Month: February 2017
47,000 bales were rostered for sale this week, with Melbourne selling in isolation on Tuesday, then all three centers in action Wednesday and Thursday. The merinos continue to push to new highs, while basically unchanged on Tuesday they firmed between 5 and 20 cents on Wednesday. There was also some positivity in the xbred sector for the first time in a long while with 28’s firming over 20 cents in early trade. The most encouraging thing is the xbreds managed gains despite the strong AUD. At the time of writing this report the AUD is sitting a shade over 77 us cents which almost equals it’s highest point in 3 months, in actual fact the strongest it’s been in the last year is 78 cents for a fleeting moment. You may recall we spoke several times about the 1000 usc ceiling for the EMI between June of last year and Christmas, well now it’s at 1115 and in a steep upward trend.
From a selection point of view we’re in the change over period, VM increasing, along with midpoint breaks. Exporters with some foresight will start actively accumulating fleece wool testing under 1% vm as they will be like hen’s teeth in 3 or 4 weeks time. The challenge they will face is buying and holding stock at record price levels.
From a historical point of view wools on the wrong side of specification aren’t being discounted as much as usual, this is a natural result of an extremely strong market and the “bottom end” being forced up as buyers try to secure wool at a price. Another influencing factor is the interest in fine wool tops, the early stage processors take less notice of greasy test results as they put together processing lots to hit a wool top specification. The good news for Tasmanian growers is that there are now several topmakers making 100% TASMANIAN wool tops, which explains the enormous money being paid for skirtings etc in our February catalogue.
The question on everyone’s lips is how long this bull run can continue, not just for wool but beef and lamb as well. One thing is for certain nothing lasts forever, I still think we can maintain these wool levels for a little while yet, supply will start to disappear in about 4 weeks time which hopefully protects any downside. As always please forward any enquires directly to email@example.com
On Tuesday this week Melbourne hosted the traditional Tasmanian February wool sale. With Melbourne selling in isolation and the day being exclusively assigned to the Tasmanian store catalogue it was a perfect test of where this current market is at and how it relates to our wool types.
From the opening bid (which turned out to be the highest price for the week) competition was vigorous throughout the entire day, with fleece wool selling to levels not seen for 6 years. For me it was the spread of buyers that was most encouraging, with the usual candidates like New England Wool and G Schneider bidding up aggressively; it was the lower profile companies like Fox (buying in part for New Zealand Merino), Australian Merino Exports and Tianyu that purchased the volume.
The market reacted well to the stylish offering and was generally quoted 10-15 cents dearer on fine and superfine types when compared to last weeks close, with high nkt spinners types selling to more extreme levels. Crossbred types were quoted in sellers favour, while skirtings and cardings were exceptional, again.
A special mention should go to the Gee family from “Snowhill” for receiving this year’s top price, well done.
The Tasmanian providence story is gaining more and more momentum due to the ongoing promotional work we are doing both here and in our key markets overseas. This was clearly displayed this week, with half a dozen firms requesting meetings to discuss our value add proposition. The fact that exporters are now fielding requests from their downstream customers to process 100% Tasmanian origin batches means we are now getting to the position where we are able to take control over the price we receive for our product. One very large firm noted in our discussions “what you are doing and what you have to offer is so unique, coupled with the natural beauty of Tasmania, Tasmanian wool is now becoming the most sought after product available and we can use what you provide to differentiate our offer and ultimately maintain and increase our margins”.
Ultimately it is about turning Tasmanian wool growers into price makers, not price takers. Talk to your local Roberts wool representative to find out how you might be able to get involved and help strengthen our offer.
Sales continued on Wednesday with all three centres selling. The market retreated from the highs set the previous day, with fine and superfine fleece and skirting categories losing the gains they made on Tuesday.
The Roberts 2 Tooth Ewe Competition concludes today (Friday) with a presentation function being held at the Powranna livestock selling complex beginning at 6.30 pm. Please join us to hear the results of what has again been another successful event while getting the chance to share a drink and a conversation with your fellow peers.
Please email any questions you may have or discussion points you would like covered to firstname.lastname@example.org
There were 45,000 bales rostered for sale this week, selling Wednesday and Thursday in all three selling centers. Once again 19 and finer surged dearer. 18’s closed in Melbourne on day 1 at 1933 cents clean. This is a staggering number. Even more remarkable is the spread between 20 micron and 18, nearly 400 cents clean. We’ve spoken a bit about the equilibrium of supply and demand heavily influencing the current market, interestingly when you look at the number of bales sold at auction over the last 9 years and only twice have we sold more volume than this year to date. This is a clear indication that there is an increase in demand.
Fortunately for Tassie growers the mainland selection is starting to deteriorate from a VM point of view, with vegetable matter increasing dramatically this week. This looks to be about a month earlier than last year and is obviously a direct result of the amount of grass across the country. By comparison Tasmania’s wools are very free and will be keenly sought by Europeans and China alike.
I hope you got to see the Landline special on China last week, it provided a nice insight into the Chinese industry, frustratingly one comment was made that at this level wool is not competitive to cotton and synthetic fibers. This isn’t just coming out of China, India’s largest consumer of wool has also highlighted the disparity. When will they realise they’re not comparing apples with apples. Wool is a luxury product that demands a luxury price point? Don’t get me started on this one.
All in all it’s a good time for wool, and bodes extremely well for Roberts feature February sale next week. We sell in isolation on Tuesday, this a great result as it should generate some real interest with all eyes on a 100% Tasmanian selection.
Don’t forget the Roberts Flock Ewe Competition kicks of next week, contact your wool representative to get the full program.
Please forward any enquires to email@example.com
Auction markets returned to their usual 2 day Wednesday &Thursday rotation this week after last weeks Australia Day holiday.
The market in Melbourne followed on from the solid finish last week and retraced the small steps lost in early selling from the previous week. Again it was the finer Merino types that lead the way, with the better specified “European” types leading the way.
The average top making types were more irregular, with high mid break, overlong fleece lots less sought after.
Continuing on with the fleece commentary, it seems 19.5 and broader has hit a bit of a wall now, again the spinners types selling well, with poorer lots in and out in price.
Looking now at what might happen over the coming months, I think that overall supply and demand is going to continue to split the market into three or for sections and determine the market direction. Firstly we have the sub 18.5 micron types. There is likely to be less wool coming to market in this category. The season has improved dramatically, therefore the wool produced will be broader. There has been a shift in breeding direction, with producers looking to increase productivity, again increasing the micron and finally there is now some genuine demand for these superfine types again. Therefore I think it is perfectly feasible that the fine and superfine wools continue to improve in price…hopefully.
Then we have the broader merino types. For many of the same reasons as outlined above, I think we could see 20 micron and broader come under a bit of pressure? There will be an increase in supply for one, plus the current price is actually very high relative to their finer counterparts.
Then we have the crossbred market. Unfortunately I don’t see a lot of joy here. While I think we have already seen the major correction with the market returning to more “normal” levels, as supply increases and demand wanes, I cannot see a significant improvement for some time? This is being mirrored in NZ, the worlds largest producer of crossbred wool.
While everything I have outlined here is simply just an opinion, I do think we are in for some good times in the wool industry for a while yet.
Please send any questions or topics you’d like covered through to firstname.lastname@example.org