WEEKLY MARKET REPORT

Week Ending 12^th July, 2013

AWEX Northern Micron Indices Comparison

TOUGH BUT FAIR

With the largest offering in 13 weeks the wool market made a reasonable fist of the last sale for three weeks. The offering of just short of 50,000 bales saw 90.5% sold to the trade nationally with a slightly better rate in the North. The market opened on a good note on Wednesday probably about ten cents better for good types, but waned as the day progressed to end in negative territory by the close. On Thursday, with the recess in mind, not surprisingly the market bounced a little and gave buyers the breathing space they need to do some business during the recess. The pleasing result this week was the increased interest in fine wool types (particularly 18 microns and finer) with some select lots up to 40 cents dearer.

Our catalogue of close to 2000 bales was first up on Wednesday and included a good selection of well grown wools. About half the catalogue was from the Louth and Tilpa area and, despite a very long dry spell up till May, the wool although hungry fine maintained good tensile strength and little or no colour or veg matter. What was very evident this week were the benefits of proper clip preparation. The well prepared clips saw the small increase for all main lines whilst the cast lines did see some weaker competition. Skirtings were slightly off the pace from last week and cardings were again red hot. The locks in our catalogue ranged between 470 cents and 560 cents which equates at close to $1000 a bale! Added to this, stains were all making between 300 and 400 cents so, when the averages were done at day’s end, the overall result isn’t that far behind last year’s clip results.

Crossbreds were again well supported and closed the week close to par on the previous week. The EMI this week last year closed at 1067 so the close this week is about 5% less than last year. What is interesting from recent AWTA data was that the national wool clip in the space of 12 months has reduced micron by 0.5 which is a big year on year reduction. This will, in some part, explain the problems for the finer end of the market and also explain why 22 and 23 microns have been outselling 19.5, 20 and 21 microns for weeks. Our newsletter due out next week will have more detail on the shift in production of recent years.

The annual wool buyer’s end of season social function known as “Carding Night” was held last night in Melbourne and the only two representatives from the North (buyer or broker) were Luke and Andrew, who no doubt enjoyed the company of our buyer customers into the wee small hours. Hopefully the goodwill extends into the sale room when sales re-commence on the 5^th August.

There is positive talk for the coming season. It is expected that a decent winter in many wool growing areas will boost wool cut and micron and ease the pressure of fine wool.

Fwd. Price Trades W/E 12 July, 2013

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

1007 cents ê  4 cents compared with 05/07/2013                                  0.9302 é 0.0191 compared with 05/07/2013

Northern Market Indicators (AUD cents/kg clean)

1020 cents ê  6 cents compared with 05/07/2013