WEEKLY MARKET REPORT

Week Ending 7^th December, 2012

Northern Micron Indices Comparison: Source of information: AWEX

BIGGEST DAILY RISE IN 2 YEARS!

Our uncertain forecast of where the market would finish by the end of this week’s sale was put to bed early in the week. Strong Wooltrade sales early in the week and a predicted rise rang true as Melbourne opened proceedings on Tuesday dominated by a slick Tasmanian selection (46%). Despite the extra freight component from Launceston to Melbourne, prices moved higher by 10 to 35 cents. This augured well for Wednesday when we sold as buyers chased the market to levels not seen for six months. All fleece indicators in Sydney jumped 30 to 80 cents. Our catalogue included some excellent clips from Cooma, Bathurst and Goolma which saw 100% of our fleece cleared with 65% of lots making over 900 cents. Thursday saw the market steady as Sydney and Fremantle were a touch cheaper as buyers became more selective with their purchases as Melbourne bucked this trend with most indicators adding another 10 to 20 cents. By week’s end the medium indicators,19 to 23, climbed 70 to 80 cents with 17 to 18.5s up 30 to 50 cents and the super-fine types 20 dearer although selected lots (especially out of Tasmania, under 18 micron) were quoted up to 100 cents dearer. As usual discounts were at the barest minimum. Wednesday’s 38 cent rise in the EMI was the largest in almost 2 years, with all three centres recording 50+ cent gains in their regional indicators - these levels not seen since June.

Skirtings sold to a similar pattern as the fleece room as the opening day’s gain was followed up by an even bigger jump on Thursday to have all types and descriptions 40 to 50 cents up on the previous sales quotes. Just 3% of the national offering was passed in. Cardings also kept pace with other sectors of the market as a 38 cent rise saw the MCI now at an average of 700 cents on the Eastern seaboard. Locks put on 25 to 35 cents as stains and crutchings finished the sale 50 to 60 cents higher. Cardings have now added just over 10% to their values in the past two weeks. Crossbreds had a steadier sale than the merino sector, despite quantities still making up over 20% of the offering. Fine to medium types (25 to 30 micron) looked 10 to 20 cents dearer while the broader lots, 32 micron> were 5 to 10 cents better.

The penultimate sale before the three week Christmas recess delivered just what we were looking for. After last week’s rise (due in part to a “shipping deadline”) there was a degree of uncertainty as to where the market would go, but the impending recess looks to have sent buyers into somewhat of a “panic” to secure wool. This week’s good rise sees the EMI and the 17 to 21 micron indicators 8 to 13 % lower than 12 months ago. The broad merino indicators are around 5% behind with crossbreds on par and cardings 5% higher - a good result considering the markets position in August and September when the EMI was stuck between 925 and 950. With the market rising now might be a good time to lock in a portion of your clip. Forward prices are now 1200 cents or better for 21 micron out to July 2013. Contact your rep for any further details. Good news on the OJD front as the new proposal to be delayed to July 1^st but lots to be discussed before then. We’ll offer 800 bales early on Thursday with the market to finish the year at about these levels.            

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

                Eastern 1086 cents é 52 cents compared with 29/11/12                                    1.0470 è 0.0000 compared with 29/11/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1109 cents é 53 cents compared with 29/11/12