WEEKLY MARKET REPORT

Week Ending 23^rd August, 2013

AWEX Northern Micron Indices Comparison

SAVED BY THE DOLLAR

Our “bold” prediction of an unchanged market wasn’t looking so good early in the week as most buyers forecasted a softer trend in the fleece room and skirtings, cardings and crossbreds to continue on their merry way up the price ladder. Had it not been for the favourable currency shift to below 90 cents from almost 92 on Wednesday night, this may have been the case.

The market had a lacklustre start to the two centre series as Fremantle sat out the week due to lack of quantity. AWEX put the EMI down by just 1 cent as 19s in Melbourne and 19 to 22s in Sydney lost up to 10 cents on the opening day. The finer indicators were in sellers’ favour up to 5 cents helped by the 800 bales of stylish super-fine New Zealand wool offered in Melbourne. The southern buyers were still keen on these types on Thursday to see ultra-fine types make good gains. The drop in the exchange rate put buyers on the front foot on Thursday as all fleece indicators in both centres posted gains of up to 10 cents. The EMI finished the sale 4 cents higher at 1012 cents - the only negatives being in the 17.5, 19, 21 and 22 micron indicators giving up 5 cents.

There was some price difference in similar types as we saw a 50 cent clean gap between two lots of 18.5 and a 20 cent premium for a 20 micron lot over another identical type and just a 5 cent gap between two weaner lots at 17 micron with NKTs of 27 and 36!  Some other lots saw no discount for colour or VM - hard to work out buyer’s thinking.

As we stated earlier, the Room 2 selection goes from strength to strength. Skirtings opened the sale on a solid note and followed the fleece movements to increase in value by 10 cents regardless of style, VM or description on the final day. After last sale’s breather, cardings rallied again this week as all descriptions added 10 to 20 cents to see both MCIs post double digit rises to new record levels. One lot of locks made 576 cents, 9 cents more than that growers Bls!  Crossbreds posted modest gains as the finer indicators were flat with 30 micron and broader rising up to 10 cents. Two areas of real gains are the Dorset and Border Leicester types with their fleece lines now making in the 250 to 320 cent area.

Optimism is buoyant amongst buyers and traders as most predict a solid to rising market as we move into the Spring selling season. Next week sees the first real volume of super-fine wool offered from Newcastle, 2800 bales. All eyes will be on the Italians as reports coming out of Europe indicate an end to the recession as the GDP figure was at last a positive number in 17 member countries of the European Union, thus ending 6 consecutive quarters (18 months) of negative growth. The US is also continuing its economic recovery giving speculation that the Federal Reserve may wind back the volume of money it prints, a staggering $85 billion/ month. This good economic news from the northern hemisphere augers well for an increase in demand and a lift in prices.

The ram selling season is almost upon us as the National Ram Sale and Show is held in Dubbo next Tuesday to Thursday. Various studs have been holding open days and will commence on-property sales from early September. Fremantle is back on line next week as the national catalogue of 41,500 bales should see an unchanged market.

                                                                                                                                                                                     Fwd. Price Trades W/E 23 August, 2013