WEEKLY MARKET REPORT

Week Ending 25^th January 2013

AWEX Northern Micron Indices Comparison

     FINALLY NEWCASTLE GOES

The market this week continued the trend which began last Thursday. The middle microns felt the pressure early on whilst fine wool and cardings held steady. Apparently the reason for this retreat of main China types, being 19.5-22 micron, was that a major topmaker in China dumped greasy wool into the domestic market to ease a cash flow problem at a discount of 30-40 cents to last week’s quotes. Added to this were a couple of major Australian traders (also in China) attempting to make sales slightly under the market. Co-incidentally, both those companies were major buyers this week.

Although there were small losses in most categories - especially fleece types - the promising aspect was that, after the close in Syd/Mel on Thursday, Fremantle posted good gains indicating a solid start to next week.

Our sale on Wednesday reflected the easing with the middle microns but overall it was a good sale with some very good results on certain types. The carding sector in particular stood out with some low vm lambs, crutchings and stains fetching very good prices and embarrassing the valuer. This was not restricted to the merino sector as XB lambs and oddments saw good competition. The major carding buyers being Michell (Australia), Reward (Taiwan), Techwool and Fox & Lillie (China and domestic), were all very active and going head to head.

The Room 1 catalogue was dominated by Viterra who seem to be back with a vengeance after a few months on the sideline as they purchased 31.8% of the national merino fleece offering. Added to this Dalgety Wool Exports (soon to be both under the same umbrella) ran second for the week purchasing 8.2% of fleece types. One suspects that with smaller offerings over the next few weeks they are building a stock position to sell into as the market rises after Chinese New Year, which is the tip we have been hearing.

On the local scene, the news this week that Newcastle will close as a selling centre was mostly met with joy as AWH announced that they were unable to secure showfloor space at a reasonable rate to hold the five sales. The fat lady hasn’t sung yet though as we haven’t seen an acknowledgement by the individual brokers that they are happy to walk away. But most buyers are cheering that Newcastle wool will be offered in Sydney and non Newcastle sellers like us will also offer in those weeks hence evening out the offering.

On a more local scene, here in Dubbo, we see that AWH (the warehouse agent for Landmark & Elders) have taken a lease on the Ex-Lanoc Wool premises. This move doesn’t really surprise me as I felt Bathurst was the wrong place to centralise western NSW wool. I guess it just took 12 months for the two parties to agree on the rent!

Next week a smaller national offering over two days of 43,000 with Macwool to offer 867 bales on Thursday. 

                                                           Ag Concepts Fwd Price Trades W/E 25 January

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

1009 cents ê  6 cents compared with 17/01/2013                                  1.0540 é 0.0026 compared with 17/01/2013

Northern Market Indicators (AUD cents/kg clean)

1129 cents ê 3 cents compared with 17/01/2013