Weekly Wool Prices

Week Ending 16 Mar 2012 (week 37)

19 March 2012

The AWEX Regional Indicators finished 1.9% higher, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate fell by 1.3%.

The market got away to good start in a smaller sale on Wednesday; following on from the strong demand on Thursday of the previous week. The EMI rose by 10¢ in Australian currency and by 12¢ in US currency. The greatest percentage changes in the AWEX Micron Price Guides were from 18.5 to 20 microns. Sellers responded to the good market with a very low pass-in rate of 5.1%. The larger increase (+31¢) in the Western Indicator on Wednesday included a “catch-up” component, as there was no sale in Fremantle on the Thursday of the previous week.

It was a more mixed day on Thursday with the EMI up, but there was a softer finish in the West, where the Indicator was down by 2¢, due mainly to falls of 20¢ and 21¢ in the AWEX 18.0 and 18.5 MPGs. Trade reports indicate that larger lots (which were present in significant numbers in the South) came under pressure on Thursday.

The closing EMI at 1239¢ is 131¢ less than in the same week alast year. But, the season average of 1227¢ is 190¢ higher than the season average at the end of Week 37 last year.

In other countries, it was a good week in South Africa where the Cape Wools Indicator was up by 2.3% and the US exchange rate appreciated by 1.1%. Wool Services International reported that most crossbred prices in New Zealand were up by around 1%, or a little more; and that currency was down by around 0.5%.

In other fibres, May futures for cotton in the United States were down by 1.5% to 87.48 US¢ / pound since last Friday.

RegionLast SaleDay-to-Day Changes (Week 37)Sale-to-Sale ChangeClosing IndicatorSale-to-Sale Changes
WeekIndicatorTuesdayWednesdayThursdayUS ¢Euro ¢
Eastern361216No Sale+18+5+23 (+1.9%)1239+8+16
Northern361245No Sale+18+7+25 (+2.0%)1270+9+18
Southern361196No Sale+18+2+20 (+1.7%)1216+5+13
Western361240No Sale+31-6+25 (+2.0%)1265+9+18

41,560 bales were on offer, compared with 49,723 bales last week. 6.2% were passed in, comprised of 5.1% in Sydney, 5.2% in Melbourne and 9.2% in Fremantle. Pass-in rates for Merino fleece and skirtings were 5.1% and 7.3%, respectively.

38,989 bales were cleared to the trade.

The year-to-date offering is 41,557 bales less (-2.9%) than at the end of the same week last year (see table below). The year-to-year difference is likely to slip further in the short term as current estimates for the next three sales are all down following the heavy rain and floods in New South Wales and Victoria in March.

The US exchange rate (RBA) eased again in response to a variety of economic news during the week. Financial analysts attributed the early fall in the exchange rate to poorer trade data out of China and a strengthening of the US Dollar in response to better employment data in the United States. This was followed by reports of weaker consumer confidence in Australia on Wednesday.

Exchange Rates
(Reserve Bank)
Last SaleDay-to-Day ChangesSale-to-Sale
Change
Closing ValueSeason Min & Max
MondayTuesdayWednesdayThursdayMinMax
United States 106.02-0.690.00+0.14-0.80-1.35 (-1.3%)104.6795.00110.55
Euro80.49-0.04-0.36+0.61-0.41-0.20 (-0.2%)80.2971.5082.27

There were good rises in the AWEX MPGs across all Merino Micron ranges and types on Wednesday; and again for 17.0 and 17.5 microns in Sydney on Thursday. There were similar week-to-week changes across all micron ranges other than at 23 and 24 microns.

The fall in the average 24 MPG was mostly due to a fall of 21¢ in the South on Thursday.

Sale-to-Sale Changes in Average AWEX Merino Micron Price Guides (MPGs)
Micron16.517.017.518.018.519.019.520.021.022.023.024.0
Since Last Sale:
Change ¢ +39+38+31+37+26+31+32+34+31+3-21
Change % +2.3%+2.4%+2.0%+2.5%+1.8%+2.2%+2.3%+2.5%+2.4%+0.2%-1.7%
Since Start of the Season:
Change ¢ -618-538-398-271-174-110-67-34-40+3+95
Change % -26.3%-24.7%-20.2%-15.2%-10.5%-7.0%-4.5%-2.4%-2.9%+0.2%+8.7%
Since Same Week Last Year:
Change ¢ -740-689-597-420-204-47+57+119+89+50+91
Change %  -29.9%-29.5%-27.5%-21.7%-12.1%-3.1%+4.2%+9.3%+7.1%+4.1%+8.3%

Demand for skirtings was very good in all centres on Wednesday; and again on Thursday when they generally outperformed the fleece types.

It was a good week for crossbred wools, whose MPGs lifted on both Wednesday and Thursday. The week-to-week percentage changes in their average AWEX MPGs were similar to those for Merino types.

It was a mixed week for oddments with price movements in both directions, but with a mostly downwards trend.

Sale-to-Sale Changes in Other Average AWEX Price Guides
Micron25.026.028.030.032.0MC#
Since Last Sale:
Change ¢  +20+17-14+9-7
Change %  +2.5%+2.7%+2.5%+1.8%-0.9%
Since Start of the Season:
Change ¢  -36-32-35-53-76
Change %  -4.1%-4.7%-5.7%-9.4%-9.4%
Since Same Week Last Year:
Change ¢  -62-74-87-119-76
Change %  -6.9%-10.2%-13.0%-18.9%-9.4%

Buyers for China were dominant this week, followed by buyers for India, Europe and Taiwan.

Current export data and the percentage changes from last year for the top five export destinations and three other key destinations follow.

Country% Share of Australia’s Wool Exports by Weight of Wool ShippedYear-on-Year
% Change in
Wool Exports
  January
2012
July - January
This Season
July – January
Last Season
China79.5%73.6%73.5%-8.8%
India4.2%7.1%7.5%-13.4%
Italy5.2%6.1%5.9%-5.8%
Czech Republic2.2%3.6%4.0%-18.5%
Taiwan2.1%2.8%2.4%+4.9%
Korea1.9%1.6%1.2%+20.8%
Malaysia1.6%1.3%0.7%+58.1%
Thailand #0.0%0.4%1.3%-74.0%
# Affected by Bangkok floods in October 2011 Change all Countries-8.9%

Sales will be held in Sydney, Melbourne and Fremantle next week, when 43,371 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 39 and 40) are 40,020 and 44,500 bales, respectively; a decrease of 11.0% over the three sale period when compared with last year.

In South African sales, the Cape Wools Indicator was up by 2.3% since last week against a 1.1% appreciation of the Rand against the US Dollar and a 1.7% appreciation against the Euro. 7,274 bales were on offer.

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© AWIS 2012 (for permission to reprint, in part or whole, please contact AWIS)