WEEKLY MARKET REPORT

Week Ending 2^nd November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

A HICCUP BUT NO INDIGESTION

This week’s market finally took a breather as prices stalled under the weight of the largest national offering for the season so far (53,000 bales) - in fact the biggest since April 2011. In keeping with the big tallies Melbourne’s Thursday offering was the largest daily offering in 21 months (15,086 bales). October proved to be a good month for the wool market with the EMI climbing 108 cents for the month, making it the best performing month since January 2011. After a four week run of gains (adding up to a rise of 122 cents) since the end of September, everyone wondered when the market would run out of steam. Not that this week is a disaster - the EMI lost just 2 cents to 1046. A look at the last 8 sales has the indicator lifting 153 cents with small losses in sales 12 and 13 and this week combining for only a 20 cent fall, a positive move of 133 cents. The sale in Sydney actually posted a 1 cent gain on the opening day as subtle rises in the 18 and 19 micron ranges negated medium and superfine losses. The second day saw medium types lose 5 to 10 with finer microns in sellers’ favour. By the time the last lot was sold the only positive movers were the 17.5 to18.5 indicators, modestly gaining 5 to 10 cents. Most other indicators were in buyers’ favour up to 3 cents with 21s and 22 microns losing 10 cents.

Skirtings had a solid sale with no real change quoted. The market opened on a stable footing with 18 micron and finer a touch dearer as the broader burrier types quoted as fully firm. This trend continued on the final day except some 19 micron and finer lots under 4% VM irregular as buyers became more selective with their purchases. Cardings edged higher as crutchings remained solid all week with locks and stains adding 5 to 15 cents to lift the MCI by 6 cents to 625 cents. Crossbreds had an up and down week as the finer end, 25-26s, lost 5 to 20 cents as 28 to 32 microns barely moved up or down from their previous sales levels. This sector of the market now being above 20% of the offering.

Certainly nothing to panic about with this week’s “hiccup” according to most buyers on the show-floor. Grower resistance wasn’t evident as the national pass-in rate was under 7% with the only lots being passed in few and far between. The market now stands 14.5% (178 cents) behind the level 12 months ago with year on year offerings 50,000 bales lower - this stat definitely playing on the minds of buyers worried about quantity coming onto the market. The spike in the market really hasn’t drawn much wool out of in store storage (Sale 99). Maybe the next round of rises might draw a bit more onto the market. We open proceedings next Wednesday with 680 bales on offer, market unchanged??                  

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

                Eastern 1046 cents ê 2 cent compared with 25/10/12                                     1.0374 é 0.0010 compared with 25/10/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1075 cents ê 1 cent compared with 25/10/12