Week 07: 16/08/2018
The AWEX EMI increased 126c to close the week at 2116c at auction sales in Australia. 36,302 bales went on offer in Sydney Melbourne and Fremantle with 98.5% of the offering cleared as emotive buying took over in the sale rooms. Wednesdays opened with a rise of 99c for the EMI taking it to 2089c, the largest single day increase since 2002 and a new record surpassing the previous EMI record by 16c. Thursday’s market continued to rise, (at a slightly slower pace) with the end result a 27c increase taking the EMI to 2116c. This 126c rise was also the largest weekly rise since 2002.

Merino fleece saw all of the MPG’s skyrocket to new records levels with the 17-19MPG’s adding 170-205c for the week. All other merino MPG’s rose between 130-150c. Skirtings followed the same as the fleece increasing between 50c – 100c. Cardings also achieved new record price levels posting rises between 42-81c across the three centres. Crossbreds recovered from last week’s lacklustre performance posting solid rises of 60-90c for the week.

This week’s market conditions were aided by a favourable currency exchange, however in my opinion these extreme price movements were all about exporters meeting business inquiry from China, India and Europe. What would normally be reported as panic buying appeared to be more about just buying than employing desperate procurement measures. Despite the eastern states drought situation worsening the current selection was in relative good shape from a processors point of view. However, as NSW approaches spring, well behind historical levels of rainfall, pasture and crop growth, and with feed supplies already exhausted from the past 5 months of extended dry conditions the impact on sheep numbers, cut per head and shearing intervals have the pipeline second guessing wool production for the upcoming season and beyond. The release of the National Wool Production Forecast is released early next week ahead of Wool.

Michael Avery (Southern Aurora Wool) reports the reaction in the Forward Market has been less dramatic as both buyers and sellers alike trying to find fair value into the summer and beyond. Spring levels rose shapely with 21.0 trading at 2280 for late September. Buyers are pricing in significant risk for the New Year with processor and end user concerns about the ability to pass on the latest surge in prices foremost in their minds. Unprecedented levels are being bid into 2019 but at discounts to cash. 19.0 microns traded at 2225 for January and 2105 for November. We expect a similar pattern to continue next week with both
exporters and growers both looking for some price certainty into the future. We anticipate only moderate volume under the current volatility.

29,813 bales will be offered in Sydney and Melbourne on Tuesday and Wednesday next week to allow the Annual Wool Week events get under way on Thursday. There will be the official launch of AWEX WoolClip electronic specifications App as well as an update of the AWI WoolQ. I imagine this will be a positive event. In the meantime the main challenge is staying positive through this testing time and ensuring you have a plan to get through. Moses & Son Livestock consultancy service is available for your advisory needs through the drought. Despite the Bitter Sweet environment- It’s a great time to be in sheep and wool.         ~Marty Moses

Market Report S07.18 Weekly Market Report 07 Premium & Discount – North 07 OTH-Sheep-NSW-14-Aug-2018