WEEKLY MARKET REPORT

Week Ending 22^nd August, 2014

AWEX Northern Micron Indices Comparison

GOOD RAIN – BAD MARKET

The market downturn that started last sale unfortunately continued this week as the drop in prices accelerated to have the benchmark AWEX EMI a hair’s breadth above 1000 cents, 1001 to be exact, a fall of 19 cents for the week. It seemed as though nothing could prevent this fall as credit and finance difficulties in China are rearing their heads again restricting their ability to trade and purchase wool. The small national catalogue of just 29,000 bales (4^th smallest in 12 months) couldn’t arrest the falling market on the Eastern Seaboard with Fremantle sitting out the week failing to place any buyers under quantity pressure as some may had hoped.

The opening day saw the largest falls as some better types actually found some support on the closing day to finish firm. Most microns took a hit in the order of 15 to 30 cents with 18 to 18.5s just in buyers’ favour with 16.5s finishing the sale in sellers’ favour due to a good selection on offer. Good premiums still exist for lots with the right specs as high mid-break lots continue to cheapen, discounting now in the order of 50 to 100 cents clean from a low mid-break type. We had a price gap of 215 cents (clean) between 2 lots, 0.2 micron and 0.2 VM difference, same style with one lot 84mm-43nk/t-mid break of 34 against 95mm-36nk/t-mid break of 89. This massive gap is hard to explain to growers. On the other hand, if your wool has the right specs the rewards are up to 120 cents-clean for 18.5 to 21s and up to 200 cents for the odd “best top-maker and superior” style finer than 18.5 - at last some recognition for “style” from the Europeans that the Chinese won’t reward growers producing these types.

Skirtings also bore the brunt of a retracting market but to a far lesser degree than their fleece counterparts. After an opening session that saw the low VM, 5% < lots just off the pace by 10 cents with the burrier types holding their ground,  the “B” fault lots (finer than 19 micron) gained 5 cents on the final day. Crossbreds are still feeling the absence of this sector’s main buyer, Chinatex, as prices gave up 5 to 15 cents. Cardings suffered the largest falls of any sector with both centres losing 20 to 30 cents for their MCIs. In the break-up, Lks fell 15 to 40 cents, Crs down 20 and Stains back 10 cents. The fall in Melbourne of 28 cents on Tuesday was their largest one-day fall of the MCI in 2 years. The indicators are about 100 cents lower than the dizzy heights of a year ago when they peaked in the 850 cent range.

Next week will see all 3 centres in action with 46,000 bales on offer. Don’t forget the National Ram Sale and Sheep Show is to be staged in Dubbo next week from Tuesday to Thursday. The Australian Supreme Ram will be announced on Wednesday night with the ram sale starting at 11.00 am on Thursday.

Main Buyers (This Week)

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

1001 cents ê19 cents compared with 15/08/2014                                  0.9297 ê 0.0003 compared with 15/08/2014

Northern Market Indicators (AUD cents/kg clean)

1017 cents ê19 cents compared with 15/08/2014