WEEKLY MARKET REPORT

Week Ending 25^th November, 2011

Northern Micron Indices Comparison: Source of information: AWEX

CHANGE OF SENTIMENT – THINGS LOOKING UP

Newcastle looked as if it would succumb to the pressure of subdued demand, more bad economic news coming out of Europe and too much of the same type on offer in the one selling centre. This certainly looked the case as the market lost ground on the opening two days, but staged somewhat of a surprisingly robust recovery on Thursday to send those growers home reasonably happy. Even with an exchange rate dropping to under parity (under 97.50 US cents this morning) the market opened cheaper on Tuesday recording falls of 10 to 25 cents for all indicators bar 17 and 17.5 micron - just into buyers’ favour. Momentum looked to be building on Wednesday as 17 to 17.5s increased 10 to 15 cents, 18 to 19.5 in sellers’ favour with 20 and 16.5 and finer 15 to 25 cents off the previous day’s quotes. Thursday saw all fleece indicators jump 10 to 30 cents except 17.5 (adding 5 cents). By week’s end the EMI put on 2 cents  to 1192 cents, but in US cents with the softer A$, down 3.65 cents this week to be at its lowest level for 6 weeks, equated to a 41 cent fall to 1162 cents. The reasons for the sudden change of sentiment are varied - from decreasing volumes leading into Christmas and into the new year, a shipping deadline in December, very low stocks of yarn and tops in China and finer types dropping to a level that allowed business to be done on Wednesday night. Whatever caused the turn-around was certainly welcome with hopes of a dearer market through till the sale recess in three weeks more than likely.

Merino skirtings tracked the fleece movements with the best style types firm while the few lower style and burry lots lost ground. Some of the better style and AM’d lots were dearer while 5% VM and higher pieces and bellies suffered the most retreating 30 to 40 cents with most emphasis over 8% VM, but on a very limited offering which may have been a contributing factor to the falls. These burry types should make a recovery next week as increased quantity should satisfy most enquiries. Cardings gained momentum as the sale progressed with the MCI closing the week 9 cents higher at 736 cents. Locks put on 15 to 20 cents; crutchings performed the best of this sector climbing 30 cents with stains adding 20 cents to their previous sale quotes. Crossbreds, as usual in Newcastle, made up very little of the offering, 5% (594 bales) in total with the daily volume especially on Tuesday and Thursday not enough to generate quotes, but remained at last week’s levels. Next week Sydney will offer16000 bales with Don Macdonald & Co. cataloguing 1140 bales first up on Thursday. The outlook, even at this early stage, is for a solid market to gain momentum as the sale progresses.                                                                         

                                                                   Agrisk FDIC Indicative Quotes 25/11/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1192 cents (é2) compared with 18/11/11                                   0.9745 ê 0.0365 compared with 18/11/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1231 cents (ê1) compared with 18/11/11