WEEKLY MARKET REPORT

Week Ending 18^th October, 2013

 AWEX Northern Micron Indices Comparison

STEADY AS SHE GOES!

It was a nervous week as all eyes were on the US as a resolution on their debt ceiling crisis seemed to be in doubt up until the final hours. In the end, sanity prevailed and the real possibility of global uncertainty and a stalling of economic growth in the Northern Hemisphere look to be averted for the time being. The Chinese are always looking for an excuse to force the market down and this could have been the catalyst to send the market backwards.

The market did cheapen up a bit as all major currencies strengthened against the $US - the $A now entrenched well above 95 cents, a lift of 5 cents since early September. The rising exchange rate finally caught up with the market as the EMI lost 14 cents - exactly half of last sale’s rise. The anticipated ‘solid to dearer’ market faded as a resolution in the US went down to the wire and buyers became more and more nervous. Both days recorded similar losses as 19 to 22 micron lost 20 to 35 cents with the finer sector a beneficiary of a designated “Super-fine Sale”; as 17 to 18.5 gave up 10 to 15 cents and finer than this improving up to 20 cents. There were several 1PP types on offer with a top price of 13,000 cents for a bale measuring 12.7 micron, 0.1 vm and 73.3 yld with a length of 73 mm and 41 nkt. The EMI sits at 1113 cents and 1062 cents in US terms - a modest rise of 2 cents due to the rising exchange rate. In an encouraging sign for next week, the market did seem to rally late on Thursday with Fremantle’s indicator lifting by 5 cents. Competition was good in our catalogue as quite a few of our fleece lots made up to 20 cents better than the indicators.

Very little movement in the skirtings as a minor movement in the finer, low VM (< 3%) lots of only 10 cents was the only adjustment buyers made to their quote sheets all week as some burrier types, 3 - 6% VM finished in sellers’ favour. This sector of the market still returns great value: Coonamble pieces 660, Cobar pieces over 550 and carbonising bellies (>15% vm) making over 400 cents. Cardings continued to improve as low VM locks and crutchings added 10 cents with stains remaining solid for the week and carbo locks 10 cents back to see the MCI lift by 4 cents to 829, bucking the other two centres falls of 10 cents. Crossbreds made up 15 % of the offering on the Eastern Seaboard but the market withstood the increased volume as most descriptions posted gains of 5 to 10 cents.

A reasonably good outcome considering what might have been had the US not come to a favourable decision. National volumes look to be in the mid to high 40,000s for the next few sales, allaying any fears of “too much wool” hitting the market at the one time. Please take time to open and read the attachment to this weeks report. It makes for good reading and something to think about for next year’s clip.

      Fwd. Price Trades W/E 18 October, 2013

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

1113 cents ê 14 cents compared with 11/10/2013                          0.9541 é 0.0133 compared with 11/10/2013

Northern Market Indicators (AUD cents/kg clean)

1131 cents ê 13 cents compared with 11/10/2013