WEEKLY MARKET REPORT

Week Ending 7^th July, 2017

AWEX Northern Micron Indices Comparison 

MARKET ESCAPES ALMOST UNSCATHED!

The opening sale of the season saw the largest national catalogue (51,000 bales) on offer since the Easter Show sale in April. Forecasts of a solid market seemed to fade as the week progressed. The favourable FRX and a trickle of business that was written late last week wasn’t enough to have the market hold onto current levels. A general softening of prices had all merino indicators 5 to 15 cents lower than last sale. As has been the pattern of buying for a long time, good types with the right “specs” came under spirited competition as the burrier lots (4% VM) looked to be under pressure from the increase in volume of these types and were discounted accordingly. The AWEX EMI gave up just 1 cent to 1524 and fell by 9 cents to 1158 in US$ terms. These levels are actually above last sale’s levels (1507 and 1154), this due to the readjustment of the 3 regional indicators and the EMI which is done periodically by AWEX.

For the 2^nd sale running skirtings defied their fleece counterparts and mostly moved ahead. The better style, sub 18 micron types with < 6% VM lifted by 20 cents while all others were rock solid bar lots with heavy col/cott still attracting large discounts with some 10/15% VM types irregular. Cardings started the sale on par with the previous session but a change of sentiment on the final day saw all types in this sector fall by 20 to 30 cents. Crossbreds started the season with mixed results as finer types < 28 micron finished either side of last sale’s levels as broader microns (> 28) lost 5 to 10 cents.

This was a somewhat disappointing result to the opening sale of the new season. After a bit of business was written late last week and the currency falling to, at one point, below 76 cents from a high of over 77.55 hopes that the big offering could be absorbed evaporated early this week even though, on reflection, the fall could have been a lot larger than we had. The market held up in part due to one of China’s largest indent buyers re-entering the market after a quieter past 4 weeks seemingly not deterred by the increased volume. Other buyers in the fleece room soon sensed no slow down in their buying strategy so these rivals had to pick up the slack to acquire inventory to fill sold positions or provide future trading fodder.  Most buyers initially stuck to a buy-in price level rather than letting volume dictate purchasing patterns. New business was sporadic early in the sale but as prices failed to fall away less than most expected, demand increased and looks set to filter into next sale - the final before the 3 week winter recess.     

In news from AWTA, testing figures now reveal that Dubbo is now the 5^th largest testing site in the country testing 104,000 bales last season. Fremantle was the biggest coring centre followed by Geelong, Adelaide and Melbourne with Goulburn behind us. Next week has 47,000 bales on offer; we sell late on Thursday with 1688 bales catalogued.

Ag Concepts Fwd Prices at 7 July 2017

Main Buyers (This Week)