4010

3

Tianyu Wool

3454

4

Fox & Lillie

3367

5

Aust. Merino

2913

6

Kathaytex

2096


Eastern Market Indicators (AUD cents/kg clean)

1442 cents é cents compared with 20/03/2020


Northern Market Indicators (AUD cents/kg clean)

1482 cents é 13 cents compared with 20/03/2020

   

AUD/USD Currency Exchange

0.5920 é 0.0349 compared with 20/03/2020

Please click here for Shearing Operations Protocols


Please click here for Dept. of Agriculture Media Release

20 March 2020

Friday, March 20, 2020

WEEKLY MARKET REPORT 

Week Ending 20th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/19

This Week

M38/19

Last Sale

S37/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1848n

1848

1987

-139

2538

-690

18

1715

1757

1850

-135

2457

-742

19

1644

1662

1768

-124

2331

-689

20

1628

1647

1748

-120

2298

-670

21 1632n 1645 1743n -111 2283n -651
26 1095n 1095n 1123n -28 1408n -313

28

871n

870

875n

-4

1165n

-294

30

-

688

679 (M)

+9 (M)

929 (M)

-241 (M)

MC

1004n

1001n

1054n

-50

1172

-168

MARKET CAUGHT UP IN COMMODITY PLUNGES!

Stability was the last thing on buyers’ minds as the market plunged this week amid the chaos that Covid-19 is creating globally. After last series’ falls the market accelerated the losses this sale as the AWEX EMI collapsed by 83 cents to 1438 - its lowest point since September and 27% cheaper than 12 months ago. The fall was more severe in US$ terms (181 cents to 801, 18% for the week and 43% lower than last year) as the FRX dropped like a stone to 55 cents. All MPGs recorded losses of 100+ cents (110 to 140) with the discounts for the inferior types still becoming larger and larger. Skirtings had a similar scenario peeling off by about 100 cents while merino cardings gave up 30 to 90 cents as the MCI fell by 50 cents 1004. Prices are still at reasonable levels for this sector but, as  an indication of just how high these types have been, the MCI is at a percentile ranking of just 7% for the past 5 years meaning it’s been higher 93% of that time. Crossbreds were the best performing of all sectors as 26s and finer lost 30 cents while all others were either side of firm.

It looks as though the wool market is catching up to other commodities and global stock markets as far as falls are concerned as the world slips into certain recession. The EMI has lost 146 cents over the past 3 sales but still far less than oil, iron ore or stock markets and currencies. Just 2 weeks ago the AU$ against the US$ was 66 cents. Today it’s lifted to 57 from 55 last night. Normally such a dramatic fall in the FRX would convert into business being done and a rush to buy wool at the new favourable FRX - but not now. The big depreciation of the AU$, 13%, has masked the heavy price losses of wool in real terms. Over 70% of wool is traded in foreign currencies all of which have appreciated by 10 to 14%, the wool market falling by 10% over the past 4 sales.

Chinese top-makers and exporters to China dominated the market as European interest was almost non-existent except for the odd specialist superfine order. Schneider reported that their mill in Italy is still in full operation despite the epicentre of the virus that has spread throughout Europe starting in that region of Italy. Despite the falling market Chinese interest remains strong as most factories have returned to normal production. The dearer market in Fremantle yesterday gives hope that the market might be able to level out next week.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

May 20

1570

Main Buyers (This Week)

1

Tianyu Wool

3671

2

Endeavour Wool

3227

3

Techwool

3172

4

Fox & Lillie

2706

5

Aust. Merino

2676

6

Kathaytex

2210


Eastern Market Indicators (AUD cents/kg clean)

1438 cents  83 cents compared with 13/03/2020


Northern Market Indicators (AUD cents/kg clean)

1469 cents  88 cents compared with 13/03/2020

   

AUD/USD Currency Exchange

0.5571  0.0887 compared with 13/03/2020

13 March 2020

Friday, March 13, 2020

WEEKLY MARKET REPORT 

Week Ending 13th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S37/19

This Week

M37/19

Last Sale

S35/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1987

1994

2072

-85

2560

-573

18

1850

1888

1932

-82

2472

-522

19

1768

1780

1826

-58

2340

-572

20

1748

1753

1803

-55

2309

-561

21 1743n 1736 1783n -40 2291n -548
26 1123n 1138n 1145n -22 1411n -288

28

875n

880

884n

-9

1141 (M)

-261 (M)

30

-

679n

676 (M)

+3 (M)

921 (M)

-142 (M)

MC

1054n

1081n

1090n

-36

1238

-184

COVID-19 TAKES HOLD!

Ever since the Covid-19 outbreak started everyone in the wool trade had an opinion on the effect, when it would make an impact and how long the aftershock would last. The year, to date, has certainly been eventful with big price swings in the market, an extended Chinese New Year due to the start of Covid-19 and all the associated drama with it and a cyber attack on the trade’s software provider that put a stop to wool sales for 1 week. Through February the market actually improved marginally to everyone’s surprise with most pundits tipping a downturn in demand for textiles and a vast array of consumer goods as people’s spending habits slow to a crawl. Governments across the globe are rolling out spending stimulus packages to try to avert what some economists are already resigned to - a global recession.

The AWEX EMI had been trading in a narrow band of 1548 to 1584 last month but showfloor chatter was increasingly becoming negative as all other commodities’ prices have fallen sharply and stock markets around the world have taken their biggest hammering since Black Friday in 1987. The opening day of this weeks wool sale saw heavy losses as merino fleece types were wound back by 40 to 75 cents, less for the better style lots with some types < 65% yield attracting a premium and discounts still increasing for wools below 55% yield. Melbourne did stage a late recovery in the opening session which saw the market just cheaper on the final day. 17 to 18 micron fell by 85 cents for the week while 16.5s and 18.5 and coarser retreated by 40 to 65 cents. Skirtings fell by 50 to 60 cents, while merino cardings gave up 20 to 45 cents from the previous series’ levels. Crossbreds looked to be the only sector to have escaped the big falls of the merino selection with all types bar 25/26 micron (-20) to finish on par.

It seems as though Covid-19 is affecting the globe in nearly all aspects of life.  A plethora of sporting events and competitions have been delayed or cancelled as well as restricting the public from gathering in large numbers to try and restrict the spread of the virus.  The wool market has been relatively untouched up until now but could be swept up in the economic turmoil that has engulfed the world. We must remember that the market is still in a very healthy price range but ill winds are blowing and, given circumstances around the globe, most are predicting a cheapening trend well before any sort of recovery starts which now looks a long way off - well into the second half of the year or beyond. Next sale has 50,000 bales on offer as Melbourne still has some wool to clear from the sale that was cancelled last week. Here’s hoping for some sort of stability.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

April 20

1710

Main Buyers (This Week)

1

Techwool

5174

2

Tianyu Wool

3200

3

Endeavour Wool

3001

4

Fox & Lillie

2619

5

United Wool

2268

6

PJ Morris Wool

2049


Eastern Market Indicators (AUD cents/kg clean)

1521 cents  41 cents compared with 06/03/2020


Northern Market Indicators (AUD cents/kg clean)

1557 cents  48 cents compared with 06/03/2020

   

AUD/USD Currency Exchange

0.6458  0.0164 compared with 06/03/2020

6th March 2020

Friday, March 06, 2020

 WEEKLY MARKET REPORT 

Week Ending 6th March, 2020

 AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S36/19

This Week

M36/19

Last Sale

S34/19

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

2072

2058

2082

-10

2608

-536

18

1932

1943

1945

-13

2520

-588

19

1826

1799

1839

-13

2381

-555

20

1803

1782

1813

-10

2340

-537

21 1783n 1766 1798n -15 2321 -538
26 1145n 1153 1151n -6 1451n -306

28

884n

881

894n

-10

1169

-285

30

-

676

675(M)

+1(M)

945(M)

-269(M)

MC

1090n

1108n

1105n

-15

1237

-147

WOOL SALES RESUME ON A SOFTER NOTE

Wool sales recommenced this week as most participants reported that essential components of the software programme were up and running enough to conduct the wool sale. The elevated offering of 69,000 bales didn’t eventuate; the total selection came to 62,000 bales (the largest weekly offering for 12 years) of which 24% was passed-in, most of that in the last session. The opening day actually saw modest increases on the Eastern seaboard but a bit cheaper in Fremantle but, by late on the final day, the extra quantity and big volumes of poorer style types was too much for the trade to absorb as the market tailed off. Losses ranged from 5 to 20 cents for all merino fleece microns with discounts for inferior types becoming larger - another 50 to 100 cents off.

Skirtings followed the merino fleece price direction - dearer for the better types in the opening session only to fall away late on the final day to finish 10 to 30 cents lower. Locks were the only type to lose ground in the carding sector (20 to 30 cents back) while crossbreds withstood most of the negative tone in the merino sector to finish the week 5/10 cents off.

The scenario of pushing 2 weeks of wool sales into one wasn’t ideal but, under the circumstances, the trade was left with no alternative. The higher volume, the quality of the offering and the FRX that favoured the US$ by 1% after it hit its lowest point since the GFC last week was always going to put the market under pressure. It was only early last week before the cyber attack on Talman that showfloor chatter had the market adding to its values but now uncertainty is commonplace as to where the market might be headed as Covid-19 spreads to Europe and other parts of the globe but good news may be coming from China as the number of deaths and reported cases has been on the decrease over the past 48 hours. Global economic growth will be stymied in the March and June quarters as panic on stock markets this week had investors running for cover as the big sell-off came amid fears of a global recession caused by Covid-19 which will curb consumer spending dramatically sending demand for a vast array of goods (including woollen clothing and products) lower. Quantities next week drop to a more manageable 46,000 bales as Melbourne is the only centre to have a bit of a backlog of wool from the last 2 weeks. We hold our breath that financial stress for buyers is over and letters of credit keep flowing in and demand holds. If anyone has any agistment available could they please contact Luke or Don. Despite the widespread rain we still have clients in need of water and are still feeding their stock.

Southern Aurora Fwd Prices              

Micron

Date

Low

21

March 20

1795

Main Buyers (This Week)

1

Techwool

8614

2

Fox & Lillie

5280

3

Endeavour Wool

4531

4

Tianyu Wool

3782

5

Seatech

3563

6

Aust. Merino

2608


Eastern Market Indicators (AUD cents/kg clean)

1562 cents  19 cents compared with 28/02/2020


Northern Market Indicators (AUD cents/kg clean)

1605 cents  13 cents compared with 28/02/2020

   

AUD/USD Currency Exchange

0.6622  0.0029 compared with 28/02/2020