WEEKLY MARKET REPORT

Week Ending 26^th October, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET CONTINUES TO STRENGTHEN

Another good week as the market continued on its merry way. Solid Wooltrade sales early in the week pointed to a rising market that led to buyers chasing every available lot on offer at auction. All three centres recorded double digit rises on both selling days. The EMI posted a gain of 34 cents to 1048 extending the run of increases to 10 days and a 108 cent rise over that time. Since AWEX commenced market reporting in 1995 there have been only three other occasions when the EMI has had a longer running rising streak, the most recent was June 2011 gaining for 15 days straight. Finer types led the charge as their recovery will please fine-wool growers no end. Increases were in the order of 65 to 80 cents for 19 micron and finer with 19.5 and broader out to 23s lifted by 25 to 50 cents. Again, discounts were minimal as buyers fought hard to secure wool with 98% of fleece lots sold in Sydney.

Skirtings mirrored the fleece room’s movements with some types out-gunning their fleece counterparts. The odd super-fine lot (< 2%VM) looked up to 100 cents better than last week’s quotes. Most descriptions ended the sale 60 to 80 cents higher, including lots containing up to 6% with most emphasis on types under 3%. Burrier lots over 8% gained 30 to 50 cents with discounts for cot, colour and jowls shrinking to minimal levels as the volume of lots on offer has slowed to a trickle and blending these with superior types is much easier now than back in the winter when every second lot had these faults. Cardings took a breather as momentum stalled with just a 2 cent rise for the indicator to 619. Crutchings edged a little higher while stains remained unchanged. Locks had an up and down week as washing types (<2%VM) were in sellers’ favour and carbo locks (burry) lost 5 to 10 cents on the final day. Crossbreds also looked on from the sidelines as most descriptions finished just ahead of last week’s quotes despite quantities lifting to almost 20% of the offering as we move into the peak shearing period for crossbreds.

The good run for the market continued on unabated. Despite factors like a high exchange rate, economic difficulties in the northern hemisphere and an over-supply of yarn and tops in China, demand is outstripping supply. Next week will see a 50,000+ national catalogue, but according to all reports won’t hinder buyers from pushing the market higher. The trade shows held recently in China seems to have mills booking up orders and suddenly all are positive about the future. All this is happening without two of the biggest buyers operating to capacity. Viterra didn’t buy a bale this week and aren’t likely to next week as all components of their business are put on hold as a buy-out is negotiated with Agrium. Queensland Cotton have also been quiet over the past few weeks with Modiano, Chinatex and Lempriere joining Techwool at the top of the buying lists. Don’t forget to vote in Woolpoll 2012 as voting closes in 1 week.       

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

                Eastern 1048 cents é 34 cents compared with 18/10/12                                 1.0364 ê 0.0032 compared with 18/10/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1076 cents é 43 cents compared with 18/10/12