WEEKLY MARKET REPORT

Week Ending 1^st July, 2016

AWEX Northern Micron Indices Comparison

EUROPE SAYS “SO LONG” TO BRITAIN ANYWAY

 The final sale of the season, S53?? brought good results for growers despite the turmoil and global market chaos the Poms caused by their “Brexit” vote in the positive 52/48% last Friday. The market moved upwards by 12 cents to have the EMI finish at 1297cents, a near season high as only 2 weeks have been higher over the past 12 months. When converted to US$ terms, the fall in the exchange rate saw a 2 cent fall to 965 cents. This sale followed the pattern of the previous 2 sales with the medium/broader types leading the way with 19.5 to 23 micron up by 20 to 30 cents. The finer types did also claw back all of last sale’s losses lifting by 10 to 15 cents with the superior lots again up by 50+ cents or better. This week’s rise has seen 19.5 and broader recapture all the losses of early June (when currency shifts saw the market lose 20 to 45 cents) to be up to 40 cents higher with finer types still 20 to 40 cents shy of their early June peaks.

Skirtings also enjoyed renewed buyer competition as most types and descriptions added 10 to 15 cents, bar the carbonising types (>15% VM) that were somewhat irregular. Cardings reversed last week’s losses as prices lifted by 5 to 15 cents for all types in this sector. Crossbreds had a mixed sale as finer microns <26 were 10 to 15 cents better as broader lots gave up 10 cents from last sale.

The wool market withstood the negativity of the Brexit vote as financial markets and currencies settled down following global markets’ meltdown last Friday as the A$ moved from 73.10 to 76.50 cents. Despite global market’s reaction to the vote, the fundamentals of supply and demand and exchange rates still dictate price variation above all outside influences. The closing level of 1297 cents - the second highest on record - is just 7 cents shy of the 1304 cent peak of mid August and well above the low point of 1169 in mid October. This sale was the smallest 3 centre sale since August (28,800) bringing the yearly total to 1.819m bales offered (down by 8% from last season), 1.972m bales, which was about the same amount increased from the previous season of 1.835m bales, volumes up and down in the one spot, you might say.

The top buyer for the season was Techwool Trading with 223,000 bales, 13% of the national total as the top 10 buyers secured 71% of the overall total. Lempriere was in 4^th place with 125,000, Adelaide based Michell bought 64,000 and noted superfine buyer, New England Wool, 32,000 to be No. 16 on the list.

This week sees the start of the new selling season with a combined 3 centre total of 37,000 bales. A strong start to the season is expected barring any financial upheavals over the weekend or wild moves of exchange rates. Lack of quantity will help the market as the 3 week winter recess looms following Sale 2. We open proceedings on Thursday with an 850 bale catalogue. 

Ag Concepts Fwd Prices at 1 July 2016

Main Buyers (This Week)