WEEKLY MARKET REPORT

Week Ending 16^th November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

LAST DAYS SURGE

A strange week by anyone’s reckoning as the market moved every possible direction as if on the giant roller-coaster at Movie World. By the end of the sale it would have been hard to work out just how and why the indicators finished where they did and, for ideas of which way the market will go in the run till Christmas, opinions at this stage are only a stab in the dark. Finer indicators under 18.5 fell 15 to 50 cents (some of these now giving up close to 100 cents in the past 2 weeks) making super-fine growers selling next week  nervous as they line up for the final Newcastle of the year. Middle micron types (19s) edged 5 to 15 cents higher as the medium to broader merino lots, 20 to 23s, jumped 35 to 45 cents, wiping out last week’s losses. It seems we have dodged 2 bullets in 2 sales. Last week’s market was solid when we sold first up on Wednesday, before it collapsed on Thursday and by the time we sold late on Wednesday this week the market was in recovery mode after a tough opening day in Melbourne on Tuesday. Last week’s sudden fall (according to one source) was that two prominent buying companies had successfully talked the market down as plenty of wool was hitting the market, both pre and post Christmas but offerings to date are 5 % (36,600 bales) behind the same week 12 months ago - this figure more than likely to grow than shrink.

Skirtings took their lead from the fleece room as big opening day losses of 35 to 45 cents saw the gap between low VM types and burrier lots tighten. Thursday’s recovery was not as pronounced as the fleece but did see a 10 to 20 cent rise for all types with most focus on 19 microns with 3 to 5% VM. Merino cardings just kept their head above water with the MCI adding 1 cent to 628. Locks opened the sale 10 cents off the pace but built momentum on Thursday closing the sale in buyers’ favour with crutchings 15 cents up and stains in sellers’ favour. Crossbreds had a stable week, except for the finer types as 26s looked 15 to 20 cents cheaper with all other indicators unchanged to buyers’ favour.

The countdown to Christmas is well and truly on with only 4 sales to go. As far as wool to be bought and shipped nothing has changed as talk of “wool to be bought” is still on the radar and Viterra, who sat out of the market for 3 weeks, should be back to full buying capacity next week. We may well see another spike in the market over the next few sales, hopefully sooner than later, especially for the superfine growers who have wool in next week’s Newcastle sale. AWI reports the results of Woolpoll, 2012, should be made public in the next week or so with the voting results released to the board today. AWI convened an invite only forum yesterday discussing the proposed re-zoning of the OJD protected areas. With changes to come into effect on January 1^st the page 18 article in yesterday’s The Land has a lot of water to flow under the bridge before this controversial decision is ratified and all parties are happy with the final outcome. Next week’s sale could be a precursor as to how the market will finish the year off, hopefully an upward trend.                  

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

                Eastern 1013 cents é 10 cents compared with 08/11/12                                1.0384 ê 0.0029 compared with 08/11/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1037 cents é 7 cents compared with 08/11/12