WEEKLY MARKET REPORT

Week Ending 22^nd February 2013

AWEX Northern Micron Indices Comparison

         AN EACH WAY BET

The encouraging finish to last week’s market translated into some very solid rises on the first day of selling in Sydney with middle micron indicators rising 20-30 cents, and then losing most of it the next day. 20 microns, for example, rose 25 cents on Wednesday but lost 21 cents on Thursday to finish just 4 cents in positive territory. Whilst all the middle microns ended the week with pluses; the same couldn’t be said for the languishing fine wool market. An ominous sign for next week’s final, last ever Newcastle sale.

Fortunately for us, we were rostered on the first day and had a great sale with an almost 100% clearance. Not surprisingly, as the bulk of our fleece offering are middle micron types, these all sold well. But it was some of the Room 2 lines that were the standouts. Cardings have been very strong for some time, but crutchings from the Coolah district this week made up to 748 cents greasy (1177 clean) or $1386 a bale! These were unpicked and carried light stain.

Crossbred lambswool has also exceeded itself in recent sales with 50mm lines around 25 micron making close to 650 cents greasy. The broader end of the X-bred sector, 27 micron and coarser, has done little but finer than that has seen good gains and strong competition from Chinese and local scourers and carbonisers.

As usual competition came from China, China and China but it was local traders and their stock positions which once again caused the shifts in the market. From what we could gather, and looking at the buyers lists on each individual day, it is obvious this week that one company early in the week made a strong push for middle micron merino wool. Other buyers were a little perplexed as they felt nothing had changed. So on the first day some followed, but weakened as the day went on and on the second day the previous day’s leader dropped to number four hence the decline on Thursday.

One buyer commented to us today that he felt that supply and demand are reasonably well balanced at present and with offerings being fairly predictable and demand constant we could expect the market to trade in a 20-30 cent range around these levels.

From time to time we will see one of the major trading companies make a move for whatever reason; could be their own stocks get too high, could be they have taken forward positions they have to cover, or just a hunch. But there are five or six local non-Chinese traders who supply China and can influence the market on a weekly basis.

Back to Newcastle - for some it will be a sad day next Thursday when the curtain comes down on the iconic superfine selling centre. For many, they are quietly relieved as time has moved on and it has been seen as a disruption to orderly marketing. The Italian buyers are not at all happy with the closing of Newcastle and neither would be a large section of New England growers. Reunions and dinners are planned and I’m sure there will be a few hangovers in the sale room on Thursday. 13,015 bales will be offered there with 47,636 bales to be offered nationally.

      Ag Concepts Fwd Price Trades W/E 22 February

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

1119 cents é  2 cents compared with 15/02/2013                                          1.0240 ê 0.0122 compared with 15/02/2013

Northern Market Indicators (AUD cents/kg clean)

1146 cents é  2 cents compared with 15/02/2013