WEEKLY MARKET REPORT

Week Ending 16^th August, 2013

AWEX Northern Micron Indices Comparison

LAST WEEK’S RISES GOOOONE!

The good start to the resumption of wool sales was just that! A one-week wonder it seems. Last week’s gain of 10 cents to the EMI was all but lost as a falling market took 9 cents off the indicator to have us back to square one. Buyers were a bit apprehensive as to where the market was headed, but most were confident it might be okay despite the softer tone from the small Wooltrade sale on Tuesday that finished 5 to 10 cents lower than last sale’s close. Some up and down movement on the Eastern Seaboard saw both centres finish unchanged on Wednesday. The market had unusual moves as Sydney’s finer types lost ground as the corresponding indicators were dearer in Melbourne with the opposite effect on the medium to broad lots – sellers’ favour here and cheaper in Melbourne. There was no confusion in the west as Fremantle’s indicators fell by up to 10 cents. This led to falls across the board on Thursday as both Eastern centres were in sync as losses of 5 to 15 cents covered most indicators. By the end of the sale Sydney’s falls were restricted to a 5 to 10 fall as Melbourne recorded similar falls except for the 20 to 23 microns giving up 20 to 30 cents.

As has been the case for many months, the Room 2 lots outperformed the fleece types. Skirtings, regardless of style, VM or micron added 10 cents to last week’s values on the opening day to finish solid on Thursday (bar the higher VM lots that were irregular). Cardings had an up and down week as the record level set last sale was relinquished on the opening day as locks and stains finished in buyers’ favour. However, increased competition on the final day had all descriptions 5 to 10 cents higher to have the MCI at 838 cents - a new record level. The only sector unchanged for the sale was the crossbreds with no movements recorded for any indicators.

Most talk on the show-floor was the good start to sales last week. In previous years the market has fallen in August and taken, in some cases, through till late September or October to show signs of a recovery. Quantity or, more to the point, lack of it should be of concern to exporters as offerings are already behind by over 4% year-to-date from last year. Most alarmingly in the west, Fremantle quantities are at a critically low volume. After the three week recess they conducted a 2 day sale, this week a 1 day sale and next week not enough wool to hold a sale! This surely must ring alarm bells in China. The effects of last year’s dry Spring to Autumn period is still being felt as lighter wool cuts and large numbers of sheep sold off to kill will still be impacting well into the future. Currency fluctuations also may be causing angst as a 4 cent move last week (88 to 92 cents) would have some exporters more cautious than normal. One thing buyers can’t complain about is the quality of the offering, with several commenting on our catalogue this week. This was reflected in some lots making 10 to 20 cents above the indicator. Some fleece lots from Nyngan and Mendooran were typed as “Best Topmakers”, even with over 3% of Bathurst Burr in some lots! A great job of presentation was done by all growers. We offer 700 bales on Thursday, with 28,000 on offer nationally (only on the East coast). Unchanged hopefully!    

Fwd. Price Trades W/E 16 August, 2013

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

1008 cents ê  9 cents compared with 09/08/2013                           0.9169 é 0.0099 compared with 09/08/2013

 Northern Market Indicators (AUD cents/kg clean)