WEEKLY MARKET REPORT

Week Ending 28^th June, 2013

AWEX Northern Micron Indices Comparison

SEASON FINISHES ON TOUGH NOTE

A tough finish to the season as the market tapered off to have the EMI finish on 1047 cents, just 29 lower than 12 months ago. Over the year wool sales were held on 113 days with the EMI averaging 1037 cents (well short of the previous season), in fact 14% down from the 10/11 season. The weaker trend of last Thursday filtered through to this sale as medium types fell on the opening day with the sub 18.5 micron lots unable to hold their ground on Thursday. By week’s end most indicators gave up 20 to 35 cents with 19s down 40. The only indicators to escape the carnage were 16.5 and 22s, only 5 cents back. In a bizarre situation the 22 micron indicator is at 1167, this now 11 cents higher than the 19 micron indicator and just 22 cents behind 18.5s! The gap in Melbourne is closer, only 21 cents between 18.5 and 23 micron - a ridiculous tightness in price. This scenario of “one price covers most wools” must certainly be of great concern to growers of 19 micron and finer. There seems to be no immediate relief in sight as Europe struggles to escape the grip of high unemployment, negative growth and low consumer confidence giving the Chinese a free run at the finer micron types without fear of competition from Europe. Maybe the recent IWTO conference in Italy left more questions unanswered than answered as to the fate of these wools.

The shining light of the market - skirtings, cardings and crossbreds - couldn’t sustain their great run and followed the fleece trend to be cheaper, bar cardings. Skirtings opened with a fall of 10 cents for 18 and finer while 19 and broader looked 30 cents back. Thursday’s fall was not as dramatic with 18 to 20 micron types under 6% VM 10 to 15 cents off while all other lots were unchanged. Crossbreds lost ground as 28 micron and finer fell 5 to 10 cents with the broader lots slipping by 20 cents. The only dearer sector of the market was cardings as a 12 cent gain to 829 cents puts these within a whisker of the record set two years ago. Locks posted a 20 cent gain, crutchings 5 to 10 higher while stains were unchanged. Most locks are now realising over 500 cents, while bulky clean crutchings below 5% VM are making close to 600 cents! These sorts of prices certainly boost the bottom line averages.

So ends another season, one with plenty of ups and downs, not only with the wool market, but all rural commodities have had their fair share big price fluctuations as well as a season of extreme weather patterns. The recovery from October to February was short lived, but the market’s rally over the past six weeks gives us hope that all is not lost on the market gaining more ground - despite Europe’s absence. The buying list provided no real surprises with Techwool on top with 10.2%(179,245) followed by the now defunct Viterra Wool, 9.4% with Fox & Lillie and Lempriere securing 15.7% between them, the top 10 buyers accounting for 64% of the clip. Total offerings were just 2% (37,600) ahead of last season at 1,943,150 bales.

Our decision to push a few clips into last weeks sale certainly paid off as the market lost it’s momentum to end the season this week. We start the new season with a modest, but stylish catalogue of 575 bales on Thursday. With Fremantle finishing Thursday around 5 cents dearer, hopes that the 35,000 bales being offered on the Eastern seaboard will be met with good competition to start the new financial year.           

Ag Concepts Fwd. Price Trades W/E 28 June, 2013

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

1047 cents ê 19 cents compared with 21/06/2013                                 0.9321 é 0.0076 compared with 21/06/2013

Northern Market Indicators (AUD cents/kg clean)

1059 cents ê 23 cents compared with 21/06/2013