WEEKLY MARKET REPORT

Week Ending 9^th October, 2015

 AWEX Northern Micron Indices Comparison

AU$ RISE PUTS A SPANNER IN THE WORKS

Another poor week for the wool market as its slide continued on unabated. The market doubled last sale’s losses with the EMI falling 22 cents to drop below the psychological figure of 1200 cents, now 1195, a point not seen for six months - this sale being the 4th week of consecutive falls. The wild movements in currency from 70.55 cents last Friday to over 72 cents on Wednesday night certainly took its toll on the market but resulted in just a 1 cent rise to 860 cents in US terms due to the rising exchange rate.

The week did get off on a reasonable note as the small offering of NZ wool in Melbourne was met with good buyer support for the good types as lower spec lots lost 10 to 20 cents. This pattern of buying remained in place all week as most types drifted lower except for the very good types with the right specs. By the end of the sale finer microns (18.5 to 17.5) were just in sellers’ favour as 17.5 and finer lost10 cents. This micron range did stage a rally on Thursday lifting by 20 to 30 cents - maybe a good sign for next week’s super-fine sale in Sydney. Medium types suffered the most with losses ranging from 15 to 25 cents. Despite the falling market some results did defy gravity. A 19.5 micron lot, 3% VM lot with 23nkt from Tooraweenah made 25 cents better than the indicator. Two FNF lots from Tomingley at 18.2 and 19.6 made 66 and 22 cents more. Two lots from Cobar, both a bit tender with 2.5% VM, looked 20 cents higher than their indicators, buyers certainly picking the eyes out of the market as types with the right specs in good demand.

Merino skirtings fared about the same as their fleece counterparts. After a tough opening day where all types and descriptions backed off by 20 cents, 5 to 8% VM most affected, the final day of the sale saw renewed interest as, surprisingly, the low VM types <3% were in buyers’ favour as all other lots were unchanged from the previous day. Cardings took their biggest hit for some time as both MCIs on the east coast lost 20 cents. Locks were the worst hit with falls of 30 cents, crutchings fell by 20 and stains gave up 10 cents. The ever-increasing volume of crossbred wool and the shift in exchange rates coupled with a lack of enquiry saw the crossbred sector have its largest falls for some time. Losses were across the board and large as falls ranged from 30 cents for 32 micron to a massive 65 cents for 26s. The 28 micron indicator has now lost over 100 cents in the past month.

Most wool manufacturers seem intent on waiting to see what consumer sentiment of woollen garments in the Northern Hemisphere winter will be like before committing to future raw wool purchases. This normally coincides with the peak offering period in Australia. This is more vital this year as stocks of raw wool in front of machinery are at low points so any major change in consumer sentiment, up or down, will see a radical change in greasy wool prices either way. This time of year was always a noted time for large offerings. Not the case this year as January to March and April to June offering much more than the 3^rd quarter of the year. That said, next week's 47,000 bale catalogue will be the biggest since the opening sale of the season testing the market once again. Outside influences such as currency are playing their part. At 72.55 cents the A$ is on a 7 day rally (the longest in 2 years) and will not help the wool market. This week finally saw the Trans-Pacific Partnership signed after 5 years of negotiation. This will eliminate tariffs on textiles and apparel almost immediately. This TPP includes the USA (the largest consumer of apparel in the world) and Vietnam, the 3^rd biggest emerging market apparel supplier. The tariff saving will be 16% - 33% per item.

Some ram sale results over the past week include: Dunbogan topped at $3,600 for an average of $1,360; The famed Pooginook stud from Jerilderie cleared all 240 rams to top at $25,500 to average $2,110 grossing over $500,000 - a great result. Next week we move to a Thursday sale and, with Sharpy back on deck, all should run smoothly, even the market???

Main Buyers (This Week)