WEEKLY MARKET REPORT

Week Ending 12^th May, 2017

AWEX Northern Micron Indices Comparison

DOLLAR DOWN + VOLUME DOWN = MARKET DOWN

Our bold prediction that the market would be solid was spot on! The only trouble was that it barely lasted a day. While the market was okay on the Eastern seaboard, cracks appeared in Fremantle late in the opening session. These cracks widened considerably on Thursday as all 3 centres lost ground. The end result saw the EMI fall by 10 cents to 1534 and gave up 19 cents in $US terms (to 1127) as the $AU came under more pressure to fall to 73.30 on Wednesday night (a 4 month low). No micron was immune from the cheaper trend bar 16.5s (just a 6 cent loss); all others (17 to 21s) retreated by 25 to 35 cents with 22 and coarser looking 10/15 cents back from last week. We were fortunate enough to sell on Wednesday and escaped the carnage of the final session. Types with the right specs still defy any negative tone; we had 2 lots around 19 micron make 80 to 110 cents better than the indicator.

The outcome was similar for skirting types. Fine lots <18 micron and under 5% VM  with no cot/colour gained a modest 10/15 cents while the broader burrier selection peeled off by 40 to 60 cents. Again buyers were commenting on the amount of cot and jowl that is in skirtings and the need to apply heavy discounts. If time and staff allow when shearing, it’s crucial that these faults be taken out to lessen the discounts on these wools. Cardings escaped the falling market to be in sellers’ favour to 15 cents dearer (Melbourne). Crossbreds also defied the cheaper trend of their merino counterparts to also finish in sellers’ favour - the forex rate and diminishing volumes helping this sector. 

This week proves that a smaller selection and favourable currency is not always enough to stave off a fall in the market. The rapid rise of last week looks now to have been too much. The inferior selection with ever increasing VM levels that buyers found hard to place on certain days (in some centres) compared to previous sales also influenced price trends. Prompt business was hard to find as the weaker AU$ vs US$ saw cheaper offers to Chinese mills and some waiting to see if any further reductions were forthcoming.

Mixed signals looked to dominate showfloor talk as demand for sub 18.5 micron has stalled, as these price levels hit some resistance after rising rapidly since January with only the “crackers” unaffected. The fall in prices did meet with some grower resistance as the pass-in rate climbed to 16% nationally and a whopping 28% in Fremantle. Next week’s offering is slightly less at 36,000 bales; hopefully the dwindling volume can help the market hold firm.

Ag Concepts Fwd Prices at 12 May 2017

Main Buyers (This Week)