Archive for category: Australian Weekly Market Report

Comment

There were only minor changes in the market from the close in Melbourne last week. Prices for better specification types from 18.0 to 21.0 micron were generally firm over the week with some irregular results related mainly to the tested vegetable matter. Considering the large volume offering it was a very satisfactory result. There was some adjustment in the superfine wool market but it’s worth noting the offering in Melbourne last Thursday included some stylish and well-prepared superfine clips that attracted Italian competition. It was noted again that, while Chinese interests again dominated, there was competition from a wider range of buyers.

AWEX Eastern Indicator compared with 09/07/2021

Eastern Indicator

Close: 1428

Change in % +0.56

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 3898

Change in %:  +0.67

16 Micron

Close: 3127

Change in %: -2.19

17 Micron

Close: 2671

Change in %: -1.55

18 Micron

Close: 2287

Change in %: -0.91

19 Micron

Close: 1884

Change in %: -1.97

Authentico Indicator

Close: 2691

Change in %: -1.25

Forecast

Wool auctions are now in the winter recess with sales to resume the week of August 9th (week 06).

Auction offering – current week

Market          Sale         Offered        Sold       Passed In

North                      S 02                  18005                 15849               12.0%

South                     M 02                  21839                 19230               11.9%

West                       F 02                    9159                    7362                19.6%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      recess

South                      recess

West                        recess

If you want to see the complete Wool Sales Roster click here.

Comment

Superfine wools were again in keen demand despite the relatively high price. We noticed selected lots of 15.5 micron and finer were dearer this week in a nice stylish offering. As is often the result in a softer market, the NM and CM certified lines were less impacted by the cheaper trend. This is reflected in our Authentico index values which show movements of around 1 to 1.5% compared to the EMI which fell 3% for the week. NM and CM declared lines can attract demand further down the supply chain and, when considering quality as well, tend to be less exposed to daily market volatility.

AWEX Eastern Indicator compared with 25/06/2021

Eastern Indicator

Close: 1423

Change in % -3.06

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 3689

Change in %:  +4.06

16 Micron

Close: 3136

Change in %: -0.95

17 Micron

Close: 2667

Change in %: -1.55

18 Micron

Close: 2296

Change in %: +0.75

19 Micron

Close: 1903

Change in %: -1.35

Authentico Indicator

Close: 2675

Change in %: -0.07

Forecast

The AWEX weekly report for WK53 has highlighted some significant figures that reflect the situation with regards to supply and demand at the moment. Over the past few years, we’ve often reflected on the reduced supply being a significant factor on the wool market. In the past 12 months, according to the AWEX report, we’ve sold 311,000 more bales (+21%) than the 2019 season and at the same time the AWEX EMI has ended the year 28% higher. The volume sold is a reflection of wool that was held back in the early stage of 2020 (last season) and since sold in much better market conditions. This has occurred during the global pandemic that has caused havoc on the retail sector. Put very simply, it can only be considered a positive for wool. We are of the opinion that some grower held stock and the regular weekly passed in wool, can only be an asset for long-term market stability. We encourage growers to carefully consider the market circumstances with their broker when their wool is available for sale. Under certain circumstances, if they can hold wool for a better market, we’d encourage them to do so. We have 55,000 bales currently rostered for next week in a soft market. This might be the perfect opportunity for such a discussion.

Auction offering – current week

Market          Sale         Offered        Sold       Passed In

North                      S 53                  10652                  9205               13.6%

South                     M 53                 20904                 16199               22.5%

West                       F 53                   11291                    8178               27.6

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 01                     T-W                             16832

South                     M 01                   T-W-T                           25595

West                       F 01                      T-W                             12556

If you want to see the complete Wool Sales Roster click here.

Comment

All merino types and descriptions were in demand this week. Prior to the opening of the auction, prices were expected to be strong with exporters and traders hinting at healthy sales since the previous close. The market opened strongly and continued. The most inferior types were initially the most affected with volume and price the most important factors. On day two there were some signs that buyers were keener on the better specification, which were clearly better value. In monetary terms, the finer types continue to increase the most but there was a shift in focus this week towards the medium and broader merinos when considered as a percentage gain. Some were likely looking for better value in this range.

AWEX Eastern Indicator compared with 11/06/2021

Eastern Indicator

Close: 1448

Change in % +3.95

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 3584

Change in %:  +5.04

16 Micron

Close: 3111

Change in %: +5.21

17 Micron

Close: 2688

Change in %: +4.31

18 Micron

Close: 2325

Change in %: +5.68

19 Micron

Close: 1929

Change in %: +5.87

Authentico Indicator

Close: 2677

Change in %: +5.06

Forecast

The most obvious signal from this week’s sale was how little focus there was on staple length or strength. Often, we talk about mid break being a key characteristic that determines demand. This was not an issue this week. All qualities within a particular point of micron, regardless of length, strength or mid break, were all costing the same. This is an indication of the market dominance of China but also the focus on knitting types rather than the weaving types which typically require better performing characteristics.

The Australian dollar has eased significantly against the USD overnight. This could have an interesting influence on the local market if maintained until Tuesday.

Auction offering – current week

Market          Sale         Offered        Sold       Passed In

North                      S 51                  12554                 12062               3.9%

South                     M 51                  19564                18618                4.8%

West                       F 51                   10378                 9847                 5.1%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 52                     T-W                             12525

South                     M 52                     T-W                            22075

West                       F 52                      no sale

If you want to see the complete Wool Sales Roster click here.

Comment

All types and categories attracted strong competition this week but it was the fine wools that were in keenest demand. Short fine merino types for knitwear are in strong demand and limited supply so the price gap between them and the better weaving types is minimal. In contrast, the price range between fine wool and the medium to broader micron merinos is now at the largest premium seen for many years. While it’s not all bad news for the medium wool producers who benefit from greater wool cut, it’s fantastic news for our super fine wool producer friends that for too long have been behind in terms of returns in comparison. Crossbred wools are still struggling to gain any real demand and in particular those crossbred clips that have not been prepared to the code of practice are being discounted heavily. The Fremantle market closed stronger than the East. This could either be market driven or the fact that there is no sale next week in Fremantle leaving exporters a little short to complete container loads for prompt export.

AWEX Eastern Indicator compared with 27/05/2021

Eastern Indicator

Close: 1343

Change in % +1.74

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 3353

Change in %:  +1.85

16 Micron

Close: 2901

Change in %: +2.33

17 Micron

Close: 2489

Change in %: +0.69

18 Micron

Close: 2133

Change in %: +2.40

19 Micron

Close: 1792

Change in %: +2.28

Authentico Indicator

Close: 2481

Change in %: +1.76

Forecast

We have noted the better demand for fine and superfine knitting types and the increasing price gap between fine and medium micron merino wools. The AWEX MPG (micron price guide) for 17.5 micron now sits at around a 46% premium over the 19.5 MPG. AWTA test figures for the season indicate a 5.5% increase in total tested volume between July 2020 and May 2021 compared to the same period the previous year. However, a look into the micron figures reveals a different trend. Tested volume 16.5 micron and finer is 27% below the same period the previous season and 16.6/17.5 is 13.9% below. The ultrafine production is even more alarming with 12.5 / 14.5 micron approximately 50% down in volume in comparison. These figures would certainly be a factor influencing the current market trend.

Auction offering – current week

Market          Sale         Offered        Sold       Passed In

North                      S 49                  10864                 10522               3.1%

South                     M 49                 20736                  18951               8.6%

West                       F 49                   6990                    6251               10.6%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 50                     T-W                             13267

South                     M 50                     T-W                            25407

West                       F 50                    no sale

If you want to see the complete Wool Sales Roster click here.

Comment

The trade focus is now on vegetable matter with the better specification fleece tested with less than 1.5% VM attracting the most competition. The market remains extremely resilient at this level with some variability based only on quality. Fine wool prices are traditionally more volatile at this time of the year which is in line with the variable supply of fine types. The market movement will very much depend on the wool available on the day. It’s been a very encouraging period for the wool market and this is helping to create a greater level of confidence.

AWEX Eastern Indicator compared with 14/05/2021

Eastern Indicator

Close: 1315

Change in % +0.69

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Authentico Index Values

15 Micron

Close: 3448

Change in %:  +2.62

16 Micron

Close: 2757

Change in %: -5.42

17 Micron

Close: 2383

Change in %: +0.55

18 Micron

Close: 2062

Change in %: +1.58

19 Micron

Close: 1741

Change in %: +2.11

Authentico Indicator

Close: 2404

Change in %: -0.21

Forecast

The national offering is expected to tail off a little within a few weeks. Growers have shown that they are prepared to wait if their wool doesn’t meet the general market level. This trend has been a noticeable shift in the grower’s risk management. With wool income now matched to the income from the sheep and meat for many wool producers, growers are prepared and able to wait for more stable market conditions and this is certainly helping the market during this period.

Auction offering – current week

Market          Sale         Offered        Sold       Passed In

North                      S 47                  12391                   11116                10.3%

South                     M 47                 22674                  20156               11.1%

West                       F 47                   6792                    6028                11.2%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 48                     T-W                         12732

South                     M 48                   T-W-T                       27698

West                       F 48                      T-W                          6598

If you want to see the complete Wool Sales Roster click here.