WEEKLY MARKET REPORT

Week Ending 4^th December, 2015

AWEX Northern Micron Indices Comparison

STATUS QUO

Yet another sale where any clear direction was hard to find. By the end of the sale the benchmark AWEX EMI had moved upwards by the barest of margins, 1 cent, to 1247. In US terms the rise was 10 cents to 912, this due to the AU$ spending all week above 73 cents. This is the third consecutive sale where the EMI has struggled to move in any direction. Since climbing to 1251 in the second week of November we’ve had 8 sale days where the EMI has traded in a narrow 8 cent range.

The sale commenced as most pundits predicted, higher exchange rate - cheaper market, however there looked to be a change of sentiment late on the opening day that then saw Thursday’s selection come under increased buyer scrutiny to see the opening day’s losses recovered. Most fleece indicators in Sydney were either side of unchanged by the finish of selling with up to a dozen lots in our catalogue gaining up to 20 cents over their indicators, contradicting the AWEX report that most microns lost 5 to 10 cents in the first session.

Skirtings continued on their merry way with all types across all microns adding 10 to 15 cents with most emphasis on the >8%VM lots. This is encouraging as the volume of burry wool coming in is dramatically on the rise. We had 2 clips from the Marra with 15 to 20% VM in their BKN making low to mid 500 cents with their BLS over 400 cents carrying up to 26% VM - very good money for these types. Cardings again played a starring role as all 3 centres MCIs are now 1100 cents or better as all types in this sector were 5 to 15 cents to the good. Crossbreds suffered from the higher exchange rate and the largest selection on the eastern seaboard since last spring - 26.7% (7950 bales) of the total offering. Losses ranged from 20 to 30 cents for most microns, bar 32s losing just 5 cents.

Latest figures released by AWTA show a drop of 7.5% for bales tested to the end of November compared to the same period last year. The total bales offered to date for the season is running at 9.2% (79,785) below last year. These figures should be ringing alarm bells in China. Many other factors will come into play after Christmas that will influence market direction. Apart from quantity (or lack of), quality will be crucial, the increasing amount of VM will influence buying patterns and of course currency shifts will always be a factor. Exchange rates are influenced almost daily by economic data being released or the price of commodities and the erratic movements of global stock markets.

Next week sees the penultimate sale of the year as the national catalogue has 49,000 bales on offer, the biggest since March. Melbourne’s catalogue will increase by 9,500 bales from this sale, a rise of 50%. Could this see the market come under pressure despite a 3 week recess almost upon us? Time will tell. We offer 750 bales late on Thursday. 

 Main Buyers (This Week)