WEEKLY MARKET REPORT

Week Ending 20^th November, 2015

 AWEX Northern Micron Indices Comparison

UP … DOWN … SIDEWAYS!

The three selling centres that operated this sale saw 3 different results to leave all and sundry scratching their heads. Sydney was unchanged, Melbourne lost 4 cents and Fremantle added 7 cents to its indicator. The benchmark EMI lost 2 cents to 1249 cents (still 20% - 202 cents - higher than the same week last year) and, in US$ terms, we saw a rise by the same amount, 2 cents to 896. Interest was high early in the sale only to fade on the final selling day. Signs were good early in the week as the stand alone NZ offering was met with good competition on lots with good specs. Keen bidding from the 3 major exporters and an indent buyer saw a solid market in the middle of the sale only to cheapen up on the last day as 2 of the major exporters pulled back their buying intensity on the final day. Exporters looked to have a far more measured approach buying this week, chasing specific types in limited volumes only to complete commitments not filled.  

We sold on Wednesday and caught the best of the market with a few nice lots from Cargo and Mudgee fetching up to 20 cents better than their indicators. The highlight was from a clip north of Warren with 3 short (70 to 75mm) sound lots making 40 to 60 cents above expectations. Another lot in this clip with a strength reading of just 17, 2.9% VM and a mid-break of 91 made within 20 cents of a sound, FNF low mid-break type, virtually no discount.

Skirtings seemed to escape the hiccup that the fleece room had. All micron ranges with <3% VM added 10 cents to their quotes while 5% VM types in the 18/19 micron range were in sellers’ favour with all others rock solid. This sector is still returning growers great results as the growers from Cargo and Mudgee gained over 900 cents for BKN and 800+ cents for BLS. The client from Warren averaged 650 cents for his BKN averaging 8% VM. The carding sector was the best performing sector of the sale.  All 3 centres’ MCIs are within 4 cents of each other, 1087 to 1091, closing in the 1100 cent mark. All types in this sector moved upwards by 10 to 30 cents. The largest XB offering in Melbourne since February (5346 bales, 26% of their total) seemed to weigh heavily on the market as most types gave up 10 to 15 cents in both Eastern seaboard centres - the XB selection about 25% of the catalogue in Sydney. Growers weren’t fazed with the slight fall in prices clearing 95% - again a fair indication of the good level of prices.

Most of the talk on the showfloors this week was shipping delays and the season’s Chinese import quota running out. The Christmas recess and impending Chinese New Year holiday is creating shipping movement dramas and wool arrival at its destination tricky (maybe a reason for the fall on Thursday). Currency shifts also had a detrimental effect late on Thursday as the $AU jumped to 72 cents as the $US weakened as conformation of a rate rise in the US in December (their first for almost 10 years) is creating uncertainty in global stock markets. Iron Ore has hit a new low of $US45/ tonne as Chinese steel mills slow production to counter heavy losses with industry experts predicting a price of under $40/tonne by Christmas. Uncertainty in commodity markets makes stock markets nervous and big up and down swings become the norm and send exchange rates into erratic movements, some economists forecasting the $AU to move on an upward cycle to 80 cents in 2016. This will have a big impact on the wool market if this comes to fruition.

Next week we sell early on Thursday, hoping the market can hold its ground.

  Main Buyers (This Week)