WEEKLY MARKET REPORT

Week Ending 21^st February, 2014

AWEX Northern Micron Indices Comparison

A SMALL RECOVERY – BUT WILL IT LAST?

After eight straight days of losses, we finally had a reversal of fortunes in the wool market. This recent run of falls was the longest in 10 months totaling 69 cents from a high of 1134 in the last week of January to Wednesday’s low of 1065. Talk on the show-floor that the bottom of the market was near late last week looked as if no-one knew when the market would reach the bottom as Melbourne sold on Tuesday to losses of 20 to 30 cents for 19 to 23s. With the three centres on line, Wednesday saw more falls as 25% of the offering was passed-in. New Zealand Merino, who now sells every 4 weeks in Melbourne, copped a hiding as 48% of their selection (2,800 bales) failed to sell. Woolgrowers across the ditch must be as frustrated and disappointed with price levels as their fine-wool counterparts here as 44% of their offering were re-offers with just the very best types attracting solid premiums. The recovery we had hoped for finally came on Thursday as solid gains were the order of the day in all three centres. By week’s end the EMI had lost 14 cents (to 1074) as the AUD$ finally fell below 90 cents US for the first time in 9 days - this certainly a help to the market. Finer types, <18 micron, were least affected dropping 5 to 10 cents. All other indicators fell 10 to 20 cents. The disparity of prices between the best and worst types in the same micron continues to grow. A spread of 40 to 80 cents is now common between sound and tender, fnf and burry and heavy colour and good bright types. The Fleece pass-in rates averaged 20% with growers still resisting the falling market as withdrawal rates climbed to 17% in the fleece sector - this number the largest in 5 years.

Skirtings weren’t immune from the negative sentiment as losses of 20 to 30 cents early in the sale failed to gain any traction like fleece types on the final day, but were quoted as “firm”. Cardings took a hit early in the sale as all types gave up 5 to 10 cents but remained solid on the final day with both MCIs on the Eastern Seaboard still above 800 cents, a 50 cent rise from a year ago. In line with the rest of the market, the crossbreds came under price pressure as 10 to 20 cent falls were common for all indicators bar 32s, in sellers’ favour. Again Melbourne had the bulk of the XB selection (30%) of their catalogue with crossbreds making up 23% of the Sydney selection.

The final designated Super-fine sale of the season will take place in Sydney next week. We had a taste of what was to come this week as the Picker Bros. and Wayne Krause from Bigga offered 3 bales from 11.4 to 14.9 micron, but all 3 were passed-in, the finest for 100,000 cents and a 12.1 micron bale reaching 21,000 without selling! Buyers would be hoping the New England growers haven’t set their sights that high.  The market could be firm to sellers’ favour.

          Ag Concepts Fwd Prices at 21 February

Main Buyers (This Week)

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

        1074 cents ê 14 cents compared with 14/02/2014                        0.8941 é 0.0007 compared with 14/02/2014                        

        Northern Market Indicators (AUD cents/kg clean)

        1090 cents ê 18 cents compared with 14/02/2014