AUSTRALIAN WEEKLY MARKET REPORT

Comment

Wool auction sales continued this week with 37,000 bales offered and 20,000 eventually sold. The passed in rate increased as the sale progressed.

Our company view is that sales should not be proceeding under these extraordinary circumstances. We have almost the entire global retail sector closed down. The impact this is having down the supply chain is enormous. Access and availability to the necessary cash is not there. The unwillingness of buyers to buy when they have unpaid, undelivered and un-shipped wool on their books with little to no interest from clients is impacting significantly on the market. These are not normal circumstances.

Trial auctions via video link appears a real option for the industry but without the necessary cash to support the wool that is coming onto the market, price levels have been affected.

One option we would like to be considered is to move the 3-week July recess to be effective immediately, then, presuming circumstances are improving at that time, we would sell through July as a compromise. This would help our European business, including clients, who are in lock down now. All things considered, they should be open through July. Or at least the situation will be clearer. This might also encourage some European wool industries to work through August, their traditional summer holiday period.

AWEX Eastern Indicator compared with 27/03/2020

Eastern Indicator

Close: 1287

Change in % -10.75

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

Authentico Index Values

15 Micron

Close: 2369

Change in %: -3.15

16 Micron

Close: 2130

Change in %: -4.05

17 Micron

Close: 1924

Change in %: -4.66

18 Micron

Close: 1726

Change in %: -8.38

19 Micron

Close: 1637

Change in %: -8.39

Authentico Indicator

Close: 1922

Change in %: -5.69

Forecast

AWEX published version 8 of the National Wool Declaration (NWD) last week. Our company is disappointed with the outcome. Rarely has a review gained such attention. This should have highlighted the importance of the NWD and the level of transparency expected by the broader industry right through to retail.  The final document shows little change. NM remains the same and until further scientific research is available on Freeze Branding, they will continue to be sold as NM. This is despite clear commercial focus on ensuring transparency raised throughout the review process. Clarification was sought to improve the accuracy of the CM lots. We are unsure if this will happen. PR has had a name change only to AA. We have woolgrowers who are making best animal welfare decisions, based on scientific research, to include the use of both an anaesthetic and an analgesic but they can’t tell their customers.

We note the high passed in rate. Brokers must advise growers not to offer their wool for sale at the moment if they are not prepared to accept around today’s price levels. We understand and encourage the right to have a reserve price on each lot but the market is under pressure and the price ‘is what it is’ and not helped by large national offerings rostered for sale. It will be interesting to see how many of the 44,000 bales catalogued for next week actually sell. It would make sense to have a smaller offering in order not to unnecessarily spook the market further.

Auction offering – current week

Selling Centres for week 40

Market          Sale          Offered             Sold       Passed In

North                      S 40                     9431                          5278                44.0%

South                     M 40                    22286                       12410               44.3%

West                       F 40                      5996                         3094                48.4%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 41                    T/W                             10280

South                     M 41                    T/W                             25288

West                       F 41                     T/W                              8648

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

It was a much more stable week for wool prices following the uncertainty of the last sale. There was a little movement of price between centres as prices aligned. The encouraging point was more widespread activity from those buyers representing Chinese interests. This lifted the general market overall, including the more average types. It was more noticeable as a feeling of ‘market confidence’ rather than measured in price indicators. The best performing sector was the fine merino types. The 17.0 to 18.5-micron range were those most keenly sought after even in a disappointing selection consisting of longer staple and lower yielding wool types. There are only selected lots of quality fine fleece wool available.

AWEX Eastern Indicator compared with 20/03/2020

Eastern Indicator

Close: 1442

Change in % +0.28

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

Authentico Index Values

15 Micron

Close: 2446

Change in %: -0.57

16 Micron

Close: 2220

Change in %: +0.91

17 Micron

Close: 2018

Change in %: -0.09

18 Micron

Close: 1884

Change in %: -0.32

19 Micron

Close: 1787

Change in %: -1.33

Authentico Indicator

Close: 2038

Change in %: -0.09

Forecast

Wool and livestock auctions remain exempt from the federal government ban on auction houses and sales were allowed to continue. However, with further restrictions expected from state and territory governments in coming days, we could face more roadblocks to a continuing trade of wool. The situation changes daily. The industry is examining all possible alternatives to the open cry auction to allow the exchange of ownership to continue without the necessity to congregate in the auction room. Buyers must maintain access to show floors to inspect samples for this to happen. The sale rooms have been altered to follow ‘social distancing’ rules put in place and regular break intervals have been scheduled along with government guidelines. Regardless of this, our position remains that the health and well-being of our staff, friends and family is the priority and we will act accordingly as we see necessary. Sales have been rescheduled for a Tuesday / Wednesday format allowing Thursday as a ‘contingency’ day should any particular auction be postponed. At the time of writing, Melbourne has been scheduled for a large 2-day sale. Buyers are concerned with the necessary face to face time in the auction room that will result and potentially it could be re-configured into a 3-day format concluding on Thursday.

Auction offering – current week

Selling Centres for week 39

Market          Sale          Offered             Sold       Passed In

North                      S 39                     8350                         7439                10.9%

South                     M 39                    26495                       22866              13.7%

West                       F 39                      8089                         6485               19.8%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 40                    T/W                             10055

South                     M 40                    T/W*                           27370

West                       F 40                     T/W                              8385

*under review

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The fall in wool prices in foreign currency was the extraordinary feature this week. Prices were no doubt cheaper in local currency but the fall in USD and Euro values was significant. The Australian dollar is always less favoured during times of turmoil as investors move to the safer global currencies or gold. The Australian dollar is also influenced by demand for our minerals with iron ore and coal exports likely to be impacted by the pandemic. The Reserve Bank of Australia injected a further stimulus to the economy this week with a cut in the official interest to 0.25%. This sent our dollar plummeting further against the other major currencies.

AWEX Eastern Indicator compared with 13/03/2020

Eastern Indicator

Close: 1438

Change in % -5.46

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

Authentico Index Values

15 Micron

Close: 2460

Change in %: -4.65

16 Micron

Close: 2200

Change in %: -7.13

17 Micron

Close: 2020

Change in %: -6.39

18 Micron

Close: 1890

Change in %: -5.78

19 Micron

Close: 1811

Change in %: -5.68

Authentico Indicator

Close: 2040

Change in %: -6.12

Forecast

As a slight diversion from the regular commentary, we’ve included a nice piece from an Italian psychologist, Francesca Morelli.

“Nature has its way of balancing things when its laws are turned upside down.

In a society based on productivity and consumption, in which we all run 14 hours a day, we are forced to stop, stay home for many days and deal with a time that has slowed down. Do we still know what to do with it?

In a phase in which the education of our children is, necessarily, often delegated to other figures and institutions, the virus closes the schools and forces them to find alternative solutions, putting mums and dads together, rebuilding the family.

In a dimension in which relationships, communication and sociality are virtual and social networks give us the illusion of being together, the virus takes away human contact: nobody touch each other, no more kisses, no more hugs. How much have we taken these gestures and their meanings for granted? How much do we miss them…

In a selfish society where everyone thinks just for himself, the virus sends us a clear message: the only way out is working together, finding the sense of belonging, protecting the community and gives you the feeling of being part of something greater to take care. We all feel more responsible as now, more than ever as we’ve never been depending so much on each other.”

Auction offering – current week

Selling Centres for week 38

Market          Sale          Offered             Sold       Passed In

North                      S 38                     8792                        6927                 21.2%

South                     M 38                    25128                      18627                25.9%

West                       F 38                      8066                        5317                 34.1%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 39                    W/T                              9446

South                     M 39                 T/W/T                          29043

West                       F 39                     W/T                             11385

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The very complicated and confused global situation is affecting all markets and the wool market is not immune. Fortunately, the situation in China seems to be improving for the time being and the major buyers this week were presumably acting with Chinese interests. 25% of the national offering was passed in. The market was better in Melbourne yesterday and while Sydney prices were lower, it must be clarified that it’s almost impossible to compare the offering of this week with the wool that was sold last week in Sydney. Low yielding wool, in plentiful supply, are the lots gaining the least competition.

AWEX Eastern Indicator compared with 06/03/2020

Eastern Indicator

Close: 1521

Change in % -2.62

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

Authentico Index Values

15 Micron

Close: 2580

Change in %: -3.19

16 Micron

Close: 2369

Change in %: -2.47

17 Micron

Close: 2158

Change in %: -3.62

18 Micron

Close: 2006

Change in %: -4.52

19 Micron

Close: 1920

Change in %: -3.27

Authentico Indicator

Close: 2173

Change in %: -3.55

Forecast

Our thoughts are with our entire network of woollen organisations, their families, friends and colleagues around the world as we face an unprecedented challenge to maintain our health and well-being.

Auction offering – current week

Selling Centres for week 37

Market          Sale          Offered             Sold       Passed In

North                      S 37                     8864                        7057                 20.4%

South                     M 37                    23204                      17345                25.2%

West                       F 37                      11511                        8064                 29.9%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 38                    W/T                              9131

South                     M 38                 T/W/T                          29345

West                       F 38                     W/T                             11777

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Wool auctions in Australia resumed this week following an unprecedented cancellation of sales in week 35 due to a cyber-attack on the servers of the dominant software provider to the industry. Many, including our company, have been critical of the industry reliance on this single provider which has continuously maintained old software at a high cost to the users. However, until now, no one has come forward to provide an alternative to a diverse range of businesses throughout the industry. From core lines, to broker and buyer systems, to transport companies and wool dumps, we all rely on interactive software to maintain a stable supply chain. We, like others, will be working towards alternatives as soon as practical and the Wool Testing Authority (AWTA) has already provided an electronic interchange for buyer pre-sale catalogues, broker invoices and shipping delivery orders. The industry cooperation during this difficult period, while criticised for cancelling a sale, has been outstanding.

Wool sales resumed with 62,000 bales offered. It was going to take an enormous effort from the exporters to support this volume and they responded. 47,000 bales were sold for M$81 in value. Growers are still passing wool in, despite global health and general market uncertainty. This will put the wool market in good shape because we remain of the opinion that overall supply is on the low side.

Our focus this week was on securing some best fine wool as we felt that this will be the last opportunity for any reasonable volume until the new season. These types remained generally firm over the week as did all good specification wool certified as NM or CM under the NWD. The NM or CM mulesing status could be considered a good ‘insurance policy’ for growers looking for more stable returns as they fluctuate in price at a much lower rate than the general merino offering. Demand deeper along the supply chain is the key to this.

AWEX Eastern Indicator compared with 21/02/2020

Eastern Indicator

Close: 1562

Change in % -1.20

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

Authentico Index Values

15 Micron

Close: 2665

Change in %: +1.60

16 Micron

Close: 2429

Change in %: +0.12

17 Micron

Close: 2239

Change in %: -0.89

18 Micron

Close: 2101

Change in %: -0.14

19 Micron

Close: 1985

Change in %: +0.35

Authentico Indicator

Close: 2253

Change in %: -0.08

Forecast

Rain is continuing to fall across much of Eastern Australia, particularly in the areas that need it the most. This will surely improve the confidence and mental space of our woolgrower friends. The rain is coming at an ideal time and those in the mixed farming regions will switch the attention to planting crops. Focus on the sheep might take a back step for a month or two. They now have grass and plenty of water. The main concern for the growers will be containing the risk of flystrike. Temperatures remain warm and there is plenty of moisture, the perfect storm for a problematic fly season.

Auction offering – current week

Selling Centres for week 36

Market          Sale          Offered             Sold       Passed In

North                      S 36                    18043                       14825                17.8%

South                     M 36                    29315                       22603               22.9%

West                       F 36                     14808                       9993                 32.5%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 37                    W/T                             8870

South                     M 37                    W/T                            25312

West                       F 37                     W/T                            12498

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The market continues to defy expectations. All types and descriptions sold well again this week and finished at the highest point with a strong market tone all the way to the close in Fremantle. Apart from a large fine wool selection ex New Zealand offered in Melbourne on Tuesday, the general offering was quite poor and ordinary but this wasn’t necessarily a barrier to price or demand. There was no doubt the better quality and specification attracted more consistent demand, but the large volume of tender and higher mid break wool types was also more keenly sought after, particularly 19.0/21.0 micron. These are typical Chinese types.

The week was rounded off with a celebration auction in Melbourne. The National Council of Wool Selling Brokers were celebrating 100 years and approximately 200 lots were offered at a gala auction that was followed by a cocktail party to commemorate the occasion.

AWEX Eastern Indicator compared with 14/02/2020

Eastern Indicator

Close: 1581

Change in % +0.83

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

Authentico Index Values

15 Micron

Close: 2623

Change in %: -2.38

16 Micron

Close: 2426

Change in %: -1.22

17 Micron

Close: 2259

Change in %: +1.26

18 Micron

Close: 2104

Change in %: +0.77

19 Micron

Close: 1982

Change in %: +0.46

Authentico Indicator

Close: 2255

Change in %: +0.09

Forecast

February is traditionally a month that offers the last of any quantity of quality fine wool. We’ve focused our purchase on the Tasmanian selection this year due to better seasonal conditions on the island. We have the last of the designated superfine sales in Sydney next week. We do expect some quality fine and superfine wools to be offered from the New England and hope to take advantage of this final opportunity for our spinner and weaver clients.

Auction offering – current week

Selling Centres for week 34

Market          Sale          Offered             Sold       Passed In

North                      S 34                     7793                 7245                    7.0%

South                     M 34                    18983               16647                  12.3%

West                       F 34                     12242               10715                   12.5%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 35                    W/T                         11188

South                     M 35                    W/T                         21754

West                       F 35                     W/T                         11149

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The focus this week for us was the quality Tasmanian selection sold on Tuesday in Melbourne. Now that the superfine Newcastle sales are no longer, this was the largest quality superfine offering for a single sale day this season. Some were concerned with what effect this might have on the market under the current circumstances. However, once we inspected the quality offering, we were convinced that there would be sufficient interest from Italian weavers. There will be few opportunities for best quality fine wool remaining for those who need to meet production requirements over the next few months.

The market reacted accordingly. It was a positive sale result that reflected the quality on offer. We were pleased to buy some nice wool for our production.

Prices, on average, settled on Wednesday and Thursday but it must have been almost impossible to compare between what was on offer over those days compared with the Tasmanian offering.

AWEX Eastern Indicator compared with 07/02/2020

Eastern Indicator

Close: 1568

Change in % -0.57

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

Authentico Index Values

15 Micron

Close: 2687

Change in %: +0.64

16 Micron

Close: 2456

Change in %: +1.32

17 Micron

Close: 2231

Change in %: -0.89

18 Micron

Close: 2088

Change in %: -2.11

19 Micron

Close: 1973

Change in %: -0.35

Authentico Indicator

Close: 2253

Change in %: -0.53

Forecast

The biggest issue regarding quality and market price at the moment is the mid break. Typically, as a result of the usual spring break in the southern states, we are now seeing a high percentage of tender wool with a break on or around the middle. These types are very difficult to process with a high probability that wool tops will achieve a greater co-efficient of variation (cvh) in length. This is bad for spinning and weaving and certainly has an impact on the general market. In another 6 weeks or so we should start to see that break point move towards the tip.

Auction offering – current week

Selling Centres for week 33

Market          Sale          Offered             Sold       Passed In

North                      S 33                     7922                        6626                 16.4%

South                     M 33                    21474                       17150                 20.1%

West                       F 33                     10780                       7550                  30.0%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 34                     W/T                            8508

South                     M 34                   T/W/T                        22369

West                       F 34                     W/T                            12073

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

It was an exceptionally positive market this week. From the opening lot, it was obvious that there was sufficient prompt demand and prices remained strong from that point on. 18.0 micron and finer were keenly sought after, particularly those with better style and specification. Those more suited to the Italian weaver market. Chinese interests were active and at the close the average Chinese specification types were most affected by the strengthening tone. Wool sold this week would not be due for arrival into China until late March so we would have to assume that wool will be flowing again by then and production back to some normality.

Some of the smaller regional brokers offered support this week by extending the prompt date out one extra week. This is expected to continue for the next few weeks at least. This change is to allow exporters some leniency with cash flow while the situation in China has resulted in a tightening availability of cash. This initiative has been well received by exporters and this gesture of industry cooperation has been well acknowledged and assisted the positive market reaction.

AWEX Eastern Indicator compared with 31/01/2020

Eastern Indicator

Close: 1577

Change in % +1.87

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

Authentico Index Values

15 Micron

Close: 2670

Change in %: +2.53

16 Micron

Close: 2424

Change in %: +1.08

17 Micron

Close: 2251

Change in %: +1.35

18 Micron

Close: 2133

Change in %: +2.99

19 Micron

Close: 1980

Change in %: +1.85

Authentico Indicator

Close: 2265

Change in %: +1.94

Forecast

Our Authentico indicator has reached the highest point since we established it in July 2019. The previous peak was week 02, July 2019 at 2247. The Indicator is now at 2265. The strength can be attributed to the recent form of best fine wool types that have been in strong demand, particularly those with good specification and processing performance. We are of the opinion that there are less better-quality wools finer than 17.5 micron than in the previous few seasons and this is impacting positively on the market price for best fine wool. No doubt the impact of the drought in the New England region has been the greatest contributing factor.

There is a designated Tasmanian feature sale scheduled for next Tuesday. We are aware of some very suitable fine and super fine wool clips that have been kept for this sale. This should encourage strong support from Italian interests. Supply of best fine wool often shows a peak in February before dropping off considerably through until August.

Auction offering – current week

Selling Centres for week 32

Market          Sale          Offered             Sold       Passed In

North                      S 32                     9129                         8007                 12.3%

South                     M 32                    14027                       11945                 14.8%

West                       F 32                      7406                        6075                  18.0%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 33                     W/T                            8054

South                     M 33                   T/W/T                        24164

West                       F 33                     W/T                            10714

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The wool market closed on a much more positive tone after uncertainty on day one due to confusion on trade with China was sparked by the outbreak of the Coronavirus. Large grower withdrawals and passed in rates eventually helped to lead a recovery. There remains enough short term demand to cover the reduced volume eventually sold to market. The better Italian weaving types remained more keenly sought after. Our Authentico indicator closed at 2222, a fall of just 0.9% for the week.

AWEX Eastern Indicator compared with 24/01/2020

Eastern Indicator

Close: 1548

Change in % -1.78

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

Authentico Index Values

15 Micron

Close: 2604

Change in %: +2.84

16 Micron

Close: 2398

Change in %: -0.87

17 Micron

Close: 2221

Change in %: +0.49

18 Micron

Close: 2071

Change in %: -0.43

19 Micron

Close: 1944

Change in %: -1.77

Authentico Indicator

Close: 2222

Change in %: -0.94

Forecast

Global news will be closely monitored over the next few days. Most factory workers in China have been given until the 10th February to return to work. This will ultimately depend on travel restrictions from region to region and potentially personal circumstances and any change to this could spark further disruption. But for now, the wool market has performed very well with a combined effort from both buyers and sellers. Those who need wool in the short term could potentially have some difficulty with the reduced offerings.

Auction offering – current week

Selling Centres for week 31

Market          Sale          Offered             Sold       Passed In

North                      S 31                     8938                       6471                  27.6%

South                     M 31                    17165                      12321                  28.2%

West                       F 31                      7597                        5210                   31.4%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 32                     W/T                           11120

South                     M 32                    W/T                           19823

West                       F 32                     W/T                            9905

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Following last week’s dramatic opening and expectations of a 60,000-bale sale, the result this week was very encouraging. The opening prices in Melbourne settled at values ex Fremantle from the Thursday prior. Sydney prices more or less fell into line with that level and stayed around that basis over both sale days.

The better specification wool continues to be well supported. For our Italian weaver clients, the prices for the best fine wool remains very strong and slightly upward this week. We expect in small supply that these types will remain keenly sought after in the next few months. Superfine types were again in strong demand with 16.0 micron and finer dearer in small supply. Ultrafine wool around 14.0 again attracted good competition for the few bales on offer.

While the medium and broader merino wool was the strongest at the close of the week, it was the finer micron wools that were the most stable.

The AWEX EMI movement is a little more dramatic than reality as it had Sydney values starting from Wednesday 15th. Sydney did not sell on Thursday when the market corrected and AWEX use the most recent values in each centre when calculating the EMI.

AWEX Eastern Indicator compared with 17/01/2020

Eastern Indicator

Close: 1576

Change in % -2.05

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

Authentico Index Values

15 Micron

Close: 2680

Change in %: +2.56

16 Micron

Close: 2419

Change in %: -1.06

17 Micron

Close: 2232

Change in %: +0.31

18 Micron

Close: 2080

Change in %: -0.86

19 Micron

Close: 1979

Change in %: -0.25

Authentico Indicator

Close: 2243

Change in %: -0.09

Forecast

It was a poor decision of the industry to roster 60,000 bales for sale leading into the Chines New Year period. Fortunately, 12% of this quantity was withdrawn prior to sale and growers passed in another 16%. This helped the market to maintain a certain level of composure. It’s important that we keep a flow of wool onto the market that doesn’t encourage unnecessarily speculative decision making. Some small volatility in an open market is healthy, but it’s important that we communicate what is best to encourage more stability than what we’ve experienced recently. The exporters would certainly have had enormous difficulties financing 60,000 bales had they all been sold.

Auction offering – current week

Selling Centres for week 30

Market          Sale          Offered             Sold       Passed In

North                      S 30                     14105                       11973                  15.1%

South                     M 30                    26847                      22760                  15.2%

West                       F 30                      11714                        9540                   18.6%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 31                     W/T                           9700

South                     M 31                    W/T                           21538

West                       F 31                     W/T                            9442

 

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