AUSTRALIAN WEEKLY MARKET REPORT

Comment

Most market reports will alert to continued volatility this week but we are of the opinion that the better prepared clips, particularly those with NM or CM status, remain much more stable. We found only a small movement in our Authentico index’s this week, all moving between 0.3 and 1% up or down. There was a larger superfine selection this week and they were the wools that performed the best. The 15.0 to 17.5 micron range was well supported. The AWEX EMI didn’t fare as well, minus 1.7% for the week, but this would have been influenced by a poor performance in the crossbred sector which eased as the sale progressed.

AWEX Eastern Indicator compared with 11/10/2019

Eastern Indicator

Close: 1517

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: 2406

Change in %: -0.91

16 Micron

Close: 2210

Change in %: -1.03

17 Micron

Close: 2060

Change in %: +0.34

18 Micron

Close: 1998

Change in %: +0.30

19 Micron

Close: 1903

Change in %: -0.31

Authentico Indicator

Close: 2090

Change in %: -0.19

Forecast

A smaller sale next week with 33,000 bales rostered for sale including a one-day sale (Wednesday) in Sydney. This is unusual for this time of the season and an indication of the general supply trend.

Auction offering – current week

Selling Centres for week 16

Market          Sale          Offered             Sold       Passed In

North                    S 16                      10143                         9060                 10.7%

South                   M 16                      17625                        15036                 14.7%

West                     F 16                        7588                          6093                 19.7%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 17                         W                              5425

South                      M 17                      W-T                          19371

West                        F 17                       W-T                           8174

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Activity was clearly more focused on the Chinese specification types this week. The largest percentage change was on the tender and more average performing wool types. These are usually the first to react in any market change and typically are the most volatile. Our better types for our Italian weaver clients were generally very firm this week. The better style and strength types are not as exposed to the volatility in the current market. This was the same for the Authentico clips. They didn’t move much, in fact even slightly easier in the 17.5 / 19.0 range as the general market activity was dominated by those seeking wool at a price. It was a very welcome sign though. This activity resulted in one of the more stable overall market trends in recent weeks if not months.

AWEX Eastern Indicator compared with 4/10/2019

Eastern Indicator

Close: 1543

Change in % +2.12

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

Authentico Index Values

15 Micron

Close: 2428

Change in %: +0.37

16 Micron

Close: 2233

Change in %: +1.59

17 Micron

Close: 2053

Change in %: -1.39

18 Micron

Close: 1992

Change in %: -0.69

19 Micron

Close: 1909

Change in %: -1.34

Authentico Indicator

Close: 2094

Change in %: -0.33

Forecast

We have another designated superfine sale in Sydney next week. These sales are becoming less dominated by superfine clips as growers look to sell into a positive market tone as a preference over when they have traditionally offered their wool. Even considering this, we do expect a few more superfine clips. The New England region is suffering from an extended and brutal drought. This is forcing further reductions in sheep numbers added to reduced cut per head, lower lambing percentages and increasing feed costs. The real cost of this on the level of production is still a long way from being realised. These woolgrowers must be commended for their resolve and commitment to wool growing and the welfare of their sheep in such difficult times.

Auction offering – current week

Selling Centres for week 15

Market          Sale          Offered             Sold       Passed In

North                    S 15                       6753                          6352                  5.9%

South                   M 15                      15151                         14238                 6.0%

West                     F 15                        6245                          5425                 13.1%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 16                        W-T                           11113

South                      M 16                       W-T                          21108

West                        F 16                        W-T                           7835

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The soft lead from Fremantle last Thursday ensured the opening of this week’s market was negative. The variation in price from week to week and day to day is compounding the confusion and subsequent difficulty in managing all buying and selling decisions. The level of price is not necessarily under question, it’s the variation and the uncertainty that this movement is creating. This is impacting on the general trading environment from farm through the entire supply chain. It’s a global market and with prices easing in South Africa to levels well below our close on Wednesday, this flowed through to the Australian market on Thursday.

AWEX Eastern Indicator compared with 27/09/2019

Eastern Indicator

Close: 1511

Change in % -6.09

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

Authentico Index Values

15 Micron

Close: 2419

Change in %: -3.74

16 Micron

Close: 2198

Change in %: -5.98

17 Micron

Close: 2082

Change in %: -4.94

18 Micron

Close: 2006

Change in %: -3.04

19 Micron

Close: 1935

Change in %: -3.44

Authentico Indicator

Close: 2101

Change in %: -4.28

Forecast

Some would be critical of the spike in the volume of wool offered nationally this week even if it was just 37,000 bales offered across all three centres. Not large by any measure but still 37% or 10,000 more bales than last week. AWEX auction data to week 14 indicates there has been 27.5% fewer bales of first hand grower wool offered this season compared to last year. AWTA test data to end September indicated a fall in tested volume of 14% compared to end September 2018 and yet the Australian Wool Production Forecast Committee met in August and predicted a fall of just 5% for the full year. Some widely variable figures.

We would have preferred a smaller sale this week once we understood the market was to open lower but brokers lot the wool for sale and provide volumes in the middle of the week prior, when the market was positive. Also, we can’t decline the grower the opportunity to offer their wool for sale and the auction system is at least very transparent in terms of what is available. Some growers are in the middle of the worst drought on record, are desperate for cash and prices are still considered acceptable if only the wild fluctuations would settle. We must understand growers have the right to choose when to sell their wool, like buyers have the right to choose if they buy. It’s just a very unfortunate and difficult period we need to work through compounded by global economic uncertainty.

Auction offering – current week

Selling Centres for week 14

Market          Sale          Offered             Sold       Passed In

North                    S 14                       9512                          6992                 26.5%

South                   M 14                      16737                        11010                 34.2%

West                     F 14                        7299                          4321                 40.8%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 15                        W-T                            8341

South                      M 15                       W-T                           18085

West                        F 15                        W-T                            7748

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

A small national volume and mixed reports coming from China added to more confusion leading into the sale. Prices were expected to open strongly and they did. Typically though, with supply as limited as it is, the market is reacting with more volatility than we would have expected in the past. This eventually added more confusion and prices settled in Fremantle on Thursday. The Fremantle and Melbourne auction centres don’t have the volume of typical Italian weaver types and we’re finding that these types are not moving with such volatility. Interest and demand for wool types that meet Authentico standards are attracting more consistent competition and these types were least affected. Of particular note was the best 15.5/16.0 micron range of Authentico types. Those with good style and specification attracted strong competition from a range of Italian interests.

AWEX Eastern Indicator compared with 20/09/2019

Eastern Indicator

Close: 1609

Change in % +4.34

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

Authentico Index Values

15 Micron

Close: 2513

Change in %: +1.17

16 Micron

Close: 2338

Change in %: +4.42

17 Micron

Close: 2184

Change in %: +2.13

18 Micron

Close: 2069

Change in %: +1.27

19 Micron

Close: 2004

Change in %: +3.73

Authentico Indicator

Close: 2195

Change in %: +2.38

Forecast

With prices in Fremantle settling below the close of Sydney and Melbourne and an increase to 40,000 bales next week, we could expect a softer opening tone. Growers will likely exercise their option to reserve their wool at a minimum price and if bidding doesn’t get to those levels, they are likely to keep it for another week. This is what they’ve done quite well in recent weeks. Our policy to maintain a steady and sensible approach to buying and selling will continue. None of us are able to accurately predict the top or bottom of this market with such volatility.

Auction offering – current week

Selling Centres for week 13

Market          Sale          Offered             Sold       Passed In

North                    S 13                       7184                          6983                  2.8%

South                   M 13                      13525                        12979                 4.0%

West                     F 13                        6749                          5422                 19.7%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 14                        W-T                           10464

South                      M 14                       W-T                           21758

West                        F 14                        W-T                            8777

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Finally, a bit of stability in the market. Prices settled on Wednesday a little above the close in Fremantle from the previous week. That basis was the most recent to go on and the one most chose to compare against considering the extreme volatility of last week. With many local traders in China for the Nanjing Wool Conference, it was pleasing to see a small improvement from that basis on Thursday. All in all it must be considered a very positive result.

AWEX Eastern Indicator compared with 13/09/2019

Eastern Indicator

Close: 1542

Change in % +0.46

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

Authentico Index Values

15 Micron

Close: 2484

Change in %: +1.72

16 Micron

Close: 2239

Change in %: +0.49

17 Micron

Close: 2139

Change in %: +2.59

18 Micron

Close: 2043

Change in %: +0.89

19 Micron

Close: 1932

Change in %: -0.51

Authentico Indicator

Close: 2144

Change in %: +1.28

Forecast

Sale volumes remain small and while we acknowledged some wool was passed in and withdrawn in recent weeks, it’s not coming back onto the market in any great numbers. Some were of the opinion that this factor might be a negative for the market but as yet it’s not impacting on sale volumes nor the market. There will be less than 30,000 bales offered for sale next week. The relative stability around these levels is encouraging more interest from our clients. The market from October is generally quite positive historically and we see no reason for this not to continue this season.

Auction offering – current week

Selling Centres for week 12

Market          Sale          Offered             Sold       Passed In

North                    S 12                       8668                          7973                  8.0%

South                   M 12                      15027                         13233                11.9%

West                     F 12                        6440                          5801                  9.9%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 13                        W-T                            7559

South                      M 13                       W-T                           14904

West                        F 13                        W-T                            6827

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

It was an extraordinary market reversal this week with all prices advancing significantly. It’s difficult to understand the mechanisms that result in such activity. Exporters and processors have been unable trade greasy wool or wool tops for a few weeks. This has resulted in a free fall in market prices. Confusion has been exacerbated by the general global market uncertainty, international trade negotiations, or lack thereof, and prices coming from what was perceived as an historically high level. But we have remained confident in the fact the consumers had not abandoned wool to the extent that you would believe by following the market spiral downwards. What was needed was some confidence at a new level and for growers to reserve their right to withdraw wool from sale or to pass it in when offered a price below their reserve. This is what they did. Eventually the two lines crossed and exporters were unsure of short-term supply amidst more general enquiry across the global wool supply chain. Traders opted not to offer forward and from there it had to react. Even if a customer wanted wool, no one was prepared to sell it. Supply was too limited. Now there are few exporters and traders with any greasy wool stock who are prepared to offer forward. This has resulted in Chinese Topmakers chasing wool at Thursday’s auction ‘at best’ and without giving instruction on price. The perfect storm!

AWEX Eastern Indicator compared with 06/09/2019

Eastern Indicator

Close: 1535

Change in % +12.45

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

Authentico Index Values

15 Micron

Close: 2442

Change in %: -0.12

16 Micron

Close: 2228

Change in %: +0.54

17 Micron

Close: 2085

Change in %: +1.46

18 Micron

Close: 2025

Change in %: +3.69

19 Micron

Close: 1942

Change in %: +12.45

Authentico Indicator

Close: 2117

Change in %: +2.62

Forecast

The Schneider Authentico contracts would have been a good option for growers who have offered wool in the first few months of this season. They are designed to reduce the volatility in price by utilising six- or twelve-month averages as the base and adding premiums for processing and style quality. The perfect method to insure against selling or buying at the extremes seen in recent weeks. They are restricted to clips certified under the Authentico quality scheme who no longer mules and target fine and superfine wool clips only. We think that the critical level of supply will ensure continued market volatility in the short term. It’s hard to know when to buy or sell so all options should be considered. We’ve chosen to follow the market each week, albeit cautiously. There is no better way during these volatile and uncertain times.

Auction offering – current week

Selling Centres for week 11

Market          Sale          Offered             Sold       Passed In

North                    S 11                       5191                           4777                  8.0%

South                   M 11                      9672                           9331                  3.5%

West                     F 11                       4330                          4084                  5.7%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 12                        W-T                            8885

South                      M 12                       W-T                           15802

West                        F 12                        W-T                            6420

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Finally, a more positive market tone. Client bids under the market were being rejected by the exporters and processors leading into the auction as supply tightened further. Growers have shown a reluctance to accept prices in a dramatically falling market leaving less than 20,000 bales sold for the week. This led to a more cautious trading approach from the large exporters. There was enough positive sentiment around prior to the sale. Most exporters of the belief that prices, if not at the bottom, were very close. This was on the basis of more interest and bids closer to spot market prices leading into the sale.

The selection of fine wool was better this week and this has helped the overall averages, including our Authentico Index’s. There was more interest from the Italian sector on 18.0 micron and finer with better style and specification types attracting strong competition. Of particular strength again this week was the 16.0-micron range. Many of the better New England region clips in this range are also NM and this is obviously attracting more attention from Europe. This is encouraging but worth noting that the current 16.0 micron levels are approximately 40% lower than end August 2018. The Authentico Indicator was 1.68% higher this week, primarily as a result of the better 16.0 micron result. 16.0 is not included in the AWEX EMI.

AWEX Eastern Indicator compared with 30/08/2019

Eastern Indicator

Close: 1365

Change in % -0.73

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

Authentico Index Values

15 Micron

Close: 2445

Change in %: +0.58

16 Micron

Close: 2216

Change in %: +4.63

17 Micron

Close: 2055

Change in %: +2.39

18 Micron

Close: 1953

Change in %: +1.09

19 Micron

Close: 1727

Change in %: -4.27

Authentico Indicator

Close: 2063

Change in %: +1.68

Forecast

28,000 bales rostered for sale next week. There is grower held bales in store waiting for a clearer market trend. Despite this, the Sydney sale is restricted to a one-day sale on Wednesday. With the benchmark AWEX EMI improving in US currency this week, we hope that this gives the market some confidence to return at these reduced levels. Ultimately, it’s a matter of confidence. No doubt demand is soft but consumption of wool will continue.

Auction offering – current week

Selling Centres for week 10

Market          Sale          Offered             Sold       Passed In

North                    S 10                      7039                         5990                 14.9%

South                   M 10                     11619                        10529                  9.4%

West                     F 10                       3036                         2675                  11.9%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 11                        W                                6289

South                      M 11                       W-T                           16237

West                        F 11                        W-T                             5397

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Another extraordinary market reaction this week. While the new level of price is concerning enough, the direction it’s taken to arrive at this point has been extreme. Surely the appetite for wool has not changed that much in such a short period. Confusion is wide spread and confidence within the market is low and not until we get to a level that extracts more widespread interest will we see a reaction. Reports are that there is business but while the market falls, the next level is always lower. How long can this last? All markets react strongly after up and down corrections and we expect this to be no different. But when and from what level? Industry participants with some necessity for wool will be monitoring the next move very carefully.

Crossbred types appear in favour and only minor changes were noted from 26.0 / 32.0 micron.

AWEX Eastern Indicator compared with 23/08/2019

Eastern Indicator

Close: 1375

Change in % -8.15

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

Authentico Index Values

15 Micron

Close: 2431

Change in %: +0.45

16 Micron

Close: 2118

Change in %: -1.44

17 Micron

Close: 2007

Change in %: -3.97

18 Micron

Close: 1932

Change in %: -4.92

19 Micron

Close: 1804

Change in %: -5.85

Authentico Indicator

Close: 2029

Change in %: -3.38

Forecast

We’ll try to focus on the positives from a negative sale week. 15.0/16.0 micron were much less affected than the broader Chinese qualities. This was a superfine sale in Sydney and the result was positive. Of particular note was the market for non mulesed types. Our own Authentico Index was only 3.38% down for the week compared to an AWEX EMI which fell 8.15%. Our index is influenced by the performance of the finer micron (15.0 and 16.0) types that are important to our clients. The AWEX EMI includes wool down to 16.5 micron average only. We hope that this new Indicator and our Authentico indexes are of value to the industry.

Auction offering – current week

Selling Centres for week 09

Market          Sale          Offered             Sold       Passed In

North                    S 09                      6951                         4801                 30.9%

South                   M 09                     11453                        8200                28.4%

West                     F 09                       6891                         3854                44.1%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 10                        W-T                           8885

South                      M 10                       W-T                           15718

West                        F 10                        W                               4458

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Some interest late last week, albeit below the closing level, was enough to stimulate more widespread buyer support at the new level. It was a significantly better market tone in the sale room. Prices did however ease further as buyers search for a level in which they can sell and global market and political uncertainties ensure a lack of overall confidence. Still, it was a much better result than the past two weeks.

AWEX Eastern Indicator compared with 16/08/2019

Eastern Indicator

Close: 1497

Change in % -1.06%

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

Authentico Index Values

15 Micron

Close: 2420

Change in %: -0.08

16 Micron

Close: 2149

Change in %: -2.8

17 Micron

Close: 2090

Change in %: -2.9

18 Micron

Close: 2032

Change in %: -2.96

19 Micron

Close: 1916

Change in %: -4.49

Authentico Indicator

Close: 2100

Change in %: -2.28

Forecast

We have today published for the first time our new Authentico Index values and the Authentico Indicator. We’re very pleased to provide the first index values based on a sustainable quality scheme. We’d like to thank our committed grower supporters for joining the Authentico program and we’re positive that this initiative will give our clients and our grower partners some meaningful values and an indicator that matches market and consumer expectations.

Auction offering – current week

Selling Centres for week 08

Market          Sale          Offered             Sold       Passed In

North                    S 08                      9430                        8096                 14.1%

South                   M 08                     17062                       14120                 17.2%

West                     F 08                       no sale

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 09                        W-T                           8158

South                      M 09                       W-T                           14778

West                        F 09                        W-T                           10110

 

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

AUSTRALIAN WEEKLY MARKET REPORT

Comment

Further instability on global economic issues has eroded confidence from the wool market that has until now recorded one of the more positive periods in the last few years in our history. Since the peak of the EMI exactly one year ago (16/08/18), the benchmark indicator has fallen 28.5%. In USD terms the peak was in June 2018 and it’s now 33.6% lower. The fall in the EMI this week alone was just under 10%. In comparison our pool of non mulesed types indicates that these wools were again much less affected and closed around 2.9% cheaper on average. 15.0/16.0 micron and the better 17.0/18.5 types were again well supported by a different bench of buyers.

AWEX Eastern Indicator compared with 09/08/2019

Eastern Indicator

Close: 1513

Change in % -9.7%

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

Schneider Indicators

The Schneider Indicators are currently being reviewed to provide index values that will better reflect our evolving business. Details and launch in coming weeks. Our apologies to those who rely on these values for market information.

15 Micron

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16 Micron

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17 Micron

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18 Micron

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19 Micron

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Forecast

A fall of this magnitude is significant and must raise further confusion amongst our customers. We can’t underestimate the level of pessimism coming from the Chinese market. This will however, create opportunities for others and considering the correction in price is as great since the peak as we mentioned earlier in this report, this new level of price will encourage some serious considerations. Little has changed fundamentally. We remain very confident for wool as a textile fibre and supply will continue to fall in Australia with the impact of the drought continuing to drive production downwards. Superfine wool clips are coming in earlier than usual and this will impact on supply later this calendar year.

Auction offering – current week

Selling Centres for week 07

Market          Sale          Offered             Sold       Passed In

North                    S 07                      13052                       8548                34.5%

South                   M 07                      15442                       10797              30.1%

West                     F 07                        6929                         3698              46.6%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 08                        T-W                           11194

South                      M 08                       T-W                           22502

West                        F 08                        no sale

 

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