WEEKLY MARKET REPORT

Week Ending 18^th January 2013

AWEX Northern Micron Indices Comparison

          REALITY CHECK

After last week’s good opening sale, some-what of a reality check would best describe this week’s outcome. Faced with the largest national offering for over 12 months (58,000 bales) and a currency still hovering at 105 cents, uncertainty as to where the market would go had all and sundry nervous about the sale. It is hard to recall last week’s scenario when all fleece indicators from 16.5 to 24s gained around the same values - 42 to 54 cents - a gap of just 12 cents. Normally finer indicators gain more than the medium wools; last week’s even gains looked too good to be true. This was exactly the case as the market split in 2 as finer wools built on their momentum from last week as 18 micron and finer added 20 to 30 cents. Medium types couldn’t sustain last sales good run and weakened from the opening bell. 19 to 21s gave up 20 to 30 cents while 18 and 22s were back 10 cents. The pass-in rate more than doubled to 8.3% as the fall in the medium types caught a few by surprise. The turn-around came late on Wednesday in Fremantle as their pass-in rate was 17%.

Room 2 lots fared better as an opening day increase was negated by a final day’s easing to see skirtings up by 10 to 20 cents. Cardings recorded good gains for the second sale in a row - the indicator adding another 25 cents to 729. All types and descriptions posted 15 to 30 cents as a few lots of low VM crutchings made well over 500 cents and locks selling for low to mid 400 cents. Crossbreds also ended the sale dearer as 28s and finer looking 10 cents higher as 30 microns were unchanged and the broader types (32s) off the pace by 5 cents.

Don’t forget our Wool Store open day and Last Chance Ram Sale is just 3 weeks away, Sat.9^th February. We are pleased to have as a keynote speaker Rob Langtry from AWI. Rob is the Chief Strategy and Marketing Officer for AWI. Rob has held this position for 6 years and oversees the implementation of business and marketing planning and strategy. Some of you may have heard Rob speak at the recent AWI grower meetings around the bush. He has extensive experience in Asia, Europe and the USA and is well worth listening to.

Just when the market looks like being on a roll, something seems to put a spanner in the works. Although the fundamentals haven’t changed, it looks nearly impossible for the market to go on a sustained run for more than a week or two, even three. According to show-floor talk, Viterra and Queensland Cotton need to buy wool, but have not necessarily sold their “stockpile” on to mills in China. This tactic could see the market stagger over the next few weeks then strengthen as we celebrate the Chinese New Year! Traditionally that period can be dicey to sell wool, but quantities will drop to mid 40,000s over the next few sales, hopefully kicking in the old supply and demand situation. We sell on Wednesday with a catalogue of 750 bales - a steady market might be the best outcome. Finally our thoughts are with all our clients up at Coonabarabran. Some have lost pasture, but to date, no stock losses or dwellings lost.       

                             Ag Concepts Fwd Price Trades W/E 18 January

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

1105 cents ê  6 cents compared with 03/01/2013                                       1.0514 ê 0.0032 compared with 10/01/2013

Northern Market Indicators (AUD cents/kg clean)

1132 cents ê 39 cents compared with 10/01/2013