WEEKLY MARKET REPORT

Week Ending 6^th July, 2012

Northern Micron Indices Comparison: Source of information: AWEX

OFF TO A STEADY START

The opening sale of the new season saw a cautious and steady tone as the EMI added just 1 cent to last week’s end of season close of 1076 cents. The rise came as a result of Melbourne lifting by 2 cents and Sydney remaining unchanged. The pattern of market movements was identical on both days as finer types, 17.5 and under, and broader indicators from 22 out edged higher to the tune of 5 to 10 cents - the fine microns benefitting from a handy selection of Goulburn stored wool. All other indicators, 18 to 21 drifted lower by as much as 10 cents, due mainly to a sub-standard selection on the opening day. One factor weighing heavily on the market is the discount for VM. Fleece wools with 2 to 3 % VM in the 20 micron range are attracting a discount of 65 cents clean from the 1% VM lots and a discount of 85 cents in 21 micron types. When the market is firing we have seen these discounts shrink to as little as 20 to 30 cents, which is about normal (the old rule of thumb was a 10 cent discount for every 1% of VM). Strangely enough, as the VM levels increased the discounts did indeed reduce as some lots carrying 7 to 8% VM were only 30 cents cheaper than the lots with 3% burr. Also notable was, dare we say, a style premium. Two lots at 19.7-1.3vm-40+nkt’s were 20 cents clean different, one from Goolma the other from Louth. The lot from Louth did have a mid-break of 63 compared to 36. Could this have been the difference? The Louth clip did have another 19.7 lot, 0.9 VM, 30 nkt with a mid-break of 71 make 15 cents clean more than his other lot, both purchased by the same exporter! Hard to follow this price determination. Most growers (just the two centres on the Eastern seaboard operating) appeared keen to sell as the clearance rate of 94% was the highest in 16 months. In fact we sold every lot offered - just the third time Macwool has achieved a 100% clearance.

Skirtings followed the pattern of the past two weeks as both days saw subtle increases in the market. Good length finer than 18 micron types added 20 to 30 cents regardless of VM, while 19 to 21 micron skirtings looked to be 10 cents higher than the previous sale’s quote. With the market on the rise we have been able to clear passed- in lots at good increases with some better than their original valuation. The effects of the wet summer have all but gone with less and less cott and jowl in the skirtings. Cardings were left unchanged for the week and fine Crossbreds edged higher by up to 5 cents while the broader types (30 micron up) lost the same amount.

Next week sees all three centres selling before the annual three week winter recess. A national catalogue of 49,000 bales may test the market as Macwool creates history with our largest catalogue to date, 2190 bales, 1^st up on Thursday.   

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

                Eastern 1077 cents é 1 cents compared with 28/06/12                         1.0261 é 0.0141 compared with 28/06/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1089 cents é 0 cents compared with 28/06/12