WEEKLY MARKET REPORT

Week Ending 24^th June 2011

Northern Micron Indices Comparison: Source of information: AWEX

A TOUCH HIGHER AGAIN

The market rose fractionally again to defy most pundits’ predictions of a softer trend. A 6 cent rise in Sydney and Melbourne equated to a 5 cent rise for the EMI to 1,436 cents. The market split in two directions as 19.5 and finer fell up to 18 cents while the broader types from 20 microns out continued their great run to add 5 to 15 cents. The rise of 6 cents in Sydney did surprise us as only very few FNF lots seemed to hold their ground on the opening day, with burrier fleece lots looking cheaper. Although AWEX could not find any cheaper lots in their quotes and left all indicators unchanged, bar 22s - up 1 cent and 18s back 9! The second day saw most movements as falls of 7 to 18 cents for 19 and 19.5 were negated by good increases for middle micron lots. The market in Melbourne was even more erratic as an excellent selection of sub 17 micron types saw an 88 cent rise for 16.5s with 18.5 dropping 29 cents. Their indicators moved in two directions as finer lots under 18 lifted; 18.5 to 19.5 fell 15 to 25 cents; with 20s and broader gaining up to 20 cents.

Skirtings also tracked the fleece room’s direction as the better style and good colour lots under 4% vm were keenly sought after and increased in value to the tune of 20 cents. The burrier pieces and bellies carrying over 8% vm tended to sell in buyers’ favour with the odd lot dearer that contained little cott, jowl and colour. Once again, the small selection that did contain heavy cott and jowl were discounted again with only very little interest in these lots. Cardings posted solid gains for the third week in a row. Locks and stains recorded 20 cent rises while crutchings were quoted up by 10 cents. The MCI has now added 89 cents in the past four weeks after hitting a low of 742 cents in late May - a great recovery! Crossbreds also added to their values with an average rise of 13 cents. The sudden drop off in supply over the past few weeks has certainly helped their cause.

For the second week in a row, Don Macdonald & Co. has dominated offerings in Sydney. After having the second biggest catalogue last week behind Landmark, this week’s 1462 bale catalogue was the largest, a great achievement since our first sale in early May. The market, despite talk of a cheaper trend and Chinese bids at 20 to 30 cents below the market, continues to break records. This week’s 22,000 bale national offering is the smallest two centre sale in 2 years with the last three weeks averaging just 23,600 across the country. Fremantle sells again next week with the last sale of the financial year to be held followed by two sales in the first two weeks of July before the three week recess with national offerings to average 33,000 bales. With futures trading higher (coupled with small quantities) it’s hard to see the market not remaining at these levels or, dare we say, even better.                   

AgRisk FDIC Indicative Quotes 17/06/11,

MAJOR AUCTION BUYERS (Bales)

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

         Eastern 1436 cents (é3) compared with 17/06/11                              1.0548 ê 0.0026 compared with 10/06/11

        Northern Market Indicators (AUD cents/kg clean)

         Northern 1491 cents (é3) compared with 17/06/11