AUSTRALIAN WEEKLY MARKET REPORT

Comment

When we have exceptionally small national quantities, the market is often neglected and this was the case this week. Not only were the volumes small (19,000 bales offered), the selection was again very poor. A large percentage of very low yielding, drought affected types. These wools are not only inferior in quality, they are more expensive to transport with less clean weight per bale and processing tariffs on lower yielding types are higher. The range of price between microns is now small with little discount down to 21.5 micron. This should help to limit further downside on the fine types and it was more noticeable on Thursday that the level of interest had improved at this lower basis. This however has unfortunately been the trend in recent weeks. The opening day lower, the second day firm.

AWEX Eastern Indicator compared with 14/06/2019

Eastern Indicator

Close: 1766

Change in % -3.13%

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Schneider Indicators compared with 14/06/2019

↓15 Micron

Close: 2,468

Change in %: -1.05%

↓16 Micron

Close: 2,206

Change in %: -2.13%

↓17 Micron

Close:  2,169

Change in %: -0.32%

↓18 Micron

Close: 2,063

Change in %: -2.62%

↑19 Micron

Close: 2,096

Change in %: +1.34%

 

Each indicator is expressed by a number representing a market quotation for a selected range of types and is not a price expression and it’s not influenced by currency fluctuations.

Wool indicators are anyway based on Australian Dollar.

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Forecast

The wool prices in USD must now appear much more attractive. The AWEX EMI in USD terms is now at the lowest level since October 2017. We know how limited supply will be in the next season, the lowest in almost 100 years. All we need is for a little more confidence to return to the market. Buyers and traders are also reluctant to sell too far forward with concerns over supply and cash flow must be restricting many participants. Of increasing concern to Australian wool producers must be the appetite of our clients to source a lot more merino wool from other country origins now when compared to a few years ago. There is no doubt that this is a mulesing issue but we are also seeing a push from global brands on environmental standards and accountability.

Auction offering – current week

Selling Centres for week

Market          Sale          Offered             Sold       Passed In

North                    S 51                      8098                          7123                 12.0%

South                   M 51                     10974                          9511                 13.3%

West                     F 51                      no sale

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 52                        W-T                          8073

South                      M 52                       W-T                         15573

West                        F 52                        W-T                          7226

 

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