WEEKLY MARKET REPORT

Week Ending 28^th October, 2016

AWEX Northern Micron Indices Comparison

CONSOLIDATION DESPITE LARGER OFFERINGS

Consolidation was the key word this week as the wool market was unable to move one cent, staying at 1331, a 16 month high. The slight downward adjustment in the exchange rate saw the market in US$ terms retreat by 7 cents to 1016. The rally on the opening day was negated somewhat by a cheaper tone on Thursday to leave most indicators unchanged. 18/18.5s and 22s suffered the biggest losses (9 and 7 cents) while all others were either side of last sale’s levels except 17s which gained 10 cents. Again, the lots that had the “right specs” came under fierce bidding to be up to 50 cents better than the indicators with “spinners” style and better still commanding premiums of 200 cents.

Skirtings continued on their merry way as price increases from 10 to 30 cents were common for <19 micron up to 5% VM with the odd superior type adding 50 cents to their values as a few buyers  had to buy to finish off outstanding forward positions. Crossbreds took the hardest hit of any sector as all microns (25 to 32) gave up another 10 to 20 cents. We are hearing that for 27 and broader these levels are at an attractive price for manufactures and speculators alike suggesting that we could be at the bottom of the price cycle for these microns. Cardings again went forward as buying pressure seemed to ramp up even more than in previous sales. The perfect storm of low supply and increased demand from China saw price levels for all types in this sector go ahead by 20 to 50 cents. A line of LKS made 1198cents clean (702 greasy) while STN fetched 1178 (654 cents greasy) - great money for these types.

Concern over elevated offerings - a 10,000 bale increase week-to-week as this sale was the first sale in 6 weeks that the national catalogue was over 40,000 and the second largest this season didn’t seem to faze buyers. The re-emergence of the biggest Chinese indent buyer last week kept going this sale, almost unbeatable on some types as they secured 5,500 bales (25% of the fleece sector). Most other exporters looked to just buy what was absolutely needed for covering, not willing to take them on and push the market any higher than necessary.

Next week’s volumes have ballooned to 49,000 bales - a 10%, 5000 bale increase in a week - this partly due to the dryer weather over the past month or so. Our experts tell us current market trends in place will continue with quantities to fall back to low-mid 40,000s after next week. For what its worth in the Cup, No. 6 Exospheric, each-way of course!!!

Ag Concepts Fwd Prices at 28 October 2016

Main Buyers (This Week)