WEEKLY MARKET REPORT

Week Ending 15^th July 2011

Northern Micron Indices Comparison: Source of information: AWEX

WE’RE NOT DONE YET!

A reasonable finish to wool sales as fears of another tough week had abated by the end of selling on the second day. Talk of a 30 to 40 cent fall rang true from the opening lot on Tuesday, but buyers seemed to warm to the task as a recovery of some sort had been staged when we sold midway through the day. Even though the market was cheaper, the outcome was far better than what was predicted earlier in the day. 20 to 22s only lost 5 to 10 cents, except for 21s which posted a 3 cent gain. Finer types varied with some better 17 to 17.5s pushed higher by Italian orders. However, the lower style and tender lots dragged 16.5s back 60 cents; 17, 18.5 and 19s  slipped an average of 15 cents and the 18 and 23 micron indicators losing 25 to 35 cents. The recovery kept going on Wednesday as 18 and finer were unchanged with all other indicators 5 to 15 cents higher. Even with the EMI recording only a 2 cent rise it was a great way to go into the three week winter recess. As the table above illustrates, all medium micron lots staged a recovery with 17, 18.5 and 23s down 10 to 15 with 18 and 16.5 microns hardest hit. We still had buyers booking up passed in lots on Friday morning - a good sign of genuine enquiry with talk of plenty of wool booked up for August and September shipment. This augers well for a good start to sales which will recommence on Wednesday 10^th August providing no economic bad news comes out of the Northern Hemisphere in the next three weeks that may dampen demand.

Skirtings held their ground on the opening day bar the lots carrying heavy cott and colour again not well sought after. The final day’s offering came under renewed buyer pressure with light vm types under 5% 10 to 20 dearer with the straight burrier types closing 10 cents dearer. Cardings had an up and down week as fine locks less than 19.5 micron lost 20 cents only to claw back 10 cents on the final day of sales. Stains and crutchings also added 10 cents to last week’s quotes, this despite buyers having to contend with the largest weekly offering of cardings in Sydney for 9 years (3100 bales-15% of the week’s offering). Crossbreds also had a good week with 28 and 32 micron indicators up by 5 to 15 cents while 26 and 30 microns fell up to 5 cents.

A well earned rest now for buyers and brokers alike as we move into the annual three week winter recess. For us here at Don Macdonald & Co it has been an extremely hectic period since our first sale in early May. In the eleven weeks till this week’s sale we’ve offered over 11,500 bales to the trade with a clearance of 92%. The next six months and indeed beyond hold much hope for a sustained wool market at these levels or, dare we say, even higher?  Supply is still extremely low and demand is good - a situation that won’t change in the for-seeable future. Let’s hope badly needed rain comes before our next report on 12^th August.                                                            AgRisk FDIC Indicative Quotes 15/07/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1361 cents (é2) compared with 07/07/11                         1.0631 ê 0.0111 compared with 07/07/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1410 cents (é1) compared with 07/07/11