AUSTRALIAN WEEKLY MARKET REPORT

Comment

The last two weeks have seen a significant change in market sentiment. As we said a few weeks ago, the price then was not a true reflection on the value of wool. It was more a reflection of the circumstances that the global economy is in. Wool production in Australia remains at a 100-year low and prices have been at least 40% lower than the same time last year. Simple supply and demand economics will eventually result in a more positive market outcome. We presume that has been the reason for the quick turnaround. The industry is now smaller than ever and market reactions are expected to be quicker and more volatile. Most had stood and watched while outlook remained uncertain. That has been understandable. Eventually however, the low prices and a fear of missing out has resulted in a rush on business for prompt shipment with the Chinese market dominating.

AWEX Eastern Indicator compared with 18/09/2020

Eastern Indicator

Close: 1036

Change in % +10.57

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

Authentico Index Values

15 Micron

Close: 2320

Change in %:  +6.13

16 Micron

Close: 1977

Change in %: +6.92

17 Micron

Close: 1739

Change in %: +6.23

18 Micron

Close: 1545

Change in %: +6.63

19 Micron

Close: 1350

Change in %: +9.85

Authentico Indicator

Close: 1748

Change in %: +6.78

Forecast

Not a lot has changed with regards to the global retail and consumer confidence situation. We expect some volatility in the short term will continue. It’s not uncommon at this time of the season. However, growers have shown a strong resistance to sell at the low levels and despite the improved market, not all will be prepared to sell yet. This will limit the volume available and the recent low levels are now unlikely to return.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 13                      6720                         6554                  2.5%

South                     M 13                     11384                       11183                   1.8%

West                       F 13                       5156                         4904                   4.9%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 14                        T / W                         8002

South                      M 14                       T / W                         19149

West                        F 14                        T / W                         6088

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Despite the larger weekly offering which included 3,000 bales from New Zealand offered in Melbourne, the market has staged a very encouraging rebound. There has seemed a level of resistance in recent weeks. Growers we offering less wool and prepared to pass their wool in. This has resulted in a squeeze on supply. Prior to the auction, the market was expected to be strong. It was the level of this market strength that caught a few by surprise. Prices continued to strengthen through the sale with indent buying dominating the market as buyers competed to secure volume.

AWEX Eastern Indicator compared with 11/09/2020

Eastern Indicator

Close: 937

Change in % +5.28

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

Authentico Index Values

15 Micron

Close: 2186

Change in %:  +1.49

16 Micron

Close: 1849

Change in %: +5.29

17 Micron

Close: 1637

Change in %: +5.27

18 Micron

Close: 1449

Change in %: +7.09

19 Micron

Close: 1229

Change in %: +5.77

Authentico Indicator

Close: 1637

Change in %: +5.27

Forecast

A slight reduction in volume available next week. It is a designated superfine sale in Sydney but we expect the volume of quality fine wool on offer to remain very limited. It’s hard to imagine the reduction in supply of quality superfine wool in such a short period of time.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 12                      8376                         7870                  6.0%

South                     M 12                    13467                       12682                  5.8%

West                       F 12                      4369                         4150                   5.0%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 13                        T / W                         7652

South                      M 13                      T / W                         12795

West                        F 13                           W                            4583

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

20,000 bales were offered and as previously mentioned, this appears to be a volume that the market can manage with the current level of demand. Prices were positive this week. The sale room activity was clearly much more confident. Melbourne and Fremantle sales were unable to hold the levels reached on Tuesday but overall a very encouraging result. The volume available for sale next week has increased to 33,000 bales and this was likely for the more cautious approach on Wednesday. We haven’t been able to manage this volume in recent months so this will be a good test.

AWEX Eastern Indicator compared with 04/09/2020

Eastern Indicator

Close: 890

Change in % +3.73

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

Authentico Index Values

15 Micron

Close: 2154

Change in %:  -0.04

16 Micron

Close: 1756

Change in %: -0.85

17 Micron

Close: 1555

Change in %: +1.57

18 Micron

Close: 1353

Change in %: +4.32

19 Micron

Close: 1162

Change in %: +1.75

Authentico Indicator

Close: 1555

Change in %: +1.50

Forecast

The better season is impacting on the micron profile of the clip. The corresponding sale last year (2019) had the Sydney and Melbourne merino fleece offering at 17.8 and 19.5 average micron respectively. This week Sydney averaged 18.6 and Melbourne 20.0 micron. For this reason, we are still seeing a positive price spread for micron from 14.0 to 23.0-micron merino.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 11                      4775                         4626                  3.1%

South                     M 11                    10970                       10192                  7.1%

West                       F 11                      3909                         3725                  4.7%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 12                        T / W                         8675

South                      M 12                      T / W                         19525

West                        F 12                           W                             5358

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Only 22,700 bales were sold to the trade this week but still to the value of AUD $23M. As South African and New Zealand merinos are now also coming onto the market (all non mulesed), we are seeing more volume globally each week than what we had available between March and July. The options for supply with the limited demand has increased.

AWEX Eastern Indicator compared with 28/08/2020

Eastern Indicator

Close: 858

Change in % -7.64

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

Authentico Index Values

15 Micron

Close: 2155

Change in %:  -3.06

16 Micron

Close: 1771

Change in %: -6.04

17 Micron

Close: 1531

Change in %: -3.10

18 Micron

Close: 1297

Change in %: -5.47

19 Micron

Close: 1142

Change in %: -6.39

Authentico Indicator

Close: 1532

Change in %: -4.67

Forecast

According to AWEX, the Eastern Market Indicator is now at the lowest level since 2002. With production at the lowest level in 100 years, and declining further, we are absolutely convinced that this level of price is not a true reflection of the value of this precious natural and sustainable fibre.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 10                     7085                         5587                  21.1%

South                     M 10                    12889                       10698                17.0%

West                       F 10                       7181                          5264                 26.7%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 11                            T                             5458

South                      M 11                      T / W                         12351

West                        F 11                           W                             5311

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The market has shown a little more stability this week albeit in a smaller national supply. 18.0 micron and finer were dearer while 18.5 and 19.0 closed around similar levels and the buyer list was a little more evenly spread. There has not been much change in the global supply chain demand, so any week of stability is well received. There was more competition on the better fine wool as the sale progressed, particularly those with non mulesed certification as per the National Wool Declaration. Another positive sign was the dearer carding market. According to AWEX reports, 11.3% of the offering was wool that had been previously offered for sale.

AWEX Eastern Indicator compared with 21/08/2020

Eastern Indicator

Close: 929

Change in % -1.69

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

Authentico Index Values

15 Micron

Close: 2223

Change in %:  +3.35

16 Micron

Close: 1885

Change in %: -2.48

17 Micron

Close: 1580

Change in %: +0.89

18 Micron

Close: 1372

Change in %: 0.0

19 Micron

Close: 1220

Change in %: 0.0

Authentico Indicator

Close: 1607

Change in %: +0.12

Forecast

Woolgrowers are now less likely to offer their wool for sale while prices remain around this level. Brokers are advising clients not to offer wool unless it’s legitimately for sale. This is limiting the flow of wool and will hopefully keep supply in line the limited demand during this period. Next week’s national offering is currently listed as 32,000 bales.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 09                     7562                         6784                  10.3%

South                     M 09                    12926                       11411                   11.7%

West                       F 09                     no sale

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 10                       T / W                        7374

South                      M 10                      T / W                       17224

West                        F 10                       T / W                        8360

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

After last week’s more positive tone, the market has struggled for any clear direction this week. A weakening US Dollar against all major currencies early in the week, left wool dearer in the main user currency. With limited demand, this was a burden too great for the market to be able to sustain. The one positive note has been the strong performance, all things considered, of the better fine wool. There appears less fine wool in general at the moment, surely contributing to this trend, but we now head into the main period for fine wool. On average this week, the Sydney merino fleece catalogue (18.6 micron) and Melbourne (19.7 micron) were about 0.5 micron broader than the corresponding sales in 2019. A better season and supplementary feeding programs during the drought would be responsible for this.

The quality from the New England region, usually the source of much of the best fine wool, will be significantly affected this year. The change in season around February 2020 has resulted in a large percentage of ‘middle break’ wools and the big rains that followed have created an abundance of feed and an increase in grass seed in the wool.

AWEX Eastern Indicator compared with 14/08/2020

Eastern Indicator

Close: 945

Change in % -5.87

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

Authentico Index Values

15 Micron

Close: 2151

Change in %:  +0.05

16 Micron

Close: 1933

Change in %: +1.63

17 Micron

Close: 1566

Change in %: -3.81

18 Micron

Close: 1372

Change in %: -3.38

19 Micron

Close: 1220

Change in %: -4.69

Authentico Indicator

Close: 1605

Change in %: -2.01

Forecast

No sale in Fremantle next week with the annual Wool Week Annual General Meetings to be held on Thursday by zoom tele-conferencing. It will be a smaller national offering.

The Wool Production Forecasting Committee has presented their latest forecast for the 2020/2021 wool season. Wool Production is expected to decline by 1.1% to 280 million kg’s following on from the 5.5% decline in the 2019/2020 season. The 1.1% fall in volume is comprised of a reduction in shorn sheep numbers by 5.5% but an expected increase in average wool cut per head of 2.9% due to the better season.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 08                     8210                         6483                  21.0%

South                     M 08                    17497                       13918                  20.5%

West                       F 08                      5687                         3168                   44.3%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 09                       T / W                        8147

South                      M 09                      T / W                       14199

West                        F 09                      no sale

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The market rebounded nicely this week with a firming trend and more widespread competition at the lower basis. All merino fleece types closed around 1% dearer, with some better descriptions up to 2%. 17.0 micron and finer were most affected. Prices remained within this trend until the close in Fremantle.

AWEX Eastern Indicator compared with 07/08/2020

Eastern Indicator

Close: 1004

Change in % -0.2

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

Authentico Index Values

15 Micron

Close: 2150

Change in %:  +0.14

16 Micron

Close: 1902

Change in %: +2.64

17 Micron

Close: 1628

Change in %: +0.49

18 Micron

Close: 1420

Change in %: +0.28

19 Micron

Close: 1280

Change in %: +1.27

Authentico Indicator

Close: 1638

Change in %: +0.92

Forecast

Sydney and Fremantle auctions will proceed next week as per roster. However, the Victorian Government has ruled that ‘auction houses’ in Melbourne are (now) not considered to be a ‘permitted activity’ during the current level 4 lock-down restrictions. Discussion are ongoing with the Victorian State Government for clarity and final advice on the previous permitted industry status. It is important to note that wool valuing and appraisal of the samples is considered a permitted activity and can continue. The National Auction Selling Committee (NASC), represented equally by buyers and sellers, has ruled that unless ‘permitted activity’ status is granted by close of business Monday, then Melbourne sale 8 will be sold over three days (Tuesday, Wednesday and Thursday) as an online open cry auction via zoom.

The three-day schedule would be implemented to reduce the number of lots / bales to be offered each day, allowing buyers and brokers to adjust to this alternative selling method.

The New Zealand Merino Company will offer 200 lots of crossbred wool at the completion of the Australian offering in Melbourne. Under these circumstances, this is a decision that’s hard to understand.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 07                     8704                         7781                  10.6%

South                     M 07                    16092                      14901                   7.4%

West                       F 07                       5476                        5101                    6.8%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 08                       T / W                        8299

South                      M 08                      T / W                       21097

West                        F 08                          W                            5856

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Sales resumed this week after a three-week midyear recess. Buyer expectations leading into the sale were obviously pessimistic amidst a global crisis that continues to escalate. General comment amongst exporters was that business had come to a standstill over the past two weeks. Clients were likely to be waiting for sales to resume. As a result, most buyers were sitting out of the auction and those that were buying, were doing so cautiously. The weight of supply over demand was simply too great. Exporters have been concerned about the volume of wool that could potentially come on to the market when neither demand nor the finance available to fund the volume are available. Prior to the recess we were managing with sales of around 25,000 bales weekly. The 44,000 offered this week was too much under these extreme circumstances.

AWEX Eastern Indicator compared with 10/07/2020

Eastern Indicator

Close: 1006

Change in % -11.28

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

Authentico Index Values

15 Micron

Close: 2147

Change in %:  -8.75

16 Micron

Close: 1853

Change in %: -9.39

17 Micron

Close: 1620

Change in %: -9.59

18 Micron

Close: 1416

Change in %: -8.58

19 Micron

Close: 1264

Change in %: -9.71

Authentico Indicator

Close: 1623

Change in %: -9.17

Forecast

AWEX report that the fall in percentage terms was the largest in a week since the collapse of the Reserve Price Scheme in 1991. Not a good record but perhaps an overreaction. Some could see an opportunity in this. Next week we have 22% less volume available and considering the current situation, maybe more will be withdrawn prior to sale. Let’s hope that only genuine sellers offer their wool for sale. While we respect the decision of growers to pass their wool in, we need to tell our clients the true picture of what is likely to be available for sale. 30% was passed in this week. If we deduct 30% from the 33,000 bales rostered for sale next week, we could see only 23,000 bales eventually sold in week 7.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 06                     14505                       11002                24.2%

South                     M 06                     20072                      14914                25.7%

West                       F 06                       8187                         3995                 51.2%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 07                       T / W                        9270

South                      M 07                      T / W                       18647

West                        F 07                          W                            5496

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The market was dearer again, following on from the more positive tone last week. The finest and broadest merino types recorded the biggest gains. This would largely be a reflection of supply. There is still limited supply of fine and broad merinos with most of the selection fitting into the 18.5 / 20.0 – micron range. With the buyer activity yesterday focused strongly on securing quantity, the market premiums for quality were limited. All types and descriptions within a particular micron range sold within a narrow range of price. As a result, the low yields and high mid break lots sold with minimal discount.

AWEX Eastern Indicator compared with 03/07/2020

Eastern Indicator

Close: 1134

Change in % +1.61

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

Authentico Index Values

15 Micron

Close: 2353

Change in %:  -0.72

16 Micron

Close: 2045

Change in %: +4.23

17 Micron

Close: 1792

Change in %: +4.13

18 Micron

Close: 1549

Change in %: +0.65

19 Micron

Close: 1400

Change in %: -1.06

Authentico Indicator

Close: 1787

Change in %: +2.17

Forecast

Sales will resume in the first week of August. The positive market finish should help to promote some trading activity during the recess.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 02                     11273                       10645                 5.6%

South                     M 02                    19682                       18465                 6.2%

West                       F 02                      4307                         3970                  7.8%

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.

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The 2020 wool season has opened on a positive tone with more widespread competition on the whole range of types and qualities on offer this week. Chinese interests have continued to dominate but with more support this week from European processors. The competition from China has pushed the lower specification types and resulted in a more positive result overall. The premiums and discounts for quality remains quite small at the moment. Actual price is the most important factor as buyers, traders and processors look for value in what remains a difficult period.

AWEX Eastern Indicator compared with 26/06/2020

Eastern Indicator

Close: 1116

Change in % +0.54

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

Authentico Index Values

15 Micron

Close: 2370

Change in %:  -0.92

16 Micron

Close: 1962

Change in %: -0.66

17 Micron

Close: 1721

Change in %: -1.03

18 Micron

Close: 1539

Change in %: +0.72

19 Micron

Close: 1415

Change in %: +0.07

Authentico Indicator

Close: 1749

Change in %: -0.39

Forecast

It was no doubt a more positive result this week but we wouldn’t yet call it a recovery in the market. We have the one sale remaining prior to the annual 3-week recess and we would expect for this week’s trend to continue next Tuesday and Wednesday. Longer term we remain very positive for wool. The global pandemic has naturally caused considerable damage to retailers and to wider consumer confidence. However, wool is just a very small part of the global textile chain and has outstanding environmental credentials, now a huge focus of the consumer. We are very confident that once demand improves and stock levels are reduced, then price recovery could be swift. Just when this happens is difficult to gauge. Added to the scenario is the fact that local wool production continues to decline.

Auction offering – current week

Market          Sale          Offered             Sold       Passed In

North                      S 01                     9928                         9425                 5.1%

South                     M 01                    13791                        13065                5.3%

West                       F 01                      7102                         6774                  4.6%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 02                        T/W                          11600

South                     M 02                        T/W                          20363

West                        F 02                         W                              4749

 

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