WEEKLY MARKET REPORT

Week Ending 6^th September, 2013

AWEX Northern Micron Indices Comparison

A NEW LEVEL

Whether it was the excitement of the successful ram sale or the good rise in the wool market, the one critical error we made in last week’s market report went almost unnoticed. Just one avid reader of our report let us know the mistake.  The EMI did rise by 52 cents, but not to 1164 as reported, but the figure should have been 1064! But as our avid reader will know by now a 64 cent jump in the EMI this sale sees the indicator at 1128, just 36 cents from last week’s incorrect figure, but odds-on the market may not reach that misquoted level next sale.

Solid Wooltrade sales pre-empted a good market with most pundits forecasting a rise of somewhere in the vicinity of 10 to 50 cents. How true they were! Only the 16.5 and 19.5 micron indicators finished outside these predictions, rising 7 and 72 cents respectively on the opening day. All other indicators added 30 to 60 cents. This bullish market didn’t scare the Chinese as more orders were booked up that night. The second day’s sale, while not as frantic, still led to solid gains across all microns as finer types led the way with 17.5s to 20 microns 30 odd cents better. By the end of the week the 19 to 20 micron range posted the biggest gains (90 to 105 cents) with all others 60 to 80 cents higher - bar 16.5s up by just 30 cents. Just 76 bales (1.1%) of fleece were passed-in in Sydney with a top price of 1555 cents for a 14.8 micron weaner line.

Skirtings followed the aggressive lead of the fleece room with momentum building to the final day’s offering as all types, regardless of VM or style, skyrocketed in price. Rises were in the order of 80 to 100 cents with the largest gains finer than 20 micron and VM levels under 5%. The clearance rate was incredible - just 7 bales from 2,274 passed-in - 99.7% sold! The carding sector had the most quiet sale with the MCI 13 cents better as locks and crutchings  looked 10 to 15 cents higher and stains up to 20 cents dearer, to see all three regional indicators for this sector now in record territory. Good gains in the Crossbred types saw rises of 15 to 30 cents, but strangely with a 3.2% pass-in rate, by far the highest of any sector.

A great week to follow on from last sale’s big rises. The 116 cent (11%) rise over the fortnight is the biggest two week gain since January 2011. This rapid rise compares favourably to the 104 cent jump in a six week period in May/June. The EMI is now just 10 cents below late January’s peak, but in US terms the market is 158 cents down due to the massive downward shift in the exchange rate from 104 to 91 cents. The gap of 101 cents between the EMI in AUD and US terms (1128 to 1027) still makes wool “very affordable” according to one major trader and we could be looking at a new level for the market. Monthly testing figures released for August by the AWTA show an alarming drop in August when compared to 12 months ago - down 15.5%. The figure not as bad when looking at July to August this year and last year, back by 5%, numbers that will get buyers’ attention with no wet weather to stall shearing over the past six weeks. Next week has 44,000 bales on offer nationally with a slight correction the most likely out-come.

Fwd. Price Trades W/E 06 September, 2013

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

1128 cents é 64 cents compared with 30/08/2013                 0.9101 é 0.0130 compared with 30/08/2013

Northern Market Indicators (AUD cents/kg clean)

1149 cents é 67 cents compared with 30/08/2013