WEEKLY MARKET REPORT

 Week Ending 1^st June, 2012

  Northern Micron Indices Comparison: Source of information: AWEX

CLOSE TO THE BOTTOM???

Better news this week as the falling market slowed to a crawl rather than the free-fall that it was over the past three weeks. The 66 cent fall over this period  trickled to just an 8 cent reduction in the EMI now down to 1096 cents, the first time the EMI has dropped below 1100 cents since December, 2010. Most of the falls occurred on the opening day as buyers seemed a bit keener on Thursday and some types in the 20 and 21 micron range a little harder to buy late in the day. Most indicators lost 10 to 15 cents with 16.5 down 40 cents and 17.5s giving up 25 cents. The corresponding finer types in Melbourne were hit harder as 17s and finer lost 50 to 85 cents. There was some bright news in the ultra-fine sector as the Wool Factory at Horsham offered lots with one fetching over 10,000 cents. A 1PP lot measuring 12.6 micron made 9,500 cents while a 12.3 lot made 11,700 and one lot of 12.8 passed in for 7,300 cents. This is a doubling in price for these types compared to prices in the spring - let’s hope all other indicators can follow their lead! Even with the market, dare we say, nearly at the bottom, C fault fleece wools (4 to 8 % VM) with a bit of colour and soft cott are now losing touch completely with the indicators as discounts now at around 200 cents, nearly doubling in the last three weeks. With the quality of the offering improving slowly, hopefully these discounts will revert to a more normal level.

The slide in the skirtings came to a halt as well. Keener competition saw most types open the sale unchanged with just the odd lower style lot off the pace. This pattern continued in the same vein on Thursday as all descriptions were quoted as fully firm with some of the better length and lower VM lots dearer. Discounts for cot and colour didn’t look as severe as in previous weeks as only a lot of pieces and one lot of stains were passed in. Cardings started the sale unchanged when compared to last week but were unable to sustain this level as locks eased 5 cents and stains fell 10 cents to have the MCI lose 5 cents this week. The crossbred sector out-performed all others as a solid opening day led to good rises on Thursday. 28 to 30 micron ranges gained 10 to 15 cents while the 32 micron and broader looked 5 cents better as we cleared 100% of our XBs.

Sentiment may not have changed much but the market performed much better than anyone would have guessed. Although booking up containers is still hard work according to all buyers and traders, the lack of quantity over the next three weeks, averaging 29,000 bales, the $AUD under pressure, and an improving quality of offerings, things might take a turn for the better. On the down-side however is the worry over the EU outlook with Greece on its knees and now most Spanish Banks in critical trouble just to add to the regions woes, knocking any hint of consumer confidence for six as caution and belt-tightening is the name of the game. Only the two centres on the Eastern seaboard selling next week with just 28,000 bales on offer with Macwool selling early on Wednesday with a catalogue of 600 bales. Here’s to a stable market and more rain.      

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

                Eastern 1096 cents ê 8 cents compared with 24/05/12                 0.9715 ê 0.0039 compared with 24/05/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1118 cents ê 5 cents compared with 24/05/12