WEEKLY MARKET REPORT

Week Ending 11^th November, 2011

Northern Micron Indices Comparison: Source of information: AWEX

MARKET ON SHAKY GROUND

The positive outlook that futures are forecasting didn’t filter through to the market as a softer tone on both selling days left the EMI 5 cents cheaper for the week at 1,219c/kg. The fall in the exchange rate on Wednesday night failed to activate any business, rather, sat a few buyers on the fence with a “wait and see” approach as to where the AUD$ will go. Wednesday’s sale opened with a bit of an each way bet as 19.5 and 18.5 and finer recorded marginal moves either way. 19, 20 and 21s slipped an average of 10 cents with 22 to 24 micron supported to the tune of 5 to 20 cents. It was hard to see how some of these indicators were quoted as cheaper with some of our 20 micron lots made up to 20 cents better than the indicator. Three lots of 19 micron with 1.3 VM averaged 1512 cents (over 20 cents higher than the indicator) and our 21s with 1.4 VM averaged 1361 cents with the 21 micron indicator at 1332 on Wednesday night. Thursday’s uncertainty saw losses of 5 to 15 cents for 19 and broader and up to 25 cent falls in the finer sector. The only indicators to finish the week in positive territory were 22 and 23s, up to 10 higher with all others 10 to 30 cents down.

Skirtings again bucked the downward trend posting good gains on both days. Wednesday opened with 5% VM and greater finding good buyer support jumping 20 to 30 cents with low VM pieces and bellies fully firm. Thursday saw the same pattern with burrier lots 10 to 20 dearer again. Cardings had an up and down week as crutchings remained unchanged, stains added 20 cents and all types of locks backed off to the tune of 15 to 20 cents to leave the MCI unchanged for the week at 725 cents. Crossbreds came under more pressure as quantity increases saw 26s lose 25 cents and 28 to 32 micron lots 10 to 15 cents back. The Crossbred selection made up 25% of the offering in Sydney with 28 micron the biggest volume on Wednesday followed closely by 30 microns. This situation is unlikely to change as we are in the peak Crossbred shearing time of the year.

Once again the cloud of uncertainty that is hanging over Europe looks to stall the good rises in the market of two weeks ago. The Italian debt crisis looms large on the horizon with Europe’s ability and willingness to bail out Italy (as they did with Greece) putting pressure on the likes of France, Britain and Germany. The eighth largest economy in the world owes over 1 trillion EUR and the likelihood of debt default leading to recession thus the possibility of a big drop in consumer demand, leading to lower prices is a major concern. Next week will see us offer 800 bales on Thursday with frayed nerves and anxious traders the biggest influence as to which way the market moves in the next few weeks.                            

                                                                   Agrisk FDIC Indicative Quotes 11/11/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1219 cents (ê 5) compared with 04/11/11                        1.0140 ê 0.0102 compared with 04/11/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1261 cents (ê6) compared with 04/11/11