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.