WEEKLY MARKET REPORT

Week Ending 5^th May, 2017

AWEX Northern Micron Indices Comparison

GROWERS AHEAD OF BUYERS ... FOR THE MOMENT!

The inkling that the market could go on a bit of a run was rammed home from the opening bell on Wednesday as buyers ramped up their bidding. Solid gains across all merino fleece microns saw the AWEX EMI surge to 1544 (+43) just 7 cents shy of the lofty heights of March. The favourable move in the exchange rate (down by 1 cent) saw the EMI in $US add 22 cents to its value to 1146. Rises were across the board and included all styles and specs. 17 to 22 micron jumped 60 to 80 cents with finer lots up by 40 (22s in Fremantle climbed by 100 cents!!). Growers warmed to these new levels as just 67 bales of fleece were passed-in in Sydney and only 100 in Fremantle.

Skirtings weren’t caught up in the rapid rises of their fleece counterparts. The opening session saw sub 18s >3% VM give up 20/30 cents but a change in sentiment on the final day saw these types claw back 10 cents while the lots containing heavy colour/cot looked to increase their discounts for these faults as the price gap between good and bad widens. It will become more important to remove these faults from “BKN” lines as we go forward.  Cardings had a quiet but solid sale as 3 centres MCIs were unchanged to sellers’ favour.  The decreasing volume of crossbreds also spent the sale consolidating their levels as most microns looked up to 10 cents higher, bar 28s up by 25 cents.

A great market to sell into as a perfect storm of smaller volumes, lower FEX rates and good demand has buyers scrambling for quantity. The underlying strength of the market can be seen in the fact that this season we have offered 90,000 bales more (2 selling weeks) than the previous and the EMI is 22% higher than a year ago (1544 to 1268). The larger volume is a result of the good season from last winter increasing cuts/head and the rising market tempting growers with wool on hold to catch the good prices on offer. April testing figures were down 7.5% from last year but the progressive total year on year is 3.2% above last season equating to 306.5 mkg compared to 296.3 mkg.

Our correspondent at the 86^th IWTO Congress in Harrogate, Yorkshire reports of the very good outlook for wool. It was only 20km away where Samuel Marsden’s 1^st shipment of Australian wool was processed in 1807 transforming this area into the wool processing capital of the world. By 1900 50% of the global processing capacity was in Bradford. Harris Tweed is a story of survival, from near extinction to adopting innovation, craftsmanship and telling the story of wool, they have attracted a new generation and market to be a leader in woollen products again. Market should be solid again.

Ag Concepts Fwd Prices at 5 May 2017

Main Buyers (This Week)