WEEKLY MARKET REPORT

Week Ending 3^rd June, 2016

AWEX Northern Micron Indices Comparison

WINTER'S HERE AND SO IS THE RAIN!

 This week’s sale followed the pattern of the past 4 sales - very little movement. The benchmark EMI could only manage a 1 cent fall to 1296 cents, the first negative move in 11 selling days. As the exchange rate spent most of the week above 72 cents this pushed the indicator up by 4 cents in US terms to 939 continuing its narrow band of trading over the past 6 weeks. The market split in two as far as fleece types were concerned - finer than 20 micron 5 to 10 cents back while 16.5s lost 15 cents - the inferior quality of the offering dragging prices into buyers’ favour. On the flipside, the superior types that are diminishing in volume (finer than 19 micron) are still commanding premiums of 100+ cents over their indicators as a clip from Yass in our catalogue demonstrated. Broader types found good support to finish the sale up by 5 cents, growers still happy with these levels clearing over 96% of the fleece on offer.

Skirtings followed the pattern of the fleece room, broader types regardless of VM were solid while finer lots <18.5 and under 5% VM lost 15 to 20 cents. Again quality being a factor in price direction with the better style types tending dearer by 20 cents. Crossbreds also seemed to split into 2 markets, finer microns <26 up to 20 cents dearer while broader types lost up to 5 cents.  Cardings again forged ahead as all 3 selling centres MCIs are now over 1100 cents (1111 to 1108) - great money for this sector as all types lifted by 15 to 20 cents.

After what was expected to be a solid to dearer market, the release of better than anticipated GDP figures prior to the sale commencing on Wednesday was enough to see the A$ rise by a full cent to 72.85 taking away any chance of a rising market. This quarter’s growth was the biggest since the September 2012 figures. As the exchange rate softened overnight on Wednesday buyers were able to buy at a touch higher rate on Thursday to see the market edge higher. Supply, or lack of, will keep pressure on buyers as South Africa is now into an 8 week sale recess and shearing in New Zealand grinds to a virtual halt for winter. Fremantle has next week off as the national catalogue falls below 30,000 bales on the Eastern seaboard.

Latest testing figures reinforce just how tight supply is. Testing for May was back by 13.5% when compared to May 2015. The progressive year to date comparison shows 6% less bales tested and weight of wool tested when compared to last season, with bales offered running 8% less than last season.

We sell next Thursday with a catalogue of 1550 bales to what should be a solid market providing the A$ doesn’t move upwards. Let’s hope the rain keeps falling all weekend over most areas. 

Ag Concepts Fwd Prices at 3 June 2016

Main Buyers (This Week)