WEEKLY MARKET REPORT

Week Ending 3^rd July, 2015

 AWEX Northern Micron Indices Comparison

BUYERS REVENGE SLOWS TO A TRICKLE

The opening sale of the new season brought no joy as buyer sentiment didn’t improve as the EMI lost 32 cents to 1231.  Buyers, almost unanimously, blamed the sudden lift in quantity for the price reduction and some of their reactions on the show-floor had some broker’s staff running for cover. The pattern was a mirror image of last sale - a big opening day’s fall followed by a steadier final day but this week fleece indicators were back 25 to 40 cents, halving last sale’s big falls. Only the odd indicator escaped the sale with little carnage, 22s back by 8 cents while 17.5s fell by 15 cents. Discounts continue to grow for tender, burr, cott, colour, high mid-breaks and over-long types as some passed-in lots received only token bids. FNF types seemed to hold up as some lots from Walgett, Cunamulla, Orange, Coolah and Dunedoo made 10 to 50 cents higher than their indicators.

Room 2 took a bigger hit than their fleece counterparts, a rare occurrence over the past 6 to 12 months. All skirtings, regardless of VM or type, lost 50 to 60 cents. Cardings finally succumbed to their dizzy heights and had the biggest falls of any sector, 60 cents to 1036, it’s largest weekly drop for 4 years. All types in this sector gave up 50 to 60 cents. Crossbreds weren’t immune to a softer market as all indicators came back 20 to 30 cents.

A tough sale as buyers let their feelings know about the ballooning volumes. Initial estimates for S52 were 35,000 but jumped to 48,000 in the space of 7 days. This week’s sale was 39,000 then also rose by 10,000 to 49,000, again over a week, a 37% and 26% rise sending shockwaves through exporters as to how they were to finance these extra volumes and how the prelim figures could be so low and who stacked these 2 sales with so much wool?? A quick look at our catalogues has only 8% (100 bales) of last week’s sale older than 4 weeks and this sale 200 bales (11%) fell into this category. We can hardly be accused of “stacking catalogues”. It may well be other brokers were waiting for the financial year to tick over so growers wouldn’t be paid 2 wool clips in the 1 financial year. We have avoided this as only a few growers were in this situation.

Despite this sale’s slide prices looked to have found their feet as an arrest to falls very late in Thursday gives a glimmer of hope that the market has leveled out and the current rates are at a more favourable level for mills that may now re-enter the market and help set a solid floor in the market.

Next sale sees 42,000 bales on offer, the final sale before the annual 3 week winter recess. Hopefully the better signals late in the sale, buyers will have enough outstanding orders and new business to see the market head into the recess in a positive direction. We’re 1^st up on Wednesday with 1,350 bales on offer to, hopefully, a solid to sellers’ favour market.

Ag Concepts Fwd Prices as at 3 July 2015

Main Buyers (This Week)