Weekly Market Reports


12 July 2013

Friday, July 12, 2013

WEEKLY MARKET REPORT

Week Ending 12th July, 2013

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S02/13

This Week

M02/13

Last Week

S01/13

Sydney Change

Last Year

Sydney

Sydney Yearly Change

17

1312n

1315n

1294

+18

1429

-117

18

1192

1167

1173

+19

1315

-123

19

1124

1117

1114

+10

1241

-117

20

1090

1091

1097

-7

1192

-102

21

1088

1089

1098

-10

1197

-109

22

1087n

1091

1101n

-14

1195n

-108

23

-

1093n

1108n (M)

-15 (M)

1213 (M)

-120 (M)

28

642

643

652

-10

637

+5

30

591

598

591

0

586

+5

32

496n

501n

496n

0

494n

+2

MC

825

827n

828

-3

610n

+215

TOUGH BUT FAIR

With the largest offering in 13 weeks the wool market made a reasonable fist of the last sale for three weeks. The offering of just short of 50,000 bales saw 90.5% sold to the trade nationally with a slightly better rate in the North. The market opened on a good note on Wednesday probably about ten cents better for good types, but waned as the day progressed to end in negative territory by the close. On Thursday, with the recess in mind, not surprisingly the market bounced a little and gave buyers the breathing space they need to do some business during the recess. The pleasing result this week was the increased interest in fine wool types (particularly 18 microns and finer) with some select lots up to 40 cents dearer.

Our catalogue of close to 2000 bales was first up on Wednesday and included a good selection of well grown wools. About half the catalogue was from the Louth and Tilpa area and, despite a very long dry spell up till May, the wool although hungry fine maintained good tensile strength and little or no colour or veg matter. What was very evident this week were the benefits of proper clip preparation. The well prepared clips saw the small increase for all main lines whilst the cast lines did see some weaker competition. Skirtings were slightly off the pace from last week and cardings were again red hot. The locks in our catalogue ranged between 470 cents and 560 cents which equates at close to $1000 a bale! Added to this, stains were all making between 300 and 400 cents so, when the averages were done at day’s end, the overall result isn’t that far behind last year’s clip results.

Crossbreds were again well supported and closed the week close to par on the previous week. The EMI this week last year closed at 1067 so the close this week is about 5% less than last year. What is interesting from recent AWTA data was that the national wool clip in the space of 12 months has reduced micron by 0.5 which is a big year on year reduction. This will, in some part, explain the problems for the finer end of the market and also explain why 22 and 23 microns have been outselling 19.5, 20 and 21 microns for weeks. Our newsletter due out next week will have more detail on the shift in production of recent years.

The annual wool buyer’s end of season social function known as “Carding Night” was held last night in Melbourne and the only two representatives from the North (buyer or broker) were Luke and Andrew, who no doubt enjoyed the company of our buyer customers into the wee small hours. Hopefully the goodwill extends into the sale room when sales re-commence on the 5th August.

There is positive talk for the coming season. It is expected that a decent winter in many wool growing areas will boost wool cut and micron and ease the pressure of fine wool.

Fwd. Price Trades W/E 12 July, 2013

Maturity

Low

High

19.5

21-Aug-13

1115

1115

19

18-Sep-13

1125

1125

19.5

09-Oct-13

1080

1080

 

1

Techwool

6354

2

PJ Morris

3942

3

Fox & Lillie

3808

4

Tianyu Wool Pty Ltd

2722

5

Australian Merino Exp.

2393

6

Chinatex (Aust)

2270

7

Michell Australia

2070

8

QLD Cotton

2063

9

G Schneider (Aust)

1913

 

Eastern Market Indicators (AUD cents/kg clean)                                    AUD/USD Currency Exchange

1007 cents ê  4 cents compared with 05/07/2013                                  0.9302 é 0.0191 compared with 05/07/2013

 

Northern Market Indicators (AUD cents/kg clean)

1020 cents ê  6 cents compared with 05/07/2013

 

5 July 2013

Friday, July 05, 2013

WEEKLY MARKET REPORT

Week Ending 5th July, 2013

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

05/07/2013

Last Week

28/06/2013

Change

Last Year

06/07/2012

Yearly Change

17

1294

1335

-41

1430

-136

18

1173

1227

-54

1337

-164

19

1114

1156

-42

1282

-168

20

1097

1132

-35

1236

-139

21

1098

1133

-35

1229

-131

22

1101n

1167n

-66

1224

-123

26

831n

838n

-7

-

-

28

652

662

-10

637

+15

30

591

603n

-12

584n

+7

32

503n (M)

505n (M)

-2

493n (M)

+10

MC

828

829

-1

608n

+220

SEASON STARTS ON A TOUGHER NOTE

There was no respite for the wool market as the opening sale of the season continued on from where last season finished-last week-.The slightly dearer market in Fremantle last Thursday didn’t filter through to this week’s Eastern Seaboard only offering of 34,000 bales. Sharp falls across all fleece indicators, resulted in the EMI giving up 36 cents to open the 2013/14 season, now hovering at just above 1000 cents (1011). A couple of factors conspired against us to send the market in a downward spiral - the biggest weekly fall in three months. Whispers of credit pressure in China and the raising of interest rates to borrow money bought a few mill’s buying patterns to a halt. Most buying houses and mills were accessing money under 6%, but now all rates have jumped to over 7 %. Even before this rise, murmurs of difficulty in accessing finance were more and more common. Also, news emerged this week of a major Chinese processer in trouble with big volumes of greasy and processed stock to be offered to the market at a discount to auction prices. With the exchange rate still jumping around, even with a real possibility that it will fall through the 90 cent barrier and these two other factors now very much in play, still makes trading a tricky business.

Most fleece indicators, 17 to 21s, conceded 35 to 55 cents with 22s finally adjusting to a level close to, but still ahead of, the 19.5 to 21 indicator giving up 66 cents to close at 1101. Despite these large falls and big discounts back in vogue for colour, tender and cot, the best style, FNF lots over 40nkts attracted solid support. A small selection of Spinners in ultra-fine micron ranges gained significant premiums over the lower style types and saw the 16.5 indicator add a modest 3 cent rise to its value.  One buyer, New England Wool, a specialist super-fine buyer, commented on the outstanding preparation of one of our clips in the catalogue from Brewarrina. He bought 41 bales of this clip’s fleece wool with specs averaging 18.68 mic, 0.8 VM, 72% yld, 87mm, 45 nkt and an average mid-break of 51%, which led him to pay 15 to 25 cents clean above the indicators for these lots. This order, for renowned Italian processor, Barberus, specifies “Spinners” style or better, the buyer couldn’t let these best-topmaking wools escape him, saying they would fit into the order perfectly. Another lot from Gilgandra at 19.5 micron and 1.7 VM was 13 cents better than the indicator, so even in a retreating market there can be some bright spots. Well done to both growers!

The good run that room 2 lots have had over the last 2 months continued to compound as all sectors lost ground on both days. Skirtings fared the worst, as the opening session saw a 30 cent fall for 5% VM and a 40 cent loss for burrier lots. Thursday saw the higher VM lots fully firm as the 3% VM types gave up another 10 cents. There was very little movement in the carding sector as the MCI lost just 1 cent to have the all time record still in sight, but not broken yet. Crossbreds didn’t escape the carnage either as 26 to 32 microns fell 5 to 10 cents.

Next week is the final sale before the annual three week winter recess. Fremantle is back on line to have a large national catalogue of 53,000 bales - the biggest since early April with a market not moving too much either way.

Fwd. Price Trades W/E 05 July, 2013

Maturity

Low

High

19.5

21-Aug-13

1115

1115

21

21-Aug-13

1095

1095

19

18-Sep-13

1125

1125

 

1

Techwool

4425

2

Fox & Lillie

3600

3

Australian Merino Exp.

2733

4

Chinatex (Aust)

1858

5

Modiano (Aust)

1656

6

Tianyu Wool Pty Ltd

1654

7

Victoria Wool Proc.

1379

8

Sky Wool

765

9

AS Gedge (Aust)

697

 

Eastern Market Indicators (AUD cents/kg clean)                                    AUD/USD Currency Exchange

1011 cents ê 36 cents compared with 28/06/2013                                 0.9111 ê 0.0210 compared with 28/06/2013

 

Northern Market Indicators (AUD cents/kg clean)

1026 cents ê 33 cents compared with 28/06/2013