WEEKLY MARKET REPORT

                                                              Week Ending 7^th September, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET STRUGGLES FOR DIRECTION

Wool sales resumed in Sydney this week for a run of five sales till the next Newcastle sale in early October. Coming off a superior selection, as was the case, can result in a price adjustment due to the selection not up to the standard of the Newcastle offering. This, unfortunately, was the case. Finer microns, under 19, recorded losses on both days to the tune of 10 to 30 cents. All other indicators opened dearer but were unable to sustain those rises on the final day to be quoted 10 to 20 cents cheaper by week’s end. Competition, although widespread, was somewhat subdued as buyers were selective with their purchases. Discounts were back in vogue for colour and cott but not as savage for VM as the discount for fleece lots (up to 1.5% VM) looked negligible with lots out to 3% VM 30 to 40 cents from a FNF type. Business is still hard to book up as the volume of tops is building up as spinners and weavers struggle to take new orders. Four buyers bought over 47% of the fleece offering with Lempriere Aust securing 16% with Viterra in 6^th.

Skirtings had a good week and maintained the momentum from the Newcastle sale. All types and descriptions through-out the B fault VM to carbonising types were solid to sellers’ favour. It was pleasing to see the few passed in lots from previous sales went well, as did the fleece lots selling better or around their passed in prices. Cardings continued their recovery as locks and stains posted a 10 cent gain while crutchings added 20 cents to their value. The MCI put on another 8 cents to sit at 553 cents. All three regional MCIs are now over 550 cents. Adelaide based Michells flexed their muscle purchasing 30% of the carding selection with the top 4 buying 55%. Crossbreds pushed on to higher levels as 28  and 32 microns rose 5 to 10 cents with the star performer of the week being the 30 micron indicator - jumping 26 cents. The 26 micron indicator suffered from the merino sector falls, slipping about 10 cents.

The market looks to have settled even though the trend is still negative. Since sales resumed five weeks ago the opening two sales saw the EMI slump 113 cents where-as the past three weeks have seen a reduction of only 22 cents with, as mentioned above, some passed –in lots from sale 7 and 8 selling above their previous best offer.  Lack of volume or the weakening AUD$ (from over 106 to under 102 US cents) hasn’t helped the market  The lack of volume is no more evident than in WA as they held another 1 day sale this week, just 4200 bales and under 7000 bales next week. The AWTA confirmed the volume drop in their August figures as the total bales and weight cored when compared to 12 months ago are down between 1.5 to 2% (900,000 kgs less). This data, now released into China, should confirm that the flock in Australia is struggling to rebuild. We sell on Wednesday next week with 450 bales on offer to a stable market, hopefully!

                Eastern Market Indicators (AUD cents/kg clean)                  AUD/USD Currency Exchange

                Eastern 927 cents ê 7 cents compared with 30/08/12                             1.0200 ê 0.0136 compared with 30/08/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 944 cents ê 1 cents compared with 30/08/12