WEEKLY MARKET REPORT

Week Ending 17^th January, 2014

AWEX Northern Micron Indices Comparison

MARKET TAKES A BATTERING

The wool market didn’t perform anywhere near as good as we had hoped as the market succumbed to pressure from large quantities, high exchange rates and local wool in China hitting their market in bigger volumes than anticipated. The projected national catalogue of 60,000 bales didn’t eventuate (under 54,000 offered, with 6000 bales withdrawn) the largest in 12 months,  but the damage had been done with the news of large auction  quantities in Australia reaching lack China and a perception of “plenty of wool around” and no real reason to rush in and ‘PANIC’ buy.

 With all this weighing on the market, one buyer reported to us that after offering a wide range of types last Thursday night, they did not receive a single bid on any type of merino last Friday.  This lack of business led to sharp falls across the board early in the week but the market did stage somewhat of a recovery on Thursday due to a weaker currency, down to 88.10 - a 3½ year low, from 90.35 on Tuesday and a forecast of mid 40,000 for the next few sales. The EMI fell 20 cents to 1,111 as 18 to 23s lost 20 to 30 cents with the finer types 10 to 20 cents lower. The recovery was felt the most in Fremantle as a 21 cent jump on Thursday saw their market suffer losses of only 5 to 15 cents for the week with their regional indicator at 1157 - way out in front of the indicators on the Eastern Seaboard. This rally in the West augers well for the fortunes of next week’s market, with some buyers fielding good enquiry overnight.  The “off-types’ took the brunt of the falls, up to 50 cents, but again we had some fleece lots making up to 30 cents better than the indicators, close to (or even better than) last sale’s levels. A great result considering the falls early in the week.

Skirtings had a tough sale, with the pattern of movement mirroring the fleece room. Sharp falls early in the week were replaced by a solid market on Thursday, resulting in most types and descriptions across all VM levels giving up 25 to 30 cents for the week. Cardings gave up most of last sale’s gains as locks and crutchings lost 20 cents with stains 10 cents off last sale, but did close the week on a solid basis. The 2^nd biggest Crossbred catalogue of the season-11,600 bales(22%) - was on offer this week and held up reasonably well with Melbourne’s catalogue containing  30% crossbred. Most movements were either side of unchanged, but 25 and 26 micron in the south did suffer 25 to 35 cent reductions in price under the weight of volume.

A tough sale, but we were the beneficiaries of a rebound in the market on Thursday. The much anticipated rise in the market has yet to happen, with many brokers scheduling wool for sale in the next few weeks having to rethink their selling strategies, hence a big withdrawal rate this sale and next week. Plenty of talk that the market will stage a recovery sooner rather than later and growers punting on a dearer market may in fact be rewarded with higher prices. The quality of the clip is just hanging on and buyers are paying above market rate for types that fit exactly into their orders and meet, in some cases, very strict specifications.

Next sale will see a national catalogue of 47,000 bales, a reduction of over 6000 bales to what looks like a keener buying trade and favourable exchange rate. We sell next Wednesday; let’s hope it’s raining cats and dogs by then!         

Main Buyers (This Week)

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

  1111 cents ê 20 cents compared with 10/01/2014         0.8813 ê 0.0065 compared with 10/01/2014                        

  Northern Market Indicators (AUD cents/kg clean)

  1133 cents ê 19 cents compared with 10/01/2014