WEEKLY MARKET REPORT

Week Ending 19^th October, 2018

AWEX Northern Micron Indices Comparison

FINE WOOL GLUT HINDERS MARKET!

Last sale’s recovery was short lived as the market took a turn for the worst as all sectors fell sharply. The 53 cent fall for the AWEX EMI to 1970 was equal to the losses of 3 weeks ago and just shy of the 62 cent collapse in the opening sale of the season. No type was immune from the negative tone despite the superior quality of the selection on offer with the 3^rd designated Super-fine sale of the season held in Sydney. The over-supply of sub 17 microns suffered the largest falls (100 to 150 cents) and even more for lots with poor additional measurement results. 19.5 to 17.5 also fell 50 to 75 cents with the broader microns > 20 giving up 20 cents late in the final session. Growers were caught by the size of the losses as 23% of the national fleece catalogue was passed-in.

Skirtings also took a decent hit with the high concentration of < 17.5 micron taking the brunt of the falls ranging from 40 to 60 cents. Cardings were the worst performing sector as the 3 centres averaged 100 cent losses. High flying LKS collapsed to the tune of 100 to 150 cents with CRT/STN giving up 30 to 40 cents as 25% of the Sydney offering failed to sell. Crossbreds looked to escape the carnage of their merino cousins as losses ranged from 10 to 30 cents.

Despite the national catalogue falling further behind last year’s figures, now 74,300 bales which is 2 selling weeks or 13% the market couldn’t sustain last series mini recovery. The vast majority of the offering is still very much drought affected and, as a result, finer than what most Chinese mills are looking for and not up to the standard that the Europeans require. This sale’s merino fleece selection on the East Coast was a full micron finer than the corresponding sale last year. This is backed up by the latest AWTA figures that, despite testing 11% less wool than last season to date, 70% more wool tested below 16.5, 19% more in the 16.6 to 17.5 range and 9% up 17.6 to 18.5 micron bracket.

European demand does remain strong on the “right types” as does interest from India but once outside their specs the price gap is up to 800 cents from the very best types to the worst. Demand remains strong for 19 microns and broader as the large topmakers and indent buyers from China are still active and could lead to better market conditions reappearing sooner rather than later.

Next week’s offering is just shy of 39,000 bales with a bit less fine wool on offer to hopefully see a settled market. The slight lift in the FRX didn’t seem to be a hindrance this sale but most pundits don’t want to see the A$ go higher. Don’t forget just 2 weeks left to vote for Woolpoll 2018, just 10% of eligible growers have voted so far.

                               Ag Concepts Fwd Prices as at 19 October, 2018

              Main Buyers (this week)

AUD/USD Currency Exchange

0.7133 é 0.0063 compared with 12/10/2018

WEEKLY MARKET REPORT

Week Ending 12^th October, 2018

AWEX Northern Micron Indices Comparison

MARKET ON THE UPWARD TREND, STORMS STILL PATCHY

The wool market did what everyone was hoping for after last Thursday’s solid finish to that series. Good gains over the 2 days had the AWEX EMI recapture almost a third of its losses from the previous 3 sales, up by 31 cents to sit back over the 2000 cent mark at 2023. The relative stability of the FRX saw the EMI in $US post a 20 cent gain to 1430. The biggest benefactors were the broader microns, > 19 up by 35 to 60 cents as finer microns were a touch cheaper bar the superior types that were quoted 50/60 dearer under renewed competition.

Skirtings also followed the lead from their fleece wool counterparts ascending by 20 to 30 cents with emphasis on < 5% VM. Cardings had a flat sale after LKS gave up 10/20 cents while STN added a similar amount. This halted the steep falls of the past 3 sales (178 cents) after setting a new record in early September. Crossbreds had an up and down series as < 26s lost 20 to 30 cents while broader types added up to 10 cents.

The market certainly benefitted from the lower $A v $US rate on Wednesday as the conversion rate was at its best for almost 3 years. The lift in the market a relief for growers as many thought the correction was in the wind for last sale. Exporters scrambled to cover off inventory as some of the larger top-makers and indent buyers have made the decision to ramp up their purchases to ensure supply for upcoming increased machinery demands. Focus is well and truly on a shortfall in supply and a major concern for all in the processing chain. We are already 64,500 bales (12%) behind last season’s volume offered with this figure to become larger. With this in mind the Aust. Wool Prod. Forecasting Committee will meet on 14^th November, 4 weeks earlier than was scheduled to give an updated report on how the numbers will be crunched re forecasted volumes post-Christmas something the Global Textile industry will be keeping a very close eye on.

All growers should have now received information for the Woolpoll 2018 vote. There are only 3 weeks left to vote either by reply paid mail, a toll free number (1800 211 736) or online at www.woolpoll.com.au AWI has been holding a series of info seminars to talk about marketing and research and the vote on the level of wool tax growers can vote on 1 of 5 options. Meetings at Dunedoo and Wellington saw about 30 growers at each - AWI stressed the importance of voting and how the reduced volume of wool sold will affect the amount of tax to be collected thus putting some projects at risk due to less wool tax revenue. Market should be stable with 37,000 bales on offer.        

                                     Ag Concepts Fwd Prices as at 12 October, 2018

                 Main Buyers (this week)

AUD/USD Currency Exchange

0.7070 ê 0.0010 compared with 5/10/2018

WEEKLY MARKET REPORT

Week Ending 28^th September, 2018

AWEX Northern Micron Indices Comparison

60,000 BALES DOWN BY WEEK 13.... LONG WAY TO GO!

It was another lacklustre week as indicators tumbled across all three centres. Due to AFL fever in Melbourne and public holiday today, the Melbourne series started on Tuesday in isolation and continued the trend of buyer resistance. The EMI has shed 81 cents in the last two weeks with the merino carding indicator losing 144 cents over the fortnight. The dollar was basically unchanged this week so the relatively small offering of just over 32,000 bales could only blame an increasing quantity of “off types” for the decline. Hardest hit were the droughty higher VM types over 4% where buyers were very selective. The carding market seems to have run into some real issues and one cannot but feel that prices over 1500 cents for these types are very hard to sustain. The exporters we have spoken with who have recently returned from China aren’t overly nervous about the price - it’s more fear of supply that is of concern. Yes, the last six month upward shift hasn’t fully been digested and there will be an increase in blending but the Chinese are very enthusiastic about using wool and keeping it foremost in their products. Nearly all mills are operating hand to mouth with no stock and we know there is little in the pipeline here of unsold wool, so the year to date offering statistic of 59,611 less bales offered is a real concern for all.

All woolgrowers should have received their Woolpoll voting packs this week with information about AWI’s activities and future plans. The important issue for all to attend to is voting for the wool levy for the next three years. The wool levy has been 2% since AWI started in 2001 and it is recommended by the Board that this rate continue. Initially the whole levy went towards R & D but, since 2010, AWI re-entered marketing and now spends 60% of it’s income on marketing. There is tangible evidence that this has had a significant impact and certainly helped put the market where it is. Whilst levy income has increased as the price has, downturn in production will severely impact and offset this. I am keen to see the levy remain at 2%.

For those who wish to hear first hand about AWI’s performance and projects there will be a lunchtime event at Dunedoo 11am, Monday, October 8 and a 5pm meeting at Wellington followed by drinks and nibbles the same day. We urge you to make the time to come along and take some time out. Please call 1800 070 099 to register at no cost.

Next week a larger offering of 42,500 bales will be offered with maybe a hint of levelling out late in Fremantle yesterday giving us hope of a firm market next week.

                             Ag Concepts Fwd Prices as at 28 September, 2018

Main Buyers (this week)

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