WEEKLY MARKET REPORT

Week Ending 15^th July, 2016

AWEX Northern Micron Indices Comparison

MARKET RUNS OUT OF PUFF!

This week’s sale, the final before the annual 3 week winter recess, saw the market soften on both days to see the benchmark AWEX EMI slip by 9 cents to 1311. The momentum that had stretched over the past 8 selling days - 4 sales - was stopped in its tracks by the climbing exchange rate. The A$ went on a bit of a run to peak at 76.5 cents on Tuesday night from below 74.4 only a week before. In US$ terms the market added 5 cents to 998, just 2 cents shy of  the magical 1000 cent mark. This point is now a 12 month high - a 33% increase in price from the low point of October 2015. Adding pressure to the market was the spike in volumes, up by 25% in the space of 4 days, taking the urgency out of most exporters buying patterns with this being most evident from the Chinese indent buyers and allowing forward sellers and other destination users to operate more freely on the slightly better selection than what has been offered over the past month. Falls were varied as 18 to 19s and 22 and broader lost 10 to 15 cents with 19.5 to 21 micron taking the brunt of the falls giving up 20 to 25 cents. The finer types escaped virtually unscathed, 17-17.5s just in buyers’ favour with finer microns adding up to 10 cents. As has been the case for some time the better style finer lots are still commanding up to 100 cent premiums with the odd lot of 2% VM making a FNF price. Growers in Fremantle were unimpressed with the market falling just 5 to 10 cents as 25% of their fleece was passed-in on Wednesday!!

Skirtings bucked the fleece room trend as good competition pushed all types and descriptions 10 to 20 cents higher - some lots more as the superior style finer micron types <3% VM came under increased buyer scrutiny to post gains of up to 50 cents. Crossbreds couldn’t seem to make their mind up as to which way to go. 25 and 26 microns were the best performers of the sale climbing 30 to 50 cents, 28s were unchanged although we had 1 lot of 28 micron fleece make 31 cents better than the indicator with 4.5% VM!! The broader microns >30 lost around 15 cents. Cardings gave up last sale’s gains to fall by 4 cents - locks being the culprit, 5 cents cheaper.

The strong finish in Fremantle was just the tonic the market needed as we head into the recess. Their indicators are ahead of the East coast for 19 to 23. Had it not been for the exchange rate the market could well have finished in the positive as buyers were reporting keen enquiry till the very last lots sold and still a few sniffing around today for wool to finish off orders.

The record-breaking S & P 500 drove not only the US$ but most global currencies higher except for the Chinese Yuan now at 6 year lows against the greenback.  Also helping the US$ was the far better job figures from America, over 100,000 more jobs created in June than anticipated. This run on exchange rates was the catalyst for the softer wool market but still underlying solid demand should see the market resume on a good note despite rumours of a 50,000+ bale catalogue.

Ag Concepts Fwd Prices at 15 July 2016

Main Buyers (This Week)