Category: Sheep

Shearing worries spark buyer enthusiasm

Posted on by Caitlin Dearden

The quantity of bales offered for sale this week was sizeable due to accumulation over the Easter recess period. However, that didn’t lead to softened demand. AWEX reported that brokers are talking about sharp declines in shearing activity and this has done well to ignite buyer activity.

The Eastern Market Indicator (EMI) gained a nice 17 cents on the week to close at 1,960 cents. The US$ has moved broadly higher this week and as a result, the AU$ has been collateral damage dipping below 70 cents during the week but finishing at US $0.702. The EMI in US$ terms fell by 21 cents to end the week at 1,376 US cents (Table 1).

The Western Market Indicator (WMI) found strength like its eastern counterpart, lifting 28 cents to 2,093 cents.

The increased offering this week saw 43,053 bales come to market. Growers were more satisfied with the market levels than prior to the recess with just 6.4% of the offering passed in. This meant 40, 290 bales were cleared to the trade. In the auction weeks since the winter recess, 1,235,391 bales have been cleared to the trade, 223,644 fewer than the same period last year. The average shortfall cleared to the trade compared to the same time last year now sits at 6389 bales per week fewer.

The dollar value for the week was $82.9 million for a combined value of $2.848 billion so far this season. A simple calculation of $ value divided by bales sold gives us $2,058 per bale across all types for the week.

All MPG’s lifted in this weeks market but reports are still indicating a lack of support for lesser style wools. Crossbreds have continued the running streak, gaining another 40 cents to 60 for 28 micron. While Cardings have been slipping for the last six weeks, this weeks strength has supported a lift in the range of 10 to 25 cents for the cardings indicator.

The week ahead

The roster for the next few weeks reflects the predicted drop in availability of fresh wool. Next week just 33,464 bales are rostered for sale with all centres selling on Wednesday and Thursday. The following weeks 34,445 and 30,719 bales are currently forecast on offer.

Weekly wool forwards for week ending 3rd May 2019

Posted on by Caitlin Dearden

The forwards market has been quiet again the last fortnight. We had the Easter break last week, so that’s not unusual, but we had just as few agreements this week as then.

Last week, one trade was dealt for 21 Micron wool, agreeing on a price of 2,250¢ for July, the same price as the June agreements from the week before. The other trade was for 28 Micron wool, agreeing at 1,030¢ for November.

This week, both trades were for 21 Micron wool, one for June at 2,250¢ and the other for October at 2,125¢. The forwards curve is still looking pretty flat, so we don’t expect to see a lot of movement in prices for some time.

Supply disruptions and Merino moves

Posted on by Caitlin Dearden

Over a couple of weeks of supply disruptions, lamb and sheep markets have largely been treading water. There have, however, been some interesting moves in the Merino lamb category, if not in the prime lamb space.

Lamb slaughter rates plummeted last week as Good Friday took out a day’s slaughter and probably any Saturday morning shifts as well. Lamb slaughter was down 25%, which is obviously more than one day’s slaughter, so perhaps things are starting to tighten.

Sheep slaughter was down before Easter, having lost 32% since the last week in March. Good Friday only took out a further 4% (Figure 1), so there might have been a bit of a shift back to sheep.

Lamb and mutton markets were largely steady this week, with the Eastern States Trade Lamb Indicator (ESTLI) down 5¢ to 721¢/kg cwt and the East Coast Mutton Indicator losing 5¢ to 506¢/kg cwt.

The only real movement in the east coast indicators this week came from Merino Lambs. Figure 2 shows the East Coast Merino Lamb Indicator stopped just under 700¢ at 692¢/kg cwt. Merino lambs saw a gain of 29¢ and sit 160¢ above the same time last year. We are probably seeing tighter supply from the ordinary season, combined with stronger demand for Merino producers looking to restock.

There has been some good rain in western NSW this week, which while not drought-breaking, is the best they’ve had for some time. There might not be many sheep left out there but it can only be good for demand.

Next week?:

Next week will get back to more normal supply with full weeks resuming. There is still no real rain on the forecast but the recent move in sheep supply might be a pointer to what is to come, for both sheep and lambs.  Forward prices are starting to move towards 800¢ for June and July, but will it be enough?

Wool buyers fill their Easter baskets.

Posted on by Caitlin Dearden

Seven weeks of sequential losses in the wool market have finally turned around. With the market being on recess for the next week due to the Easter break, buyers were aggressive in their attempt to secure quantity. The egg hunt hasn’t begun, but the hunt for higher yielding wools continued and these styles generally achieved larger premiums over previous weeks.

The Eastern Market Indicator (EMI) gained 7 cents on the week to close at 1,943 cents. The Au$ was stronger again this week, lifting 0.03 to finish at US $0.719. This was enough to put the EMI in US$ terms up 11 cents to end the week at 1,398 US cents (Table 1).

The Western Market Indicator (WMI) rose by just 1 cent to 2,065 cents.

There was an increased offering this week, 40,774 bales were offered for sale. AWEX reported that with the upcoming break, many sellers were keen to offload their wool. Fairly unchanged on last week, 10.3% of the offering was passed in which meant 36,574 bales were cleared to the trade. In the auction weeks since the winter recess, 1,195,101 bales have been cleared to the trade, 226,978 fewer than the same period last year. The average shortfall cleared to the trade compared to the same time last year now sits at 6,675 bales per week fewer.

The dollar value for the week was $75.2 million for a combined value of $2.765 billion so far this season. A simple calculation of $ value divided by bales sold gives us $2,056 per bale across all types for the week.

Crossbreds have continued the running streak, gaining another 40 cents for 26 and 28 micron, while 30 MPG fell 20 cents this week. The cardings indicator declined in all selling centres by 5 to 30 cents.

The week ahead

Next week there won’t be any sales due to the Easter recess. Sales resume on the week of the 29th of April where 42,065 bales are rostered for sale. The following week 26,731 bales are currently expected to come to market.

Pre-Easter supply glut fails to dampen price

Posted on by Caitlin Dearden

Prices for all NLRS reported categories of east coast lamb and sheep have risen from levels recorded in mid-March, despite most measures of supply reaching toward seasonal highs. Most categories of lamb are fetching over 700¢ and mutton is holding above 500¢ this week.

Since mid-March lamb throughput across the east coast has been running 18% higher than the pattern set by the five-year trend and sheep yarding levels have been more pronounced, averaging weekly levels 47% above the five-year trend (Figure 1).

A similar picture has emerged for East coast lamb slaughter with average weekly levels running nearly 14% higher than the five-year average trend (Figure 2). The higher supply is having limited impact upon prices as meat works seem to be happy soaking up the additional supply prior to the Easter period slowdown.

A summary of saleyard price movements highlights the market strength over the past four weeks in the face of the higher supply. All categories registering closing prices this week that are around 70¢ to 100¢ higher than a month ago (Figure 3).

The Eastern States Trade Lamb Indicator (ESTLI) managed a 2% gain on the week to close at 722¢/kg cwt. In the West, trade lambs managed to climb also, up nearly 1% on the mid-week price summary from Meat and Livestock Australia, but were unable to break above the 700¢ level yet at 679¢/kg cwt.

What does it mean/next week?:

Reduced sales and a lighter offering is expected as we hit the Easter lull so it’s unlikely to see prices retreat too much in the coming weeks. Although the forecast for rain into the next week is pretty light on and without a clear sign of a decent Autumn break in the south there will be limited opportunities for prices to surge too much higher.

Weekly Wool Forwards for week ending 18th April 2019

Posted on by Caitlin Dearden

Higher than average interest in crossbreds continued this week, a reflection of the historically good prices they are experiencing. The Aussie dollar rose on average this week and apart from the crossbreds, the forward market was quiet again.

In the medium wool category, two trades were agreed for 21 Micron wool; one for June at 2250¢, the same price for June as both trades in this category last week; and one for May, again at 2250¢.

In the coarse wool category, four trades were dealt for 28 Micron, one for November at 1,050¢ and three for April next year at 995¢.

The Australian dollar climbed to a short peak of over 72¢ this week, but has softened slightly today.

The Easter recess for the Auction market will likely mean we won’t see trades next week unless the Aussie Dollar performs backflips. The bunny trail for the forward curve is still pretty flat, so we expect egg collectors (purchasers) will continue to be happy with prices for some time.

ESTLI back through 700¢ but only catching OTH

Posted on by Caitlin Dearden

Lamb prices have had another positive week, with the Eastern States Trade Lamb Indicator (ESTLI) heading towards Easter above 700¢. As outlined earlier in the week, this could just be the start of bigger things to come.

It’s hard to get too excited by the ESTLI breaking through 700¢ since November. Over the hooks (OTH) prices have been above 700¢ for much of the first three months of the year and the saleyards have taken plenty of time to catch up. The unexpected strong supplies have kept a lid on saleyard prices as processors generally have gotten their fill direct.

With the release of yardings data for the week of the fourth, we can see why prices steadied last week. Figure 2 shows East Coast Lamb yardings hitting their highest level for the year, just shy of 200,000 head. The rapid price rise of the previous week no doubt drew out remaining good lambs, but things might have tightened a bit this week.

Lamb prices rallied in the west too. The WA Trade Lamb Indicator gained 20¢ this week to hit 674¢/kg cwt, the highest price since the first week of the year. WA mutton is lagging the east coast, sitting at 438¢, while the east coast is on 509¢/kg cwt.

Sheep yardings were also higher on the east coast last week and this might have continued this week.  No doubt those still waiting for rain are finding 500¢ mutton very attractive.

What does it mean/next week?:

There is little rain on the forecast on the east coast but it looks like autumn might kick off for parts of WA this week. We are also in for a couple of short weeks which can work for or against the market depending on how supplies are tracking. There are reportedly still plenty of lambs booked up, so don’t expect strong rallies for lambs this week, but after Easter things will be interesting.

Crossbred fibres on trend

Posted on by Caitlin Dearden

The wool market has progressed through another week sitting firm. The Merino market saw slight declines in the east and west but it’s the Crossbred market that’s attracting all the attention. 

For the fourth consecutive week, crossbred prices have risen which is a direct contrast to the seven consecutive weeks of declines in the Eastern Market Indicator.

The increasing selection of low yielding wool was still a prominent feature of this week’s market. Despite the offering in Sydney being the smallest since AWEX records began (1995), the limited supply wasn’t enough to counteract the discounts on poor quality wool.

The Eastern Market Indicator (EMI) eased by 7 cents to settle at 1,936 cents. The Au$ was slightly stronger at US $0.716. This was enough to put the EMI in US$ terms up 4 cents finish the week at 1,387 US cents (Table 1).

In Fremantle, the Western Market Indicator (WMI) declined by 31 cents to finish at 2,064 cents. AWEX made note that the Western Indicator does not include crossbred types which explains why the losses in the West have been more substantial than in the East, they aren’t being supported by strong crossbred values.

37,527 bales were offered for sale this week. 10% of the offering was passed in which meant 33,793 bales were cleared to the trade. In the auction weeks since the winter recess, 1,158,527 bales have been cleared to the trade, 222,475 fewer than the same period last year. The average shortfall cleared to the trade compared to the same time last year now sits at 6,741 bales per week fewer.

The dollar value for the week was $69.54 million for a combined value of $2.690 billion so far this season. A simple calculation of $ value divided by bales sold gives us $2,058 per bale across all types for the week.

Crossbreds gained another 20 to 30 cents this week, and the 28 micron even hit a new record in the South, closing at 1,263 cents clean on Thursday. This weeks analysis article looked into the strength in crossbred prices compared to the broader Merino market so for a more detailed analysis read the article Here. The cardings indicator declined by 5 to 15 cents on the east coast, and gained 5 cents in the west.

The week ahead

Week 42 of the season is the last week before the Easter recess. 42,487 bales are rostered across the three centres, with sales just on Tuesday and Wednesday.

Weekly Wool Forwards for week ending 12th April 2019

Posted on by Caitlin Dearden

Last week, only two wool trades were agreed, and the relative quiet continued this week.  Only four trades were dealt, with two of these being for crossbred fibres. Interest in crossbreds is higher than average, and that’s likely to be because of the good historic prices they are experiencing.

In the medium wool category, two trades were agreed for 21 Micron wool, both for June at 2250¢.

In the coarse wool category, two trades were dealt for 28 Micron, both for September at 1100¢.

It does feel that the forwards market has been quiet. The Australian dollar was slightly stronger this week compared to last week and has been trending slightly higher over the last month, which might give us some clues.

The forward curve can indicate future behaviour. Because we’ve seen prices on the auction market falling, the forwards market curve has gone relatively flat, which leads us to believe we might be seeing a base and it indicates that buyers are fairly comfortable at these levels. It’s hard to know for how long, with many factors influencing auction prices, but the wool market has been historically stable and it’s hard to see that it’ll change overnight.

Wool market ticks along OK

Posted on by Caitlin Dearden

The wool market seems to be sitting in a comfortable space right now, and despite the drought influence on quality there are minimal price movements week on week.

There is a negative impact on the market from the continued supply of low yielding wool coming to the market continues, however the current value of the offering is no doubt being well received by wool producers.

Again, AWEX report that the there is insufficient supply of better style high yielding wool to satisfy buyer demand, these types are keenly sought by exporters trying to satisfy demand. They also note that while the market has had a 6-week negative run, it has only retraced 4.5%.

The Eastern Market Indicator (EMI) eased slightly giving up 4 cents for the week to settle at 1,943 cents. The Au$ was slightly stronger at US $0.71, with the EMI in US$ terms gaining 1 cent to end the week at 1,383 US cents (Table 1).

In Fremantle, the Western Market Indicator (WMI) declined by 4 cents to finish at 2,095 cents.

37,454 bales were offered for sale this week, almost identical to last week with the trade clearing 32,669. This is just 310 fewer bales than last week, however the pass-in rate was again significant at 12.8%.

In the auction weeks since the winter recess, 1,124,734 bales have been cleared to the trade, 217,993 fewer than the same period last year. The average shortfall cleared to the trade compared to the same time last year now sits at 6,812 bales per week fewer.

For comparison, in the first selling week of April 2018, 51,066 bales were sold.

The dollar value for the week was $66.18 million for a combined value of $2.621 billion so far this season. A simple calculation of $ value divided by bales sold gives us $2,025 per bale across all types for the week.

Crossbreds continued to defy the easier trend with an increase of 10 to 30 cents across the board. This is the third week in a row of price improvement, however the Cardings sector was mixed declining by 41 cents in Sydney but posting modest gains in Melbourne & Fremantle.

The week ahead

The roster for next week has the offering again at 38,712 bales followed by 42,465 before the Easter recess.