WEEKLY MARKET REPORT

Week Ending 2^nd December, 2016

AWEX Northern Micron Indices Comparison

NEXT FORTNIGHT’S VOLUME WILL DICTATE MARKET DIRECTION

The market continued on its merry way albeit at a steadier pace despite prices stalling late on Thursday. The AWEX EMI posted a 15 cent gain to 1378 (a 5 year high). The rise was similar in $US terms (17 cents to 1021). Buyer focus was on the excellent superfine selection in the last “designated superfine” sale of the year. 18.5 and finer lifted by 35 to 65 cents and, in some cases, up to 300 cents for the absolute crackers. The medium types (19 to 21s) were 5 to 20 cents better.

Skirtings continued to forge ahead <18 micron up to 4% VM added 50 to 70 cents with some isolated types dearer by 100 cents while 19s and broader (regardless of burr content) gained 20 cents. Cardings improved: all types in this sector 15/20 cents to the good and nearing January’s 10 year record level. Crossbreds look to have bottomed out as most indicators added 5 to 15 cents, bar 26 to 28s these finishing flat to buyers’ favour.

The market’s run has now extended to 10 days as the EMI has climbed 95 cents in that period - 1283 to 1378. Since the US election it has been a dramatic turn around when the market gave up 48 cents in the week before the election. Despite the rising market the pass-in rate climbed to 6.2% (the largest in 3 sales) this probably due to crossbred growers taking a stance against these levels and some superfine growers setting their sights too high. The recovery in the superfine sector has been a long time coming. The gap from 18 to 21 micron is now 300 cents, about where it should be and above the 10 year average of 250 cents, as prices for <18.5 get back to levels which are profitable.

Future’s trading was brisk early in the week with 113.5 tonne traded as far out to January, 2018 (19 mic @1510 for 5000kgs). The market may have reached a peak for the time being. The fall in Fremantle’s Indicator of 6 cents on Thursday could be a sign that buying urgency has slowed as the next 2 sales should see the anticipated offering of well over 50,000 bales each week giving them plenty of wool to pick from. Quantities have obviously become larger due to the rising market as some growers with wool on “hold” offer their wool to cash in on these good levels. Also adding to the quantity was AWTA November figures released, up a whopping 21% from a year ago as dry weather prevailed allowing shearing to catch up. Issues have emerged around the Chinese annual CSQ (country specific quota) as many mills are fulfilling this year’s quota. Year–on-year demand is better as prices are 10% higher in an offered volume of 1^st hand wool that is >6.2% as the demand is coming from the recovering weaving sector that requires longer (fleece) types.

Ag Concepts Fwd Prices at 2 December 2016

Main Buyers (This Week)