WEEKLY MARKET REPORT

Week Ending 11^th May, 2018

AWEX Northern Micron Indices Comparison

RECORD BOOKS REWRITTEN – AGAIN!!

History again looked to repeat itself as all participants on the Eastern seaboard are keen watchers as to where the market in Fremantle finishes. Given the 2 hour time difference sales are well and truly done with here and, more often than not, how the market ends in the west is a guide as to which way the market will track here the next day. It was a welcome surprise to see Fremantle finish so strongly last Thursday and was just a sign of things to come as markets exploded into action on Wednesday as records were smashed. By week’s end all 3 centres made massive gains with fleece indicators climbing by 40 to 90 cents. The AWEX EMI set new daily and weekly records adding 55 cents to 1891, 23% higher than 12 months ago. The regional Indicator in the west is an incredible 2018 cents. 20 to 23 microns are at record highs as all types, regardless of yield, VM or strength were swept up in the scramble to secure quantity in most cases not worrying about faults.

Skirtings also benefitted from the supply squeeze as all types across all microns and VM levels posted gains of 50 to 60 cents. Cardings also were caught up in the buying frenzy as the 3 selling centres recorded double digit rises and the 3 MCIs are averaging 1410 cents across the country as all types in this sector rose by 15 to 30 cents. Crossbreds took a breather this sale as 28s and finer were in sellers’ favour with 30 micron and broader up to 5 cents off the pace.

A great sale to be in as there was no real indication that the market was going to rise in the fashion that it did. Futures trades pointed to a dearer market but nothing to the extent of the gains from the opening lot on Wednesday. The forecasts of a drop in the supply of wool not only in the short term but well into next year due to the state-wide drought in NSW and reduction in sheep numbers and the best FRX in a year (as the A$ sits well below 75 cents - 74.75 this morning) looked to be the catalyst for the renewed buyer activity as some lots were bought without limits and mills have virtually no wool in front of machinery waiting to be processed as hand-to-mouth operations have been the standard practice for some time.

Where to from here - that is the million$ question. The EMI, all regional indicators, 20 to 23 micron and 26s are at record levels and most merino microns at 5 year highs so for the market to keep improving would be quite the scenario given the climatic conditions affecting the quality of the clip and processors’ ability to pass on the higher costs. Next sale’s quantity is similar to this series. Will there be a correction, who knows??? 

           Ag Concepts Fwd Prices as at 11 May, 2018

Main Buyers (this week)