Weekly Wool Prices

Week Ending April 27 (Week 43)

30 April 2012

The AWEX Regional Indicators finished 0.2% lower, on average, at sales in Sydney, Melbourne and Fremantle this week when the US exchange rate rose by 0.3%. The sales were held on Tuesday and Thursday because of the Public Holiday for Anzac Day on Wednesday.

It was a much steadier market this week, after the falls over the last four sales. It was also a smaller sale than the 49,400 and 55,600 bales offered in the last two sales. Tuesday’s sales saw small changes in the Merino MPGs in the North and the South and a mixture of direction of movement in the West. A similar pattern emerged on Thursday, except in the South where there was a very slight easing.

Crossbred types continued to do well; and again had a slightly better week than the Merino wools.

The quality of the offering continues to be down as the season moves well into autumn. There is the additional problem of faults caused by the heavy rain in late summer/early autumn, particularly among skirtings.

FNF wools were in good demand, whereas the higher VM and poorer types were discounted.

In looking at comparisons with the same week last year, there was no sale in Week 43 last year as it was the week of the Easter break. The comparisons presented below are confined to the season averages to date for the EMI and the WMI.

The season average EMI remains at 1222¢, which is 140¢ higher than the season average at the end of Week 43 last year; and the Western Market Indicator average remains at 1221¢, 163¢ higher than at the same time last year.

In other countries, the Cape Wools Indicator was down by 0.1% last week’s sale. The Rand to the US exchange rate was down by 0.7%. In New Zealand, the various coarse crossbred indicators were down by 1 to 3%.

Among other fibres, May futures for cotton were up by 0.8% from last week to close at 90.79¢ on Friday.

RegionLast SaleDay-to-Day Changes (Week 42)Sale-to-Sale ChangeClosing IndicatorSale-to-Sale Changes
WeekIndicatorTuesdayWednesdayThursdayUS ¢Euro ¢
Eastern421165+1No Sale-10 (0.0%)1165+3-5
Northern4211940No Sale00 (0.0%)1194+3-6
Southern421144+3No Sale-2+1 (+0.1%)1145+5-4
Western421183-3No Sale-5-8 (-0.7%)1175-5-12

In a much smaller sale, 38,103 bales were on offer, compared with 55,594 bales last week. 11.2% were passed in, comprised of 8.1% in Sydney, 9.9% in Melbourne and 18.5% in Fremantle. Pass-in rates for Merino fleece and skirtings were 9.7% and 18.3%, respectively. 33,853 bales were cleared to the trade.

The year-to-date offering is 46,326 bales less (-2.8%) than at the end of the same week last year (see table below). This is expected to improve slightly to -2.4% over the next three sales if the current estimates for that period remain relatively unchanged.

The US exchange rate has been influenced by two significant, but opposite, effects this week. Firstly, all financial analysts are tipping that the Reserve Bank will lower the official cash rate when it meets on Tuesday, following the low CPI data announced on Tuesday. This led to the fall in the exchange rate on Tuesday. The rise in the exchange rate on Thursday was attributed to some good company performances in the United States and an indication from the US Reserve that there may be further quantitative easing (putting money into the economy).

China announced that the Yuan will be fixed at 6.28 Yuan. This was described as a record low level.

Exchange Rates
(Reserve Bank)
Last SaleDay-to-Day ChangesSale-to-Sale
Change
Closing ValueSeason Min & Max
MondayTuesdayWednesdayThursdayMinMax
United States 103.54-0.15-0.77 +1.19+0.27 (+0.3%)103.8195.00110.55
Euro78.95-0.56-0.39 +0.50-0.45 (-0.6%)78.5071.5082.27

The week-on-week changes in the Merino average MPGs were relatively small in either direction this week.

There is no data for the comparison with the same week last year as it was the week of the Easter break in 2011.

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 ¢ +6+4+5+2+3-30+1-1+7+7
Change % +0.4%+0.3%+0.3%+0.1%+0.2%-0.2%0.0%+0.1%-0.1%+0.6%+0.6%
Since Start of the Season:
Change ¢ -747-661-519-397-286-208-154-125-116-30+70
Change % -31.7%-30.3%-26.3%-22.2%-17.2%-13.3%-10.4%-8.7%-8.4%-2.4%+6.4%
Since Same Week Last Year:
Change ¢            
Change %            

The skirtings offering continues to be quite mixed, with a significant number of lower types such discoloured, cotty or with high VM wool again on offer. Better types were in good demand, but the poorer types were all discounted. Skirting types again had a higher pass-in rate (18.3%) than fleece types (9.7%)

Crossbreds continued their good run; and again had a better week than Merino types.

Oddments had a mixed week, but generally moved downwards.

Sale-to-Sale Changes in Other Average AWEX Price Guides
Micron25.026.028.030.032.0MC#
Since Last Sale:
Change ¢+25+26+1+6+6-14
Change %+2.6% +3.1%+0.2%+1.0%-1.2%-1.9%
Since Start of the Season:
Change ¢+106-4-31-32-47-94
Change %+11.8% -0.5%-4.6%-5.2%-8.3%-11.7%
Since Same Week Last Year:
Change ¢      
Change %      

# Average Merino Cardings Price Guide

Buyers for China were dominant this week, followed by strong support buyers for Europe, India 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
February 2012July - February This SeasonJuly - February Last Season
China73.6%74.4%74.6%-10.9%
India5.1%6.8%7.1%-14.9%
Italy3.8%5.7%5.6%-8.3%
Czech Republic3.8%3.6%4.0%-18.3%
Taiwan1.2%2.2%2.5%-7.8%
Korea1.3%1.6%1.2%+20.6%
Malaysia0.7%1.1%0.7%+56.9%
Thailand #0.0%0.3%1.2%-77.0%
# Affected by Bangkok floods in October 2011 Change all Countries-10.7%

Sales will be held in Sydney, Melbourne and Fremantle next week, when 45,132 bales are currently rostered for sale. Present estimates for the following two sales (Weeks 45 and 46) are 40,260 and 42,300 bales, respectively; an increase of 2.9% over the three sale period when compared with last year.

In South African sales, the Cape Wools Indicator was down by 0.1% since last week against a 0.7% appreciation of the Rand against the US Dollar and a 0.1% depreciation against the Euro. 6,796 bales were on offer.