WEEKLY MARKET REPORT

Week Ending 4^th April, 2014

AWEX Northern Micron Indices Comparison

IS THAT A FAINT LIGHT I SEE?....

Is this it?? Could the market finally have found the bottom? The market showed signs of steadying this week as falls were less dramatic than last sale’s disastrous week. We had seen 13 straight days of reductions over the past 5 sales - the longest losing streak in nineteen months. Thursday saw the market firm up in Melbourne and Fremantle (10 cent rises across the board) and apart from 17s and cardings losing 15 cents in Sydney, its sale was solid, a relief to all concerned. Despite this encouraging news, the EMI dipped under 1000 cents, now at an 11 month low of 993 cents. Falls were in a very tight range of 10 to 15 cents, bar 19s off by 23 and just a 6 cent drop for 21s. Finer types found favour in Melbourne recording subtle increases with fine, best style 40 nkt lots up to 20 cents better. This positive tone cut the passed- in rate by half when compared to previous sales.

The ever increasing narrowing gap between fleece and skirtings finally told in Room 2 this sale as the pressure of this small price differential saw 30 to 35 cents reduced from the skirtings. In fact, with some clips, the gap is nil as we had one grower’s “BKN” make the same price as 3 of his fleece lots! The lofty heights of cardings took a hit this week as all types and categories gave up 20 to 35 cents in both Eastern Seaboard centres; the biggest weekly fall in this sector for six months. Crossbreds followed the merino fleece price pattern as losses of up to 5 cents on the opening day were somewhat negated by a firm market on Thursday - this sector now falling in volume to 17% nationally.

The first quarter of the year is now behind us. Typically this time of the year has been very buoyant for the wool market and pre-Christmas forecasts were no different to past years. Since 1979 the January to March period has closed ahead 63% of the time, but this year was the largest fall - 128 cents - since the collapse of the Reserve Price Scheme in 1991 with only 3 sales from 12 ending on a positive note. There was one positive to come out of this period with the Melbourne buyers holding a “Purple Day” charity auction for the Epilepsy Foundation. A bale of 19.3 fleece, donated by the Polkinghorne Family of Victoria was bought by Australian Merino Exports for 5000 cents to return $9350 with various other items sold raising over $31,000 in total. A great result and well done to our Southern counter-parts.

Has the market bottomed? For the time being it may have as reports of wool booked up on Wednesday night led to the consolidation on Thursday. We now have just two sales to go before the Easter recess with talk of a solid market a common theme on the show-floor. Where to after Easter is anyone’s guess but as one exporter said, if no new business was written soon the post Easter period could go like what we’ve been through (not to that extent but a softer market nonetheless). As always, demand will be the determining factor with currency shifts and quality of the clip influencing price as well, but for the moment the rot has stopped. Next week will see a national catalogue of 40,000 bales with only 8000 in Sydney, its 3^rd smallest sale in 20 years. For some interesting viewing Click here  

Main Buyers (This Week)

Eastern Market Indicators (AUD cents/kg clean)                                    AUD/USD Currency Exchange

993 cents ê 13 cents compared with 28/03/2014                                   0.9227 ê 0.0012 compared with 28/03/2014

Northern Market Indicators (AUD cents/kg clean)

1006 cents ê 16 cents compared with 28/03/2014