WEEKLY MARKET REPORT

Week Ending 11^th October, 2013

AWEX Northern Micron Indices Comparison

U.S. DIVERTS POTENTIAL DISASTER

A good week for the wool market as the EMI rose 28 cents to 1127. More pleasing is the result coming out of Washington this morning that an agreement may have been reached on the debt crisis in the USA. Next Friday’s deadline to default on repayments or raise the debt ceiling looks to be resolved as their stock market reacted in a most positive way adding 300 points to the Dow Jones overnight. Confidence is a great thing and talk of slipping back into a recession was a real threat as the US Congress debated over what to do. Sanity has prevailed and, if not, stock markets would have been sent into a tail-spin thus eroding renewed economic stimulus in the Northern Hemisphere. Make no mistake, the wool market would have had potential to fall amid a debt repayment default in the US that may have led to uncertainty and global economic slowdown just when signs or recovery were evident.

The market started with a bang on the opening day and consolidated these gains on Thursday. Once again medium types took the spotlight as 19 to 23s added 30 to 40 cents. Finer microns weren’t neglected but their gains ranged from 15 to 30 cents - nice rises ahead of next week’s designated Super-fine Sale. 19 to 23s are marginally higher than the peak of Sale 10 and just below late January’s EMI high of 1138 cents with 22s at a 16 month high (1236c/kg clean). Discounts shrunk for VM and colour as just 3.2% of fleece failed to sell. Year on year figures compared to last season has the volume of 20.5 to 24 micron fleece types back by 20%, this explaining their price hike of almost 200 cents clean! The dearth of quantity is even more stark given fleece volumes have increased 6% in the same period.

Skirtings followed the fleece lead as 97% was cleared to the trade. Most types and descriptions, regardless of style, colour or VM added 20 to 30 cents to last sale’s quotes. Crossbreds had a more subtle sale as 26s regained most of last week’s fall - up by 25 cents - as 28 to 30 microns put on up to 10 cents. Cardings benefitted from keener competition as a 10 to 15 cent lift across all categories saw the MCI post a 10 cent gain to 825 cents, but still a way to go to reach the record height of 874 cents set in Sale 10.

With the rising market comes good prices on the futures board. Prices out to September next year are 1200 cents for 21s and higher, with the best on offer at 1250 next week. November through to June range from 1200 to 1225. These levels are great lock in prices, and well worth considering as a form of insurance. If you have any questions, don’t hesitate to contact your rep. The highlight of our catalogue this week was a cracking Corriedale clip from Cumnock, arguably one of the biggest in Australia. This superbly prepared clip drew very keen competition from the trade to return to the grower $1000 net/bale. The clip averaged 25 microns, 0.6vm and 70%, with a top price of 780 cents - a great result. Next week should see the market remain either side of unchanged, tending to sellers’ favour.

              Fwd. Price Trades W/E 11 October, 2013

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

1127 cents é 28 cents compared with 04/10/2013                 0.9408 é 0.0019 compared with 04/10/2013

Northern Market Indicators (AUD cents/kg clean)

1144 cents é 24 cents compared with 04/10/2013