WEEKLY MARKET REPORT

Week Ending 27^th January, 2017

AWEX Northern Micron Indices Comparison

Looks like The dust has settled.

It was another week of two halves, but this time the two days each had a different tone about them. Not surprisingly, the first day of selling was met with buyer resistance as the dollar edged higher and the offering consisted of more broader merino types carrying higher VM. The Northern Indicator fell 20 cents on Tuesday with the majority of the pain felt coarser than 20 microns. On Wednesday the market held firm and even strengthened towards the end of selling indicating the “correction” was over for the time being. Interestingly though, the broader end continued to ease with 22 microns quoted back another 20 cents on the second day.

The weekly change column shows a clear direction for the market which has been quite marked since the resumption of sales three weeks ago. What the market reports don’t show are the discounts and quotes for wool carrying high levels of VM e.g. fleece over 4%. About one third of our merino fleece offering this week was carrying over 4%, and up to 11%. In the three weeks since sales resumed the discounts for these types has nearly doubled as processors grapple with what to do with them. Conversely, the skirtings off these same clips which are carrying from 15-25% haven’t changed much and are making relatively good money in clean terms. We expect this trend to continue over the next few months as most clips will edge higher in micron and wool cut.

Merino cardings have maintained values reasonably well as small volumes in this sector keep buyers on their toes, crossbred oddments on the other hand have been struggling for some time and much of the passed lots we have had during the last three weeks have been these types.

For fine wool, the future looks very bright as supply will tighten over the coming months. One thing to consider as autumn approaches will be seed and shive. Any seedy edges would be best removed as discounts on these types will definitely increase as we have seen with clover burr.

Next week it is expected that the firming trend seen on Wednesday will continue and the offering of 42,500 bales is lower than any of the previous three weeks with Macwool first up on Thursday.

Ag Concepts Fwd Prices at 20 January 2017

Main Buyers (This Week)