WEEKLY MARKET REPORT

Week Ending 21^st October, 2011

Northern Micron Indices Comparison: Source of information: AWEX

SLOW START, PROMISING FINISH

Yet another fall in the market as the AWEX EMI fell half of last week’s losses, just 2 cents to 1158 cents. What was encouraging was Thursday’s turn around in sentiment as gains were posted in all three centres with emphasis on Melbourne and Fremantle (up by 15 cents) to see their indicators rise slightly for the week to stop proceedings from being a bad week to “only just”. Fine wool growers didn’t find any relief to the falling market in Newcastle as 18.5 and finer fell 10 to 35 cents - this being a vast improvement on the previous four week’s sizeable falls. In fact, all indicators were lower as 19 to 20 micron fell slightly (up to 5 cents off) with 21s 15 cents down. Once again, the very stylish Newcastle catalogue, of which 78% of the adult fleece portion measured 38nkt or higher, couldn’t prevent a negative market but with Thursday’s rally one can only hope we are at the bottom of the market, if not very close. Thursday’s rise of 10 cents was the biggest one-day rise for 6 weeks! Only two lots were assessed as 1PP with two other lots at 14 micron selling over 3,000 cents. Talk of an “empty pipeline” and the market ‘at its bottom’ is encouraging but when this relates to a dearer market is the subject of much debate. Talk of a revival post Christmas is good, but a market on an upward trend before then would be most welcome.

Skirtings gained momentum as the sale progressed on the back of a “cracker’ of an offering to finish dearer for the week across all style and vm ranges. Some of the exceptional style, low vm and superfine lots were quoted as “extreme” making close to some fleece prices. Some heavy cott and jowl lots in Melbourne were out of favour but only lost 15 cents on previous week’s quotes with all other descriptions, as in Newcastle, put 30 to 45 cents onto their values. Cardings fell on the opening day and failed to recover any of the losses to finish 11 cents down for the week to leave the MCI at 733 cents. Despite the superior offering, locks in the 18 to 20 micron led to the falling indicator losing 10 to 20 cents with stains and crutchings solid all week. The minute crossbred selection in Newcastle (4.5%) left these almost neglected as a lack of volume and orders saw a 10 to 15 cent loss for most types.

Attention shifts back to Sydney this week as buyers will compete for 41,000 bales nationally. We can only hope that the good market from Thursday continues on. Even with the fundamentals of tight supply and strengthening demand from China, with this situation not about to change soon, the European debt crisis still hangs heavy over the market, hindering confidence. The key to all commodity markets is confidence and this is sadly missing in Europe.   

Agrisk FDIC Indicative Quotes 21/10/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1158 cents (ê 2) compared with 14/10/11                 1.0189 ê 0.0014 compared with 14/10/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1191 cents (ê10) compared with 07/10/11