WEEKLY MARKET REPORT

Week Ending 23^rd January, 2015

AWEX Northern Micron Indices Comparison

PREMIUMS WHERE THEYR’E NEEDED

For the first time in five selling weeks the national offering fell below 50,000 bales. The last time we saw five consecutive weeks above this figure was over four years ago. The only conclusion one can draw from this is that less people are holding wool at this time of the year compared to last year as wool production is almost line ball. Whilst we’re into drawing conclusions, we might guess over the next month or so there might be a little less wool available compared to previous years.

The market this week continued last week’s trend of softening in the middle microns and a welcome increase in interest in the fine end - particularly where the specs were good. The best example of this we saw was from a Yeoval district clip of weaner shearing where the two main lines of 70mm/50 N/KT, 17.5 micron lots sold 130 cents above the indicator on the day.

Whilst the middle microns were a bit softer, again it depended on how well the wool tested. We had several clips from the north west of Dubbo that tested really well except for VM. With these we found that the discounts for vegetable matter were minimal as long as everything else tested well. A line from a clip up near Brewarrina carrying 3.0% of burr and 71mm but 55N/KT sold full tote to the indicator.

Crossbreds had a fairly quiet week for a change. Another major shift in currency is probably needed to move them one way or the other whilst cardings, both merino and crossbreds, continued their strong run. Short lamb’s wool of any micron is making other longer wool types of similar micron look ridiculous. If ever there was a year to shear lambs early to fit with management then this is it.

So the trend since sales recommenced three weeks ago has been fairly predictable. Wool types that fit the worsted sector (fleece and pieces) are affected by sluggish sales at retail level, hence currency, greasy stock levels and credit availability all impact directly on greasy prices. Wool types that fit the woollen sector (lambs wool, crutchings, locks etc.) are going gangbusters at retail level. These wools all go into knitwear for more casual garments in the high turnover fashion side of retail and this is directly reflected in the sale room. We see this trend continuing for some time with minor changes depending on currency, availability of greasy wool and shipping deadlines.

The micron price guide 5 year percentile rankings directly reflect this situation. 19 & 21 microns at present are trading at 37% of the five year average; 17 microns are even lower at 28%. Whilst merino cardings are trading at 97% of their five year average and 28 microns at 99%. There has almost never been a better time to sell crossbred wool and oddments of either type. One cannot accuse the auction system for masking demand signals at present.

On Saturday 21^st February don’t forget the Woolstore Open Day and Last Chance Ram Sale commencing at 11am. Over 15 studs will have rams for sale and display. Of particular interest will be a demonstration of a sheep auto drafter, the wool core line will run from 11-12 o’clock and, whilst lunch is served, our guest speakers will entertain you. Jimmy Jackson from AWI from my experience will be entertaining with his topic of finding emerging markets to compete with China. Jimmy is a Yorkshireman with a lifetime experience in the industry.

Next week a smaller offering of 38,947 bales should see a stable market. 

Ag Concepts Fwd Prices at 23 January, 2015

Main Buyers (This Week)