WEEKLY MARKET REPORT

Week Ending 4^th March, 2016

AWEX Northern Micron Indices Comparison

CURRENCY UP, MARKET DOWN

 Despite the smallest national catalogue in a month (39,850) the market couldn’t sustain last sale’s levels and drifted lower by 10 cents to 1258, the lowest point since early December. Wild currency movements from 71.10 last weekend to 73.75 overnight put paid to any positive movement for the market. Losses were felt more so at the fine and super-fine end, 17.5 and finer -25 to 30 cents, 18 to 19.5 back 10 to 20 and 20 micron and broader just 5 to 10 off. The very best types (finer than 19) seemed to hold their own coming off a designated super-fine sale. In a first for Macdonald &Co. we offered 9 bales of super-fine wool a/c Bundi P’ship (Rick Burns & Jill Williams) from Ullamalla, via Hill End, that qualified for the “Sustainawool” integrity scheme introduced by New England Wool. This scheme was introduced “To promote the production of the highest quality wool via the sustainable management of natural and physical resources”. The 2 fleece lines averaged 1302c/kg, 128 and 141 cents above their indicators. Italian spinners and weavers Mazzoto and Reda bought 1 fleece lot each both to be processed in Biella, northern Italy, for high end men’s and ladies’ fashions for Europe.

Skirtings suffered a similar fate to fleece types. Although remaining solid on the opening day when we sold, they lost 20 cents on Thursday. The “Sustainawool” BKN from Bundi P’ship made 985 cents, bought by New England Wool for Vitale Barberis to be also processed in Italy - a great effort by these growers to produce such a fine article. Cardings followed a similar track to skirtings, a firm opening only to see all types in this sector lose 10 to 15 cents on the 2^nd day. Crossbreds seemed to fare the best of any sector finishing fully firm to 5 cents better despite an increase to 25% of the offering on the eastern Seaboard.

The one and only factor to effect this sale was the upward movements of the A$ that stymied prices but not to the degree that was being bandied around earlier in the week. Underscoring demand strength was, as a result of exchange rate shifts, the EMI in US$ terms that rose by 10 cents to 919 - a level not seen since last August (928). The better types ultimately bound for Europe, succumbed to the abrupt rising A$ against the Euro (a swing of 7% over the past few weeks).

One factor that did help the market not to fall as much as was anticipated was the variety of types on offer, which did help competition to a certain degree and the offering falling below 40,000 bales. Next week has 43,000 bales on offer with currency direction to play a critical role. On the flip-side is the hand to mouth operations that all mills work with as purchases are being placed on a’ just-in-time’ delivery order can cause immediate price reaction, more relevant to indent buyers who operate on a US$ or Euro delivered basis. Just a reminder to growers who want to sell at the Royal Easter Show, Wednesday, March 23^rd that wool will need to be delivered by next Wednesday, 9^th March.

Main Buyers (This Week)