WEEKLY MARKET REPORT

Week Ending 11^th  January, 2013

Northern Micron Indices Comparison: Source of information: AWEX

DOUBLE DIGIT RISES CLEAN SWEEP

It was a pleasure to be first seller this week in Sydney with the news that Melbourne had opened 30 dearer on Tuesday. This was not only maintained, but continued across all categories throughout the week. Most of the gains were on Wednesday but small gains were recorded on Thursday with the EMI ending at a seven month high. Interestingly, the 52,063 bales offered was the fifth largest offering of the season - up about three thousand bales on same sale last year. Only 3.8% was passed in nationally, although the West Australians still found a way to pass in over 7%. This has been a good week for the market for several years now, last year the EMI rose 27 cents, this year 39 cents.
One feature of this week’s sales was the return to the top of the list by Viterra. The company, mainly grain based, was recently sold to Glencore who immediately sold the wool interests to Agrium (owner of Landmark). This sale has been subject to review by the ACCC and is expected to be now near complete and able to proceed allowing Viterra to re-enter the sale room and take stock. What we are unsure about at this stage is whether the broking and buying entities of Viterra will be merged with Landmark/ Dalgety Trading or left as is. Apart from this we believe mills in China need to purchase and it is genuine demand that fuelled the rises. Our expectations are that this will continue for at least three weeks leading into Chinese New Year in early February. It is not expected that there will be any dramatic “correction”, rather consolidation as we move into autumn.
We traded our first forward contract in some time this week at full tote to the current market and expect more to follow. For those growers interested in hedging for the late autumn/winter and spring selling we would urge serious consideration be given to this over the coming weeks. Robert Herman, principal of AgConcepts, will be one of our key presenters at our Woolstore Open Day on February 9. This will be a good opportunity to learn more about forward selling your wool clip.
This week marked the first sale for us in the “new” sale rooms. These rooms, built a few years ago when Elders and Landmark decided to leave AWEX, have caused buyers concern with two rooms operating. In an effort by AWEX to bring all sellers back together they relinquished two old purpose-built tiered rooms to join AWH sellers in the non-tiered rooms. The beauty for us is that they are literally 10 paces from our offices in Yennora. We are told to expect soon a new 5 year lease for both showfloor and sale rooms which will be a relief. Next week we will offer 860 bales on Thursday with positive expectations.