WEEKLY MARKET REPORT

Week Ending 21^st November, 2014

 AWEX Northern Micron Indices Comparison

STEADY AS SHE GOES …

The big anticipated offering failed to eventuate again this sale as growers withdrew 2,200 bales across the three centres to offer 48,000 - the 2^nd largest sale for the calendar year. Wooltrade sales kept ticking over which gave us hope that the market should be okay despite the large selection and the A$ seemingly stuck around 87 cents and, of course, the recently signed FTA with China giving new hope for more prosperous times to come for woolgrowers!!

The market had the staggers early in the week as NZ Merino offered its largest catalogue since February (2800 bales of which 41% was passed-in) - the biggest daily pass-in rate in 8 years as 16 and 17 micron types struggled with losses of 20 to 30 cents. The remainder of the sale saw little change in Sydney as its regional indicator was unchanged for the week, 1075 cents, as 19.5s were the best performers up 5 cents while 18.5s lost 7 cents with all others somewhere in between. Fremantle recorded the most movements as gains of 5 to 20 cents saw its indicator crack 1100 cents to 1101. Melbourne dragged the chain under the weight of its big offering as all indicators were in buyers’ favour bar 16.5 to 17s and 20 and 21s, back by 15 cents. The EMI gave up 3 cents - now 1047 – and, in US terms, fell 13 cents to 900. As has been the case for some time, lots with the right specs, low mid-breaks the most critical, are making a premium of up to 30 cents above the indicators even with 2% VM. The highlight of the sale were the 4 bales of 1PP branded EWE TECH, from the New England region which made between 4500 and 4750 cents that measured 14.7 to 15 micron, 0.1 VM, avg 79mm, 77% yield and 48 n/kt, a just reward for magnificent wool, to be spun and weaved in Biella, Italy.

Skirtings maintained their momentum without moving in any real direction in price. All types and descriptions remained rock solid throughout the sale with some better types dearer. Cardings lifted in price as all types looked 10 to 15 cents higher, as the MCI on both sides of the country closed in on 800 cents. Crossbred offerings are at their peak with this week being the largest offering in 9 months - 8870 bales (18% overall). Crossbreds made up a massive 24% of the Melbourne total (6,046 bales). Despite this “mountain” of wool the market held firm to sellers’ favour, a good result.

A good week considering the volume of wool about and higher currency rates with demand okay, but definitely not bullish. The A$ fell sharply to below 86 cents amid a tumbling price for iron ore, its price halving in the past 12 months from $120/ tonne to $60 and bearish commentary from the RBA. A concern coming out of Japan (one of our big customers for woollen garments) is their economy slipping into recession this week. To date, national offerings are only 3,000 bales less than last year but core test figures are well back reflecting volumes of “held” wool coming onto the market now that the less than predicted harvest in some areas is all but wrapped up as some growers fall back on wool for some much needed income that the poor harvest didn’t deliver. Next week’s estimated roster of 53,800 will drop by a bit to have about 50,000 on offer. We sell on Wednesday with 970 bales on offer; hopefully the market can soak up this volume without too much change in price.                                                                    

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 14^th November, 2014

AWEX Northern Micron Indices Comparison

CONSOLIDATION …. TIME TO THINK OF FUTURES

The large forecast sale of 49,000 bales didn’t eventuate as 45,000 were offered (7% withdrawn) and on the back of a stronger market only 6.5% passed in. The currency fall to 85.5 cents a few weeks ago was the catalyst to book up plenty of wool and buyers certainly kept chasing all types and microns this sale following on from the previous week. The only thing that may have dampened the progress of the market would be a rebound in the exchange rate as one prominent exporter said “the good types might hold and the off types back maybe 10 cents.” This certainly looked to be the case as sales opened on a softer note on Tuesday in Melbourne by up to 5 cents as the A$ rebounded up to 86.9 cents. Despite the strengthening currency the market turned around later in the week to have 18.5 to 23s 10 - 25 cents higher. Finer types had a mixed sale as 17 and 18s only 5 dearer with 16.5 and 17.5s back by the same margin. The EMI posted an 8 cent rise, now 1050, with a rise of 19 cents to 913 in US terms.

Good premiums still exist for types with the right specs. A fine, FNF sound clip from Bathurst sold for 50 to 140 cents higher than their indicators and lots from Trangie with 6 to 8% only discounted 40 cents from a FNF type (those types normally 80 to 100 cents back).

Most of the rises looked to be confined to the fleece room as skirtings again had a quiet sale. There was one subtle change as 17s and finer (up to 5% VM) ended the sale in buyers’ favour with all other types and descriptions fully firm over the course of the week. The gap between the various microns and VM levels in skirtings is as close as their fleece counterparts - only 100 cents between 18 micron with 4% VM and 19 micron carrying 20% VM. Cardings had a mixed sale as a 3 cent fall in Sydney was negated by rises of up to 5 cents in the other centres, Fremantle’s MCI now at 797. Crossbreds continued to strengthen, up another 5 to 15 cents. 28 microns are at a 3 year high -698- and only need to add 35 cents to be at a 12 year peak.

With the market on the rise, a closer look at forward prices would be wise as prices edge towards 1200 cents, this being an historically high level for 21s. As the above table illustrates, we only have 30 odd cents to go before we hit 1200. We would advise clients to place orders for those who wish to get set, rather than the ‘wait and see’ approach and risk missing out on a peak price. Ring your rep for any further info.

Ram sales are done and dusted in this area for now with focus now in the Southern parts of the state. On the whole most studs have reported clearances well in the 90 to 100% sold and average commonly $200 to $400 higher than last year. Some more results worth mentioning: Wyuna at Armatree $1100 average; Bella Lana form Wellington a $1350 average (up $280 from last year); Allendale, also from Wellington, an increase of $170 from last year to average $1550; and Grogansworth from Bowning an average of $1735. Next week will see the largest national catalogue for 10 months (50,200 bales) but no signs of nerves from the exporters as the market was solid through to the final lot yesterday and the A$ at 86.10 US cents this morning. We sell last on Thursday with 925 bales on offer.                                      

Ag Concepts Fwd Prices at 14 November

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 7^th November, 2014

AWEX Northern Micron Indices Comparison

A SAD WEEK FOR MACWOOL

A condensed sale in Melbourne due to the Melbourne Cup public holiday saw both east coast centres operating on Wednesday and Thursday with Fremantle holding a one day sale on Wednesday. With Cup celebrations out of the way and winnings collected, wool sales continued in the same vein as the previous Thursday, which traditionally is a good lead as to what might transpire in the next week. The opening day posted solid gains with emphasis on the stylish finer selection <18.5 micron. Thursday saw more intense bidding as the downward shift in the exchange rate to 85.5 cents on Wednesday night from 87 cents was enough to push the buyers to chase the market up by 10 to 20 cents. The EMI added 13 cents to its value, now 1042, as most indicators rose by 10 to 25 cents to claw back half of the past fortnight’s losses. Again, the types with the right specs were keenly sought after as some of our medium lots made up to 30 to 40 cents better than the indicators. There was good support for the lower spec types gaining up to 20 cents. The sharp correction in the exchange rate was put down to a fall in metal prices and the results of mid-term elections in the US which has wrestled power from President Obama and the Democrats to the Republicans two years out from the next election, essentially rendering Obama as a “lame-duck”.

Room 2 buyers were more subdued than their fleece counterparts as just the very best super-fine types moved up in price to the tune of 20 cents with all other microns and VM levels rock solid. The largest oddment catalogue since March (6270 bales, 15%) didn’t spook buyers as subtle rises had both centre’s MCI up by 5 cents as all types and descriptions lifted by 5 to 10 cents. The second biggest crossbred catalogue of the season, 6900 bales, didn’t bother the exporters either as 10 to 15 cent rises across the board were the norm.

On a sad note, we lost one of our great supporters and one of the wool industry’s most astute sheep men on Tuesday. Robert Coddington of East Roseville Stud passed away in Dubbo at 74 years of age. Robert was our very first client back in February 1988 and he and his family have been loyal clients ever since. In it’s hey day the East Roseville Stud was one of the leading merino studs in the country and for years was a major source of AI semen for many studs with some very well known sires among its ranks. Robert was a lovable character, always entertaining and a mentor for many young aspiring sheep men who today rank at the top of their game. He often gave up his time generously tutoring us on the finer points of sheep classing and breeding good wool. He will be sorely missed; his service will be 1pm Tuesday at Holy Trinity Anglican Church, Brisbane St, Dubbo.

A good week as prices improved and Wooltrade sales continued this morning. Hopefully the A$ has come down to a new level. This, coupled with a smaller offering this week (41,500 bales), certainly played its part to kick the market along. Next sale has 49,000 bales up nationally for buyers to fight over.

Ag Concepts Fwd Prices at 7 November

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 31^st October, 2014

AWEX Northern Micron Indices Comparison

MARKET LEAVES EVERYONE CONFUSED!

The anticipated big offering didn’t eventuate as 5,500 bales were withdrawn across the three selling centres leaving 47,500 on offer. This coupled with 14% -7,000 bales- passed in left only 40,000 sold to the trade. This drop in wool that actually exchanged hands, however, failed to give the market any traction as the EMI slipped another 7 cents, now at 1029. In US terms the EMI sits at just 902 cents, a 137 cent (13%) drop from 12 months ago, helped by the downward shift in the exchange rate. This compares poorly to a 6% fall from 1095 cents a year ago in Aussie terms. The exchange rate over the same period has fallen 7 cents, sitting at 87.55 US cents this morning.

The market followed last sale’s pattern except for one thing - Thursday saw somewhat of a recovery to give hope of a stable market for next week. NZ Merino opened proceedings again this week with their largest offering since February but, in a sign of things to come, had mixed results. Super-fine lots with poor specs lost 20 cents with 18s and broader finding good support to be dearer by 10 to 20 cents. Wednesday saw a similar pattern as good types were in good demand with the lower spec types losing another 20 to 30 cents as 19s and broader gave up another 10 cents. Thursday saw a recovery as all types came up to levels at the start of the sale. By week’s end losses were restricted to single figures (4 to 8 cents) bar 17s, back by 10 cents. 19.5s bucked the negative trends to post a healthy 12 cent gain. As we said earlier, good wools are still in demand. Some of our better super-fine lots made from 50 to 150 cents higher than their indicators with some FNF and “B” fault medium types up to 50 cents better indicating that lots with the right specs will make good money above the indicators.

Skirtings had an ordinary sale as the buyer support on the final day was not there as was the case in room 1. Most types looked 20 cents cheaper with medium micron lots and coarser with <5% VM losing up to 25 cents by the final hammer on Thursday. Once again locks let the carding sector down as they lost 10 to 15 cents over the week with stains and crutchings resisting any drop in the market to remain solid.  Crossbreds also became victims of the negative tone as finer microns (< 26)  lost 20 cents, mediums back by 5 to 10 and the broader types, 32>, quoted as unchanged.

An erratic sale this week as big losses early in the week were followed by a late rally to leave us still in the dark as to which way the market will track through to the Christmas break, a period of six sales. This last day surge in the market on Thursday saw the EMI post a 6 cent gain for October, which is fairly typical as only 3 Octobers in the past 10 years have finished in the red. Most exporters can’t see much change in the market for the short term and almost impossible to call in 2015 as to its direction, except for the odd shipping squeeze or rally. The rises we saw in the first half of the month have gone - we’ve seen 5 days of flat-lining, 5 days of rises and now 5 days of losses! National volumes back off to mid 40,000s for the next few weeks and this might help the market. For what it’s worth, “Protectionist” in the Cup!!

Ag Concepts Fwd Prices at 31 October

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 3^rd October, 2014

AWEX Northern Micron Indices Comparison

GRATEFUL FOR ANYTHING!

As reported last week, there were signs that we might be in for a solid market this week. As Macwool was first cab off the rank on Wednesday we can’t claim to have had the best of the week but it was a good sale for anything with reasonable strength and low VM, with few potholes. Many people have been asking why the market hasn’t reacted better to the lower dollar which dipped under 87 cents US at one stage through the week. Well the short answer is that the majority of the offering hasn’t been good enough (at least in the strength department) to engage buyers into a buying frenzy. One example this week of a significant clip we offered saw the highest staple strength at 30 and mid breaks between 72% and 94%. Nationally this week only 35% of the adult fleece offering had a mid break less than 50%. Despite this, the week generally moved higher over the two days and Wooltrade was very busy yesterday and this morning as buyers scrounged to clean up and fill orders.

Merino skirtings and oddments were generally strong and posted small gains, however, we did notice a few of the high VM skirting lines a bit harder to gain good competition on, particularly as some of these have come from areas that received good autumn and winter rain and are containing a fair amount of colour as well.

Crossbred wools also edged higher and are closing the gap on a three year high; 28 microns had a very good week rising 13 cents to be within 10 cents of the peak. These types generally react quicker to currency movements so it was no surprise to see them dearer.

A few positives can be taken form this week looking forward. It appears the Aussie dollar isn’t about to rebound so buyers can be more positive about currency. The plethora of high mid break wools will decrease and we are already seeing fresh shorn clips showing the break split between mid and base now, which will help. Exporters are confident that the processing pipeline of raw stocks isn’t unseasonably high (unlike cotton) and quantities of supply are slightly below last year’s production figures. End of September test data from AWTA shows YTD weight down 0.2% compared to last year. Queensland continues to be a basket case down a further 41%, whilst Tasmania and SA are showing increases over 10%. NSW and Victoria are close to unchanged. AWEX offerings YTD show almost 17,000 bales less than last year; much of this could be sitting in broker’s stores.

It has been heartening to see the positive results from Ram Sales in recent weeks with many of our stud clients achieving record averages and clearances and one client, Kerin Poll, achieved the highest grossing sale of the season nationally. Next week stud clients, Cassilis Park, will hold their annual sale here at the Woolstore on Wednesday afternoon and Haddon Rig will hold theirs on property on Thursday 9^th. The following week Wyuna will sell Tuesday 14^th, Allendale on Thursday 16^th and Bella Lana on Friday 17^th with Grogansworth at Yass finishing the ram sale season for us on Monday 20^th.

42,151 bales are rostered for next week (about 2,000 less than this week) in all three centres with Macwool set to offer on Thursday the 9^th.

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 26^th September, 2014

AWEX Northern Micron Indices Comparison

SAME OLD, SAME OLD ….

The downward shift in the exchange rate is yet to help the wool market as the AWEX EMI finished the sale unchanged at 1023 cents as the AUD$ lost 1.5 cents (now down to 88.15 cents), a 7 month low. The EMI did actually move - down 1 cent on the opening day then regaining that cent on Thursday. Just two indicators recorded losses, 16.5 back 8 cents and 20s off by 2. All other microns were up to 6 cents higher. The fall in the 16.5s could have been due to an over-supply in this category as this was the 2^nd designated Superfine sale of the season. Why they persist with this concept and why some brokers seem to stack these sales with “too much” of the same type, notably superfines, when demand can’t cope with the big volume of the same type in the one sale is only hurting the grower with the risk of lower prices. Time and again we saw Newcastle sales take a tumble due to the over-supply of the same type and still the lessons haven’t been learnt.

In US terms the market took another hit as the exchange rate fell. 16 cents came off the indicator, now 902 in US terms, 12% or 126 cents behind 12 months ago. In the same time the currency has fallen just 5 cents (6%). Most experts see the shifting exchange rate caused by diminishing Chinese growth prospects, low commodity (coal and iron ore) prices and interest rate expectations as the causes for change in sentiment for the currency. Again this week, as over the past month, good spec types were keenly sought after with tender, high-mid break lots losing ground, widening the gap, although the odd sound lot, +40 nkt, with very high mid-breaks made up to 15 cents better than their indicators with VM levels up to 2.5% attracting little or no discount at all.

Skirtings looked to suffer from the same problem as the fleece room - too much of the same type! Buyers couldn’t handle the big volume of sub 19 micron up to 5% VM, these down by 5 to 10 cents, with the broader burrier lots solid. Cardings lost some ground as locks fell about 5 cents while stains and crutchings remained solid. Crossbreds enjoyed the drop in the AUD$ with most types in this sector adding 5 to 10 cents.

More news from the Nanjing Wool Conference: The mood was positive and upbeat although two big issues are concerning Chinese manufacturers. The disposal of effluent (as processors spend capital to upgrade their recycling and disposal methods to comply with new regulations to take effect from January 1^st 2015) is drawing capital away from purchasing wool. The other is, of course, access to credit which is still hindering the purchasing patterns of some mills. There is concern over the imbalance of wool either side of 18.5 micron, too much finer than this micron and not enough broader.  The “non premium” being paid for finer types is due to hungry fine wool as well as these microns being grown in non-traditional fine wool growing regions that can’t keep dust and burr out and are unable to grow the “style” that attracts premiums. Also, a surprising comment from Chinese agents and users that there were “too few exporters”. With over 500 delegates this is by far the premier trade event on the wool calendar. Exporters found good opportunities to write new business with most reducing or eliminating held stock positions and quick shipment for new orders taken. This augers well for the short term as cash becomes available locally for buying. We sell next Wednesday, with the national catalogue the largest since February, totalling 47,000 bales.

   Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 19^th September, 2014

AWEX Northern Micron Indices Comparison

CURRENCY FALL NO HELP YET!

The wool market looks to be in a tight price bracket as the benchmark AWEX EMI could only manage a 1 cent rise to 1023. Since the market’s 23 cent recovery in the opening week of September to 1025, we have seen the market move just 3 cents over the past 6 selling days. In the same period the exchange rate has fallen to a 6 month low of 89.74 US cents - a fall of almost 4 cents. One wonders where the market may have been if not for the favourable shift in the $, we may well have seen the EMI fall below the psychological 1000 cent mark.

Looking at the individual microns you would think not much has changed. There was very little movement for 19.5 and finer, either unchanged or in sellers’ favour, this due to the good selection of best top-makers on offer. Conversely, the broader types from 20 to 23 micron averaged a 10 cent fall, again the quality of the selection playing its part as tender and high mid-break lots attracting heavy discounts conspired to see these indicators fall. The volume of these inferior wools is certainly weighing the market down. This can be attributed to the break in the drought in some areas 6 months ago as the sudden change in feed for a lot of sheep put a break in the wool and this occurring exactly half way through the growing season, thus big volumes of tender wool with high mid-breaks are hitting the market at the same time with exporters struggling to place all this “same wool” into orders. This problem will dissipate as we move further into spring shearing as the volume of tender wool may not drop but the position of break will move towards the tip of the staple making it easier to place these types into orders.

Skirtings sold to a similar pattern as the fleece room. The better low VM types edged a little dearer while the lots with cott and colour finished the sale in buyers’ favour. Cardings had an up and down sale as opening day’s losses were made up on Thursday to leave all types unchanged for the week. Crossbreds looked to benefit most from the downward shift in the exchange rate as rises of 10 to 20 cents were commonplace.

Ram sales are in full swing. A few results so far: Kerin Poll, 100% clearance, average $1,978; Gullengamble, average $1,793, up $370 from last year; Roseville Park, 100% clearance, average $2,456; and Calga Dohnes (Coonamble) all sold to average $1,662. Merryville sold 151 rams to average $1,390. Darriwell Stud at Trundle had their average lift by a whopping $550 to average $1,783 for a total clearance. The meat sheep studs are also performing well. Narranmore from Elong Elong averaged $974, up $200 from last year for their poll Dorsets while New Armatree’s Border Leicesters averaged $913 with both studs selling all rams offered.

All delegates are back from last weekend’s conference at Nanjing. Whilst business wasn’t brisk, it was solid, but cautious with concerns about demand levels in Europe still front and centre. It was good to see acknowledgement from the fine-wool processing sector (p11, “The Land”) that all is not good in regards to price levels and quality of wool coming through from non traditional fine-wool growing areas. However premiums are now in place for types meeting the right criteria, a welcome initiative from the Italian spinners and weavers.

Next sale will see volumes similar to this week with Sydney holding a designated Super-fine sale with a keen eye on how these types will perform. We sell on Thursday. Hopefully the favourable exchange will kick things along next week. 

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 12^th September, 2014

AWEX Northern Micron Indices Comparison

THIS LOOKS TO BE THE LEVEL

Not quite the result we had hoped for at this week’s wool sales as prices couldn’t maintain last sale’s levels. The fall was marginal, - 3 cents (0.3%) to have the AWEX EMI at 1022. In US cent terms the fall was larger, 18 cents to 940, this due to the currency’s downward shift to 90 cents (the lowest in 9 months), a fall of 3 cents in a week. This could create some business as the chance to book up wool while the exchange rate is more favourable may prove too good an opportunity to let slip as an upward shift would cost exporters and Chinese mills money and cut margins.

The market falls were disappointing but small. 18.5 to 21s gave up 7 to 13 cents as did 16.5 to 17 slipping 7 cents. Some stylish types in 17.5 to 18 micron range saw these record marginal movements either way. Despite the negative tone, super-fine microns and best top-maker and spinner styles performed well. Some best top-making FNF lots in our catalogue with nkt readings over 40 and extremely high mid-breaks of over 90 made up to 40 to 100 cents above their indicators. On the flip side, however, tender lots with high mid-breaks saw their discounts increase sharply, commonly 60 to 100 behind the indicator prices. Prem shorn types continue to shine as one lot measuring just 58mm was only 35 cents from a full length type.

Skirtings looked to escape the hiccup that the fleece room experienced as subtle rises were recorded on both days. By week’s end most types and descriptions, regardless of VM, were quoted 10 to 20 cents better. Two growers in this week’s sale from Orange and Yeoval would testify to the great prices for these types as their “BKN” sold within 75 to 120 cents of their respective indicators -17.5 to 19 micron- similar prices and, in some cases, better than low-spec fleece types. Their BLS performed just as well coming within 90 to 100 of the 19 and 19.5 indicators, a great result that lifts clip averages! Cardings had a solid sale with little or no change on the Eastern Seaboard as Fremantle added 12 cents to its MCI, now at 781 cents, leaving all 3 centres within 10 cents of each other. Crossbreds had a mixed sale as Sydney’s selection rose up to 5 cents while Melbourne gave up similar amounts.

This weekend sees the 26^th Nanjing Wool Market Conference being held in China. As far as the Chinese are concerned, this is their main gathering to nut out industry issues, look at future developments as well as new market opportunities and cement current relationships. Participants include all sectors of the trade from growers to spinners and weavers and manufacturers. This year’s theme is ENJOY LIFE, ENJOY WOOL. Wool buyers see this as a great chance to do business face-to-face at (hopefully) current market rates as well as feeling the pulse of processes and how demand is shaping up for the next 6-12 months. One exporter reported that plenty of business is being written, around the present market rates but, with a cautious overtone, he sees the short term outlook (till Christmas) as flat with the odd spike like last week short lived - a week or two here and there depending on shipping deadlines and currency movements.

National quantities grow to 46,000 bales next week (the biggest since mid February) as Melbourne holds a 3 day sale - their first for some time. The catalogue in the north grows from just 8,000 this week (the smallest in 4 months) to 11,000. Not much change is expected in prices but the lower exchange rate might help.

Main Buyers (This Week)

WEEKLY MARKET REPORT

Week Ending 5^th September, 2014

AWEX Northern Micron Indices Comparison

A STRONG MARKET … MORE TO COME??

Last Thursday’s small recovery gave us hope that the wool market had bottomed out and signals of an improving market were in place. This came to fruition this week as a steady rise on the opening day led to higher increases on Thursday as the AWEX EMI posted a 23 cent rise for the sale (now up to 1025) - the best weekly rise for 5 months. The two centres on the Eastern Seaboard averaged 23 cent jumps while Fremantle was the best performing centre with a 39 cent climb to 1081 cents as their individual indicators put on 40 to 50 cents.  Sydney’s rises weren’t that pronounced - up by 20 to 40 cents while down south, most gains were in the 25 to 50 cent range.

It looked as though nothing missed out on this rise. As we have said in past reports, and is nearly always the case, lower spec off types played catch up to their more sought after better style counterparts recording good rises to close the price gap significantly. We had a lot with 5% vm just 15 cents off the indicator (normally a discount of 50 to 60 cents) and two other lots over with 2% vm within 5 cents of an FNF type, one with a mid-break over 65. A few other fleece lots that fitted nicely into exporters orders made up to 25 cents over the indicator. Just 8% of all fleece wool was passed in, the best clearance rate for this sector in months.

Skirtings also benefited from the increased buyer activity but not to the extent of the fleece room. Both days saw subtle rises to see all types and descriptions lift by 15 to 20 cents with 94% cleared to the trade. Cardings saw prices improve to the tune of 5 to 10 cents with locks the main type to help the MCI rise by 10 cents (in Sydney) to 779. All three centres are now within 10 cents of each other, 769 to 779 in this sector. Crossbreds improved with a 5 cent gain in Sydney and Melbourne’s selection 10 to 15 cents higher.

The market staged a good recovery with good volumes of business written; the AUD$ lower; national quantities smaller than usual; and the release of AWTA testing data for August all playing a factor in the rising prices. It could also be a case of de-ja-vu as this week 12 months ago the EMI rocketed up by 64 cents, this following a 52 cent rise the previous sale – a 116 cents, 10.5% jump in 2 sales! No such luck this year but a 20 odd cent lift is better than none. It is interesting to note the second and third weeks of September last year saw the EMI lose 56 cents, something that won’t happen this year I’m sure. The AWTA figures released for August show a decrease in lots tested (2%), but a 3% rise in bales and weights compared to last year. When looking at the progressive totals we are back 5.6% on lots tested and a 1.1% drop in bales and weights to last year - something that exporters would be well aware of. Only 37,000 bales are catalogued next week. We should see another good result for the grower.

Ag Concepts Fwd Prices at 5 September 2014

Main Buyers (This Week)

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

1025 cents é 23 cents compared with 29/08/2014                0.9347 é 0.0010 compared with 29/08/2014        

Northern Market Indicators (AUD cents/kg clean)

1042 cents é 21 cents compared with 29/08/2014

WEEKLY MARKET REPORT

Week Ending 29^th August, 2014

 AWEX Northern Micron Indices Comparison

SIGNS OF A RECOVERY

A mixed sale as a softer opening session was tempered by a solid finish as the benchmark AWEX EMI just kept its head above water to add only 1 cent - now 1002. After the first day of sales, as most microns lost 5 to 10 cents, the EMI did dip under 1000, the first time since early April it has been at this level. Buyer sentiment changed quickly as business was written on Wednesday night and was converted into a rising market on Thursday. By week’s end 19 to 21s were in sellers’ favour as 17 to 17.5 quoted as unchanged with 16.5, 18 to 18.5 and 22s off the pace by 5 to 10 cents.

This sale was the opening designated “Australian Superfine” for the season in Sydney with Melbourne hosting a stylish Launceston selection. Nine bales in Sydney achieved 1PP certification, the highest industry recognition of style and preparation. Despite this cracking selection only 3 bales bought more than 1500 cents. The premiums for fine, better style FNF types with strength readings greater than 45nk/t still exist as buyers are paying 40 to 70 cents above the indicator, even when the mid-break reading is above 75. The finer the micron, <18 the price differential is commonly 100 cents. On the other hand, once the strength drops below 40, then discounts can be savage for the high mid-break types, regularly up to 100 cents creating a “two tiered” market.

The skirting market also looks to have split in two as the fleece market has done. The better style and length types below 3% vm improved as the sale progressed with the burrier lots (5% and higher) lost ground to finish the week 5 to 10 cents lower. Two buyers dominated this sector, Aust. Merino Exports and Tianyu securing 46% (3,250 bales) of the offering. Crossbreds benefitted from more buyer activity as the increased competition saw a lift in prices of 5 to 10 cents, bar 26s which were 5 cents off the pace. As was the case with the skirtings, even with more competition, two buyers dominated, Techwool Trading and Fox & Lillie buying 43% of this sector. The pasting that cardings took last sale also steadied as all descriptions were fully firm to 10 cents higher.

The National Ram Sale and Sheep Show concluded yesterday with a tough sale to finish the event. The Supreme Champion went to the “Grathlyn” ram that was the sale topper at Bendigo in July when he was sold for $25,000. Lot 1 from local stud, Roseville Park, topped the sale at $25,000. On property ram sales start in earnest from next week. If you require any assistance in ram selection please do not hesitate to contact us. Next sale will have a national catalogue of 41,000 bales. We sell on Wednesday with a solid market on the cards.     

Ag Concepts Fwd Prices at 29 August

Main Buyers (This Week)

1002 cents é 1 cents compared with 22/08/2014           0.9357 é 0.0060 compared with 22/08/2014        

Northern Market Indicators (AUD cents/kg clean)

1021 cents é4 cents compared with 22/08/2014