WEEKLY MARKET REPORT

Week Ending 13^th February, 2015

AWEX Northern Micron Indices Comparison

HAPPY CHINESE NEW YEAR??? – NOT!

Firstly, an apology. Most people would’ve been pretty pleased with last week’s heading “Highest Point for 2 Years”. This was, in fact, incorrect. We were at the highest point for 12 months as one reader of our report conveyed to me and, sadly, that high point didn’t last. The AWEX EMI slipped by 9 cents to 1092 and worse in US terms (a 21 cent fall to just 836 cents). A look at the individual microns paints a bad picture as falls ranged from 25 to 50 cents for 19s and finer due, in part, to a style adjustment from the vast number of super-fine lots on offer the previous sale. Medium types took a hit also but not to the extent of their finer counterparts losing 10 to 20 cents. Growers reacted to the price adjustment as 24% of the fleece selection was passed-in on Thursday and 20% for the whole week as discounts for colour, cott, overlong and high mid-break lots were back in vouge.

Skirtings held their own after being out-performed by the fleece sector over the past few sales. Finer types (>3% VM) posted gains of 20 cents while burrier, medium micron lots looked 10 cents dearer. Cardings again re-wrote the record books as all types (regardless of micron and description) added 15 to 30 cents. Both MCIs on the eastern seaboard are now over 900 cents - 909 in Sydney and 921 in Melbourne. To illustrate the dizzy heights of this sector a prominent grower from the Marra was paid 585 cents for Lks and 621 for Crt, averaging $1103/bale and $1186/bale respectively, easily beating his Bkn prices!! Crossbreds also ignored the fleece sector’s hiccup as 26 and 30 microns lifted by 5 to 10 cents with all other indicators unchanged. The excellent prices for Room 2 wools were reflected in the clearance rate of over 98% in Sydney, the best for a long time.

At first glance a 9 cent drop in the EMI doesn’t look so bad but a quick look at the individual microns and the falls are indeed larger. In years gone by, when the EMI was made up solely from fleece microns, if 17s to 22 micron fell 20 to 30 cents the EMI would fall by the same number or thereabouts. Nowadays the EMI is a combination of Flc, Skts, Cardings and Crossbreds so we get a situation like this week whereby poor results in the fleece sector are counter-acted by good performances in other sectors to give a misleading and better than expected result via the EMI figure.

Chinese New Year - a sale that is shaping up to be the largest in 4 years (59,000) or the market just rising too quickly? Take your pick as to which scenario fits the current situation. The exchange rate can’t be it, although a fall towards 75 would help stabilise the market. Sentiment hasn’t changed any in the past week or so, demand is still there but, as always, when markets rise growers want a piece of the action. The anticipated big offering won’t happen - more like 56/57k. It’s just the Chinese New Year celebrations that might disrupt any advances in the market next week.   

Ag Concepts Fwd Prices at 13 February, 2015

Main Buyers (This Week)