WEEKLY MARKET REPORT

Week Ending 15^th January, 2016

AWEX Northern Micron Indices Comparison

                                                               FLASH IN THE PAN …??

It seems the three week recess couldn’t finish quick enough as buyers were keen to secure wool from the outset in Melbourne on Tuesday. With the build up of wool over the break and large offerings in the first fortnight of the year (115,000 bales) opinion was divided as to how the market would open. The A$ rose to over 73 cents in the last week of December but, as turmoil in global stock markets greeted the new year, currencies fell against the US$ and two suspensions of trading on the Shanghai stock market sent shockwaves around the world as to how long it would take the world economy to finally shake off the lingering effects of the GFC. Our currency fell to below 70 cents, this being the catalyst for the market to open to a dearer trend.

A look at the above table shows good increases of 20 to 35 cents for all microns (some better types up to 50 cents higher) and the lower spec types closing the gap on their more fancied counterparts as buyers were keen to secure quantity early in the sale. Buying urgency had dissipated by Thursday to see a softening for fleece types by 10 to 20 cents as the large offering had stretched buyers’ finances to the limit.

Skirtings escaped Thursday’s fleece hiccup as the opening days advances of 20 to 30 cents for all types and descriptions was maintained till the final lots sold on Thursday. Cardings continued on their merry way as the 3 centre’s MCIs are all well into the 1100 cents range (1123 to 1140) all adding 15 to 25 cents. Stains and locks performed the best recording 25 to 30 cent gains while CRS rose by 10 cents. Despite the favourable shift in currency crossbred took a backward step due to the big quantity (30% of the total eastern seaboard selection), 33% of Melbourne’s total. This was the biggest XB offering in 12 months with most microns falling 10 to 20 cents.

Global stock markets worst start to a year in 80 years along with key commodity prices at poor levels and the uncertainty about China’s ability to maintain economic growth over 5% is weighing heavily on currency movements. The US economy is continuing to grow at a good rate as the rest of the world could be described as “sluggish” at best. Currency shifts do affect the market as this week proves, despite the stock markets’ turmoil and China’s uncertainty. Next week’s offering of 60,000 bales will test the market - the largest sale in 5 years.

Ag Concepts Fwd Prices at 17 January, 2016

Main Buyers (This Week)