WEEKLY MARKET REPORT

Week Ending 31^st October, 2014

AWEX Northern Micron Indices Comparison

MARKET LEAVES EVERYONE CONFUSED!

The anticipated big offering didn’t eventuate as 5,500 bales were withdrawn across the three selling centres leaving 47,500 on offer. This coupled with 14% -7,000 bales- passed in left only 40,000 sold to the trade. This drop in wool that actually exchanged hands, however, failed to give the market any traction as the EMI slipped another 7 cents, now at 1029. In US terms the EMI sits at just 902 cents, a 137 cent (13%) drop from 12 months ago, helped by the downward shift in the exchange rate. This compares poorly to a 6% fall from 1095 cents a year ago in Aussie terms. The exchange rate over the same period has fallen 7 cents, sitting at 87.55 US cents this morning.

The market followed last sale’s pattern except for one thing - Thursday saw somewhat of a recovery to give hope of a stable market for next week. NZ Merino opened proceedings again this week with their largest offering since February but, in a sign of things to come, had mixed results. Super-fine lots with poor specs lost 20 cents with 18s and broader finding good support to be dearer by 10 to 20 cents. Wednesday saw a similar pattern as good types were in good demand with the lower spec types losing another 20 to 30 cents as 19s and broader gave up another 10 cents. Thursday saw a recovery as all types came up to levels at the start of the sale. By week’s end losses were restricted to single figures (4 to 8 cents) bar 17s, back by 10 cents. 19.5s bucked the negative trends to post a healthy 12 cent gain. As we said earlier, good wools are still in demand. Some of our better super-fine lots made from 50 to 150 cents higher than their indicators with some FNF and “B” fault medium types up to 50 cents better indicating that lots with the right specs will make good money above the indicators.

Skirtings had an ordinary sale as the buyer support on the final day was not there as was the case in room 1. Most types looked 20 cents cheaper with medium micron lots and coarser with <5% VM losing up to 25 cents by the final hammer on Thursday. Once again locks let the carding sector down as they lost 10 to 15 cents over the week with stains and crutchings resisting any drop in the market to remain solid.  Crossbreds also became victims of the negative tone as finer microns (< 26)  lost 20 cents, mediums back by 5 to 10 and the broader types, 32>, quoted as unchanged.

An erratic sale this week as big losses early in the week were followed by a late rally to leave us still in the dark as to which way the market will track through to the Christmas break, a period of six sales. This last day surge in the market on Thursday saw the EMI post a 6 cent gain for October, which is fairly typical as only 3 Octobers in the past 10 years have finished in the red. Most exporters can’t see much change in the market for the short term and almost impossible to call in 2015 as to its direction, except for the odd shipping squeeze or rally. The rises we saw in the first half of the month have gone - we’ve seen 5 days of flat-lining, 5 days of rises and now 5 days of losses! National volumes back off to mid 40,000s for the next few weeks and this might help the market. For what it’s worth, “Protectionist” in the Cup!!

Ag Concepts Fwd Prices at 31 October

Main Buyers (This Week)