WEEKLY MARKET REPORT

Week Ending 6^th June, 2014

AWEX Northern Micron Indices Comparison

STILL TREADING WATER

A disappointing sale as just the two eastern seaboard centres were operating with only 27,000 bales on offer. The market was unable to hold onto last week’s marginal gains as the EMI lost 3 cents, down to 1037. Losses were across the board as 17.5 to 22 micron gave up 10 to 15 cents. Finer types were less affected as the falls averaged 7 cents. While these indicators fell, the better style, sound, FNF types with low mid-breaks performed well and sold above indicator levels. It does look as though when the Italians are pushed on certain types they will pay a premium for style - something we feared was long gone. One lot of 17.1 from Coonabarabran made 43 cents better than the indicator. An 18.3 micron lot from the same clip looked 30 cents higher than that indicator. Some other lots with good specs made up to 10 cents higher than the average. One thing we did notice was the amount of “long” fleece wool in our catalogue. A closer look at the catalogue showed 30% of our fleece offered was over 100mm, with the longest measuring 123mm. How much of a discount you might ask?  The lots up to 110 mm (regardless of strength or VM) looked up to 25 cents lower than the indicators. Lots that measured 110 to 120 were up to 50 cents off and the 120mm lots up to100 dependent upon whether containing cot or colour. Some of the better lots were only just below the indicators and all these clips had between 12 and 13 months wool, certainly not over-grown due to miss-mustering and, under the conditions some of these sheep had been running, a great effort to grow wool of that length!

Skirtings looked to be more keenly sought after than fleece types as this sector of the market finished the sale in sellers’ favour by up to 10 cents as the trade chased the 4 to 8% VM lots more so than their low VM counterparts. This slight rise may be due to the size off the offering as this was the smallest skirting catalogue of the season, only 3936 bales (14%) of this weeks total catalogue.  Crossbreds enjoyed a good sale as only 67 bales were passed in (a clearance of over 98%). This would appear as though the market took a significant lift, but this was not the case as Melbourne’s market lost up to 5 cents with the Sydney selection up to 5 dearer in the finer types and unchanged to 5 cheaper in the broader microns. The carding sector shrugged off any of the losses it had last week. The MCI broke through the 800 cent barrier to sit at 803 - a 13 cent jump as all types added 10 to 15 cents to previous values.

Demand must be very quiet when the second smallest offering of the season (27,500) can’t entice the trade to keep the market at a last sale’s levels. Even though the market was only just cheaper it does ring alarm bells if demand cannot lift in the face of increased offerings in late winter and spring. On the flip-side, AWTA report another fall of 3% in volumes tested in May this year when compared to 12 months ago. The EMI has traded in a narrow 20 cent range for 5 weeks now and may not deviate off this path till after the July recess. Fremantle will be back on board next week as 35,000 bales are offered with little change expected in prices.

Ag Concepts Fwd Prices at 6 June 2014

Main Buyers (This Week)

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

1037 cents ê 3 cents compared with 30/05/2014                                   0.9286 é 0.0005 compared with 30/05/2014

Northern Market Indicators (AUD cents/kg clean)

1053 cents ê 6 cents compared with 30/05/2014