WEEKLY MARKET REPORT

Week Ending 18^th November, 2011

Northern Micron Indices Comparison: Source of information: AWEX

NEWCASTLE UNDER PRESSURE

The wool market again suffered from a nervous Northern Hemisphere mood, wracked with worry over the sovereign debt crisis in Europe and the ability to repay without triggering another global recession. With the implementation of new measures in Italy to repay debt, following the appointment of a new Prime Minister, the true extent of their debt came to light. The debt is in the order of 2 Trillion Euro - doubling most previous estimates. This amounts to more than Greece, Spain, Portugal and Ireland combined! With this cloud of uncertainty around, the market recorded double digit falls on both days in all three selling centres. The 2.4% fall in the EMI equated to a drop of 29 cents to see it under 1200 cents again and 38 cents under its most recent peak in early November. Fine microns took the brunt of the falls with 18.5 and finer giving up 50 to 90 cents. The medium and broad types were not as adversely affected falling 25 to 35 cents in the 19 to 23 micron ranges with the broadest types just 10 cents down. Even with the falling market some good results were obtained. One 19 micron lot with 1.7 VM and 27nkt made 1462 cents clean with the indicator at 1438. An FNF, 17.1 and 47nkt line made 1700 cents clean with the indicator at 1681. Some of the burry and tender lots were more keenly sought after than their sounder FNF counter-parts as some orders with 1.5 VM minimum are struggling to be filled with large volumes of FNF types coming through the auction system.

Skirtings were unable to sustain their good run of rises over the past month. The opening day just held their ground with 20 microns easing 20 cents. Most falls occurred on Thursday as 19 micron and finer (under 5% VM) slipped 20 to 30 cents with the broader and burrier lots holding their ground. Cardings bucked the negative trend with all types and descriptions in sellers’ favour to lift the MCI by 2 cents to 727. Crossbreds again suffered under the weight of volume as 28s and finer lost up to 10 cents with the 30 micron and broader categories 15 to 20 cents lower.

Even with European debt worries, talk of a recovery in the market is common on the show-floor. Whether this happens pre or post Christmas is hard to pick, but some are talking a rise of some sort either side of the New Year. Newcastle will hold its final sale of the year next week with any sort of price rise for the finer types a long shot. This sector of the market has taken the biggest hit over the last 3 months and any substantial rise would be most welcome. But even with a softer exchange rate most woolgrowers will drive back up the New England Highway disappointed with their prices. 

                                                                   Agrisk FDIC Indicative Quotes 11/11/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1190 cents (ê29) compared with 11/11/11                                   1.0110 ê 0.0030 compared with 11/11/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1232 cents (ê29) compared with 11/11/11