WEEKLY MARKET REPORT

Week Ending 11th September, 2015

 AWEX Northern Micron Indices Comparison

RAM SALES OFF TO A FLYER

As we mentioned last week picking the market direction can be tricky even on a daily basis. This is exactly the case this sale as the market moved in two directions. The AWEX EMI did post a modest gain of 2 cents this week to 1260 with cardings and crossbreds helping the indicator stay in positive territory. The market opened on a solid footing as fleece types made single figure gains in Sydney and rises of 15 to 20 cents in Melbourne and more in the west. This gave hope that the market may have finally found a new level but sentiment changed quickly on Thursday as fleece types gave up 10 to 20 cents across the board. By week’s end it was nearly impossible to see any clear direction in any of the 3 centres. Fremantle was the only centre to perform with some indicators up to 25 higher. Melbourne seemed to split into 2 as 18.5 and finer rose 15 to 20 cents while 19s and broader lost 5 to 10.  Sydney couldn’t make its mind up as 17s and 19 to 23s were 10 to 20 cheaper, while 16.5 and 18.5s in sellers’ favour as 17.5 and 18s were unchanged. We were fortunate enough to sell on Wednesday and struck a good market with a few good results. A 21.7 lot from Coolabah looked 30 dearer than its indicator with 3 lots of 18.9 from the one clip at Tooraweenah about 50 dearer and very little discount for some types containing up to 3%VM, over-long or with colour and low nkts.

Skirtings also followed the fleece movements as a good opening session with increases of 10 to 15 cents (long types the most beneficial) was cancelled out on the final day. The low VM lots < 3% gave up the opening day’s increases with 5% > in sellers’ favour and 19 microns in buyers’ favour. Despite this flat market we had 5 lots of “BKN” making over 900 cents and a lot of “BLS” selling for 788 cents. There were subtle changes in the carding market as both MCIs on the east coast rose by 3 and 4 cents as Fremantle put on 24 cents, all 3 now within 3 cents of each other - 1088 to 1091.We created a new record for LKS from Coonabarabran (764 cents) beating the price set in June by 15 cents - great money!!! Crossbreds also shook off the negative tone of their merino counterparts as finer types < 26 micron added 25 cents with 28s up by 10 and the broader types unchanged. This sector’s highlight was a lot of 23.3 XB LMS from Birriwa that yielded 77.7 with 0.9 VM making 948 cents.

A key point of note is the oil price and its influence on the global economy. The price of oil (today at US$46/barrel) has been halved since mid 2014, only the 4^th time in the past 40 years a drop of this magnitude has occurred. Global consumption is 340m barrels/year, a $10/barrel fall equates to a transfer of $3.4 billion from oil producers to consumers. This current US$60 fall from last year’s peak is equal to a US$2 TRILLION transfer of money, more than enough to stimulate global economic growth. History says economic growth is good for about 2 years after the oil price has bottomed which won’t harm wool prices as demand for apparel will lift but will also help man-made fibres compete at low levels as cotton is under pressure from low polyester prices.

As we mentioned last report ram sales have begun in earnest. Kerin Poll at Yeoval had a 100% clearance of 250 rams for a top price of $6,600 to average $1,852. Haddon Rig held their sale on Thursday and a combined catalogue of 160 horned and poll rams averaged $2,317 topping out at a handsome $10,000 for a horned sire.

We should have a report on the Nanjing wool conference next week and where to for the market, a toss of the coin??

Ag Concepts Fwd Prices as at 11 September 2015

Main Buyers (This Week)