WEEKLY MARKET REPORT

Week Ending 11^th April, 2014

AWEX Northern Micron Indices Comparison

A RECOVERY …… OF SOME SORT

The faint light grew and grew. Finally the market did what we were wishing for and took a step, albeit a little one, on the road to recovery. After last sale’s steadying tone and solid final day markets in Fremantle and Melbourne, all and sundry held their breath as to what the outcome of this week’s sale might be. Both selling days produced good gains on either side of the continent, with Fremantle surging on the final day - a 29 cent jump - to give us confidence for next week. The sale opened strongly and kept going as the EMI added 26 cents, the best weekly rise for 6 months, to break back through the 1000 cent mark, now 1019. All regional indicators are now over 1000 with Fremantle at 1059, a 42 cent rise for the sale.  Demonstrating just how flat the market had been, Melbourne’s 14 cent lift on Wednesday was its largest daily gain for 6 months.  Increases spread from super-fine types to medium wools, all adding 25 to 50 cents as some FNF, low mid-break finer types in our catalogue fetched up to 30 cents better than some of the indicators. The premium being paid for the “best” style types is typical of the mixture of the selection at this time of the year. Best style and better fleeces are becoming scarcer (representing just 19% of the fleece offering) as the lower style, higher vm is growing in volume, but the selection is increasing in strength as the proportion of 40nkt types has increased sharply in the past few sales. The pass-in rate was slashed as over 96% of the fleece catalogue on the Eastern seaboard was cleared to the trade.

Merino skirtings followed the lead of the fleece sector. Whilst the increases weren’t as pronounced, the market saw 20 to 30 cent gains with most emphasis on “best” types 5% vm and lower finer than 19 micron. Most lots found a home as 98% was cleared to the trade. Crossbreds also benefitted from the renewed buyer interest pushing 26s and broader 5 to 10 cents higher, while finer microns looked 20 to 30 cents up from last sale. Cardings were the under-performers, just in sellers favour as each centre remarkably added 1 cent to each of their regional MCI.

Relief would be the first word that springs to mind. History says commodities rise and fall in price and the wool market is no different.  The ups and downs can be as big or as small as each other. What makes this even stranger is the  renewed vigour coming on the back of an upward shift in the exchange rate this week, a jump of almost 2 cents to a tick over 94 US cents, its highest level in 5 months. The rise did catch most by surprise, but the market may continue to strengthen next week according to our usual and very reliable source!

Sales move to a Tues/Wed pattern next week due to the Easter holidays. Next week’s national catalogue is 37,000 bales but Sydney can only muster 7,600 bales (slightly more than this week) one of our smallest sales for years. Next sale will see just over 600 lots of fleece in the North, 3666 bales, the smallest offering for this sector for many years. Backing up this alarming lack of quantity is the AWTA figures released for March. Less wool is coming onto the market as the period up to March this year compared to last year is 3.5% lower, a drop of 9.4 million kg (10,000 bales). This can be solely attributed to the drought which in some areas is far from over and in others the ”best Autumn” in 15 to 20 years is what we’re hearing. Let’s hope the gaps fill in sooner than later with winter just around the corner.

Main Buyers (This Week)

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

1019 cents é 26 cents compared with 04/04/2014                                 0.9409 é 0.0182 compared with 04/04/2014

Northern Market Indicators (AUD cents/kg clean)

1032 cents é 26 cents compared with 04/04/2014

Apologies for last week's link not working. We'll try this week with the following links for you to look at:

 Click here http://www.woolmark.com/working-with-wool/tested-by-nature