WEEKLY MARKET REPORT

Week Ending 14^th February, 2014

AWEX Northern Micron Indices Comparison

AT THE BOTTOM??????

Our hopes that the market could hold at last sale’s levels were quickly dashed as the opening day in Melbourne, consisting of a stand-alone Tasmanian selection, saw the market ease by 10 to 15 cents. This was not such a bad result as there is a “freight” component discount of about 20 cents with Launceston wool that has to be shipped to Melbourne before being containerised for export. But worse was to come - all three centres came on line on Wednesday and recorded heavy losses. Thursday continued in the same vein but didn’t fall to the extent of the previous day. By week’s end the finer types took the brunt of the losses, 18 and finer copping a hiding to the tune of 60 to 80 cents. The broader indicators from 18.5 to 22 micron fell 20 to 40 cents. The inferior types with heavy burr, colour and cott, along with high mid-breaks in some cases, were almost neglected as buyers even struggled to pay good money for lots with the right “specs”, with some inferior lots just ahead of skirting prices. Growers resisted this current price fall as a massive 40% of all fleece offered on Thursday was passed-in with Melbourne and Fremantle unable to sell 35% of their total offering with the overall pass-in rate at 30% - the largest daily rate since October, 2008. This sale’s fall was the largest weekly drop in five months (27 cents) and the market is now at a five month low with the EMI AT 1088 - losses now totaling 44 cents in a fortnight.

Skirtings came under pressure from the outset with falls of 30 to 40 cents common for most microns and VM levels. The least affected were the burrier types higher than 10% VM, still illustrating a lack of these carbonising types in the market due to no spring rainfall producing no feed as well as no burr! Cardings looked to be the least affected sector of all as the MCI fell 10 cents after a rally on Thursday to have most descriptions back 10 to 20 cents. This said, we still had locks from Brewarrina making above 500 cents and crutchings from Binnaway fetching over 650 cents while 40mm lambs wool realised over 700 cents, still very good money that boosts clip averages. Crossbreds also weren’t immune to the sour sentiment in the market as finer types, 26 and under, lost 20 cents with the broader indicators off by 5 to 10 cents.

Chinese New Year, high exchange rate and weekly volumes over 50,000 bales - a perfect storm (as some people would say) for the market to fall and it did. Apparently business has been very tough to do with one wool-buyer commenting that “it’s as if they’re not answering their emails”. Maybe the tide has turned, the exchange rate is under US 90 cents and there has been some enquiry over the past 24 hours and a little bit of wool booked up close to these levels. This indicates we might be at or near the bottom of the market for the moment. National quantities will average just shy of 50,000 bales for the next 3 sales, but should drop away after that. We offer 1500 bales next Wednesday when, hopefully, the market stops its current slide and we are all comparing rainfall totals from this weekend and the cricketers flogging of South Africa!!    

Main Buyers (This Week)

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

1088 cents ê 27 cents compared with 07/02/2014              0.8934 ê 0.0033 compared with 07/02/2014                        

Northern Market Indicators (AUD cents/kg clean)

1108 cents ê 32 cents compared with 07/02/2014