WEEKLY MARKET REPORT

Week Ending 22^nd March 2013

AWEX Northern Micron Indices Comparison

         THINK WE FOUND THE BOTTOM

It’s been a disappointing couple of weeks with this week following on from last week and falls across nearly all categories. Unfortunately it has been the fine wool indicators that have shed the most with 18 microns losing 76 cents over two weeks; 17 microns have lost 64 cents; 19 microns 59 cents; and twenty micron 49 cents clean. The trading range for the middle micron merino types has been no more than 50 cents for over two months and we have seen the highs and lows of that range over the last four selling days.

Merino skirtings and crossbreds have been much less affected with more modest falls whilst the carding indicators have traded almost unchanged. The EMI over the two weeks of selling has lost 36 cents.

The good news was that by Thursday this week it appeared to have stalled or at least found a bottom, which is what we have been told would happen by some of the major exporters. Their view for weeks has been that supply and demand are in reasonable balance and it would take something more than minor currency movements to change the dynamics of the market. So whilst weekly offerings for several weeks are in the high 40,000s to low 50,000 bale weeks (which they have been for weeks) then there was no reason for the market to rise. What apparently has happened in China is that some stocks of greasy wool either held in bond stores or by traders were released into the market causing our market to take a step backwards. We believe there is no cause for panic and that enquiry has been good, particularly for May shipment which leads us to believe that after Easter should be OK.

Wool buyers this week were keen to discuss the woolbrokers Buyers’ Service Charge, ie the charge we levy on buyers for buying from our catalogue. The reason for this was that Landmark and Elders just announced their new Dubbo charge and both are around $6 a bale higher than us. They state that they factor these differences into their pricing and pay more for our wool than those that are considerably higher. It is worth mentioning they said that both Western Wool and AWN are even higher again.

What is also worth mentioning is that the growers who jumped on the January spike and sold forward are looking good, and about 50-60 cents above current prices. We have many orders sitting there not traded with some of those orders looking a bit optimistic at present. The big message here is that good prices can be locked in, but it is important to be ready to move quickly when there is a spike in the physical market.

Having depressed you all with talk of a low point in prices a quick glance at bale averages this week should perk you up! The range of clip averages on typical merino clips from the central west was between $1500 and $1700 per bale and typical western division clips averaged from $1100 to $1350 per bale.

Next week we will offer just over 1000 bales on Tuesday with a national offering of 46,000 bales. There will be a one week recess after Easter where sales will then recommence and sell weekly until the second week of July. Quantities are sure to tail off during April and May as the effects of the dry spring/summer bite.

Ag Concepts Fwd Price Trades W/E 22 March, 2013

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

1081 cents ê 16 cents compared with 15/03/2013                               1.0379 é 0.0011 compared with 15/03/2013

Northern Market Indicators (AUD cents/kg clean)

1102 cents ê 17 cents compared with 15/03/2013