WEEKLY MARKET REPORT

Week Ending 28^th March 2013

AWEX Northern Micron Indices Comparison

STILL LOOKING FOR THE BOTTOM

The disappointing run of the past 6 to 8 weeks continued unabated as the market lost ground across all sectors in the final sale of this series as all participants take a breather next week for the Easter recess. After last Thursday’s firm market we thought the bottom may have finally been reached. Sadly, this was not the case as the falling market gained momentum as the sale progressed to have all fleece indicators falling 10 to 35 cents with most of the damage on the final day. Medium types from 20 to 24 micron and 17.5 and 18.5s suffered the least, giving up 10 to 20 cents whereas the finer indicators, as has been the case in previous sales, took the brunt of the falls losing 20 to 35 cents. This week’s sale has been a mirror image of the past month or so as the finer indicators have been losing more ground than the medium types. Emphasis again was on the high mid-break lots with very little or no discount on the lots with a low mid-break. In fact we found a few of our lots made more than the indicators. The peak of the market since Christmas was at the end of January when the EMI was 1138 against today’s level of 1059, a 79 cent fall. Fine indicators out to 18.5 have fallen an average of 154 cents in that time, whereas 19 and 19.5s lost 104 cents with the medium to broader indicators (20 to 23) having given up about 62 cents. Melbourne again had the bulk of the national offering (52%) with Wednesday its 5^th largest selling day for the season (13,600 bales). Conversely, in Sydney, only 11,000 bales were on offer for the entire week, its 5^th smallest sale for the season thus far. This sale saw the run of falls stretch to seven consecutive selling days in a row - the longest losing streak since October. The average weekly offering since Christmas has been 49,000 bales, the largest since the corresponding period in 2008 when this figure was 53,000.  

Skirtings suffered the biggest falls on the opening day as types with up to 5% VM were quoted 20 cents lower and burrier lots 30 cents off the last sales quotes. The rot did stop on the final day as all descriptions were fully firm. As we have said in past reports this sector of the market is still in good shape when compared to fleece prices. BKN’s from areas like Gular and Tooraweenah are still making over 600 cents! Cardings finished the sale just off the pace as LKS were in buyers’ favour with CRS and STNs 5 to 10 cents cheaper, although LMS looked to have made a recovery from last week’s hiccup. This part of the market is also in a good state as LKS and CRS are making 400+ cents  with one lot of CRS from Tilpa making over 600 cents, although knowing the buyer and the grower very well,  we feel this was a set-up!  Crossbreds had a mixed sale with finer types in the 25 to 27 micron range up to 5 cents better, while 28 to 32 microns looked 5 to 10 cents off.

As was reported last week the release of wool from bonded stores or traders in China will filter through the market and, with shearings ahead of schedule and wool cuts back due to the dry Spring/Summer period, the smaller quantities post Easter should help the market. We are rostered to sell on Thursday, 11^th April with a catalogue of 1100 bales. For all you clients that are computer literate, we are now connected to Facebook and Twitter. So, if you have a profile in either or both, befriend us on Facebook, or follow us on Twitter. Also we are in the process of updating our website so soon you will be able to view your local weather and also stream live radio from 2WEB. Have a safe and happy Easter. Hope the Easter Bunny and rain find you!

Ag Concepts Fwd Price Trades W/E 22 March, 2013

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

1059 cents ê 22 cents compared with 21/03/2013                             1.0466 é 0.0087 compared with 21/03/2013

Northern Market Indicators (AUD cents/kg clean)

1082 cents ê 20 cents compared with 21/03/2013

WEEKLY MARKET REPORT

Week Ending 22^nd March 2013

AWEX Northern Micron Indices Comparison

         THINK WE FOUND THE BOTTOM

It’s been a disappointing couple of weeks with this week following on from last week and falls across nearly all categories. Unfortunately it has been the fine wool indicators that have shed the most with 18 microns losing 76 cents over two weeks; 17 microns have lost 64 cents; 19 microns 59 cents; and twenty micron 49 cents clean. The trading range for the middle micron merino types has been no more than 50 cents for over two months and we have seen the highs and lows of that range over the last four selling days.

Merino skirtings and crossbreds have been much less affected with more modest falls whilst the carding indicators have traded almost unchanged. The EMI over the two weeks of selling has lost 36 cents.

The good news was that by Thursday this week it appeared to have stalled or at least found a bottom, which is what we have been told would happen by some of the major exporters. Their view for weeks has been that supply and demand are in reasonable balance and it would take something more than minor currency movements to change the dynamics of the market. So whilst weekly offerings for several weeks are in the high 40,000s to low 50,000 bale weeks (which they have been for weeks) then there was no reason for the market to rise. What apparently has happened in China is that some stocks of greasy wool either held in bond stores or by traders were released into the market causing our market to take a step backwards. We believe there is no cause for panic and that enquiry has been good, particularly for May shipment which leads us to believe that after Easter should be OK.

Wool buyers this week were keen to discuss the woolbrokers Buyers’ Service Charge, ie the charge we levy on buyers for buying from our catalogue. The reason for this was that Landmark and Elders just announced their new Dubbo charge and both are around $6 a bale higher than us. They state that they factor these differences into their pricing and pay more for our wool than those that are considerably higher. It is worth mentioning they said that both Western Wool and AWN are even higher again.

What is also worth mentioning is that the growers who jumped on the January spike and sold forward are looking good, and about 50-60 cents above current prices. We have many orders sitting there not traded with some of those orders looking a bit optimistic at present. The big message here is that good prices can be locked in, but it is important to be ready to move quickly when there is a spike in the physical market.

Having depressed you all with talk of a low point in prices a quick glance at bale averages this week should perk you up! The range of clip averages on typical merino clips from the central west was between $1500 and $1700 per bale and typical western division clips averaged from $1100 to $1350 per bale.

Next week we will offer just over 1000 bales on Tuesday with a national offering of 46,000 bales. There will be a one week recess after Easter where sales will then recommence and sell weekly until the second week of July. Quantities are sure to tail off during April and May as the effects of the dry spring/summer bite.

Ag Concepts Fwd Price Trades W/E 22 March, 2013

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

1081 cents ê 16 cents compared with 15/03/2013                               1.0379 é 0.0011 compared with 15/03/2013

Northern Market Indicators (AUD cents/kg clean)

1102 cents ê 17 cents compared with 15/03/2013

WEEKLY MARKET REPORT

Week Ending 15th March 2013

AWEX Northern Micron Indices Comparison

          DISAPPOINTING FALL BUT NOT PANICKING

The roller coaster ride that the market has been on since the resumption of sales in January kept going unabated this week as last week’s gains were wiped out as big losses were recorded in all three centres. Finer types took the brunt of the falls as 18.5 and finer tumbled by 40 to 60 cents (bar 17s) losing only 23 cents. In fact the 17 micron indicator was the smallest drop as 19 to 23 micron gave up 25 to 35 cents. The losses were similar in Melbourne and a little more savage in Fremantle as 30 to 45 cent reductions were the order of the day - except 23s which only lost 9 cents. The EMI has now dipped below 1100 cents, now at 1097, its lowest point since the third week of January. The trading range for the EMI has been pretty tight, 1110 to 1130 cents, since Christmas. Only on four occasions has the indicator traded over 1130 cents and on 7 days has been under 1110. The highest point was 1138 cents in the first week of February when the market jumped by 39 cents. Apart from this big rise and the market adding the same amount three weeks later, and this sales 19 cent slide, the movements either way have been restricted to 10 cents or less. The rises since Christmas have seen the EMI add 87 cents whereas falls since early January have added up to 62 cents - a 25 cent overall rise for the market.

Skirtings also took a hit but not to the extent of fleece types. The low VM types fared ok across most microns as 18 to 19s with 5 to 7 % VM fell by 10 cents with broader lots fully firm on the opening day. The final day saw increased competition to have the market firm. This sector of the market is still pretty good as “BKN” from Tottenham, Engonnia and Quambone are  making mid 500 cents and Coonamble and Gilgandra lots realising just over 600 cents. It wasn’t that long ago fleece wool was selling just above these levels! Cardings recovered half of last sales losses to add 5 cents to see the MCI at 753 cents. Locks were the major contributor to this sector’s rise as they added 10 cents with stains and crutchings up to 5 cents better. Crossbreds had a mixed week but did end in positive territory after a final day rally except for the 30 micron indicator, slipping 10 cents.

The pass-in rate of 12% was indicative of the weaker market. In Sydney 10% of the fleece was not sold whereas in Room 2 (skirtings, oddments and crossbreds) the clearance rate was over 96%. This is a reflection of the good money being paid for the lower value lines and these types not having the price fluctuations that the fleece room is encountering. This has not been the first time that big price falls for fleece wool have been off-set by very little movement in Room 2. For a long time now price volatility has been far more evident for fleece types than skirtings etc. Just when we think the market is building momentum a fall like this week certainly takes the gloss off the market. We are yet to see the market string two consecutive weeks of rises this year. Even the buyers are perplexed, with many predictions of a “solid week” turning sour by week’s end with themselves wondering how sentiment can change so quickly - even day to day. With national volumes in the mid 40,000 for the next fortnight till the Easter recess, hopes were pinned on a solid market, but the strengthening exchange rate may have been a major factor in this weeks fall. Next week has 48,000 bales on offer nationally; we’ll offer 670 bales first up on Thursday. If recent history is anything to go by, the dartboard says we could see a solid market? 

Ag Concepts Fwd Price Trades W/E 15 March, 2013

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

1097 cents ê 19 cents compared with 08/03/2013                             1.0368 é 0.0116 compared with 08/03/2013

Northern Market Indicators (AUD cents/kg clean)

1119 cents ê 22 cents compared with 08/03/2013

WEEKLY MARKET REPORT

Week Ending 8th March 2013

AWEX Northern Micron Indices Comparison

          BACK TO SYDNEY – ALL’S GOOD!

With the forecast of a large national offering (57,000 bales) market predictions were varied for this week’s sale. By week’s end the catalogue had reduced to 54,300 but, as far as we were concerned, a big catalogue, selling last on Thursday and coming off a Newcastle sale had cause for not a great deal of confidence that the market could be firm or even increase in value. Melbourne’s opening didn’t instill us with any more confidence as 18.5 and finer and 21 micron and broader drifted 10 cents lower. All 3 centres came on line on Wednesday and recorded good increases across the 18 to 23 indicators, jumping 5 to 25 cents, with most emphasis in Fremantle. Finer types in Sydney suffered from the dreaded “Newcastle style adjustment” giving up 5 to 15 cents. Thursday’s market continued on from the previous day to add another 5 to 10 cents across the board with the fine lots (under 18 micron) settling down. Medium indicators fared the best as 19 to 22s gained 15 to 30 cents in all 3 centres. Fine types in the 17.5 to 18.5 range tended in sellers’ favour with the super-fine lots 5 to 15 cents back from the previous sales cracking selection from the New England. The EMI rose 7 cents to be at 1116. This small rise broke a four week run where the EMI fell by 30 cents. The best performing market was in Fremantle as a 20 cent rise has it’s indicator at 1151 - the best of the three regional indicators with Sydney at 1141 and Melbourne on 1099.

Skirtings started the sale in poor fashion as the comparison to Newcastle was too much to handle. The light VM lots bore the brunt of the falls, being reduced by 20 to 30 cents with the 5% and burrier types losing 10 to 15 cents. Thursday saw the market steady with finer types in buyers’ favour and the broader pieces and bellies tending a little dearer. What is noticeable this season is the superior style we are seeing. With the lack of rain in the spring, there is less burr and far less cott and jowl evident due to the lack of rain and tall grass that sheep were contending with over the past few wet summers. The carding market finally took a breather and lost 10 cents to sit at 748 cents. This may be due to the largest daily offering this season in Sydney. All types and descriptions were 10 to 20 cents cheaper. Fine to medium crossbreds looked 10 to 25 cents dearer.

Things have been relatively quiet on the OJD front for a while, until this week. The Wellington branch of NSW Farmers held an information day with several expert speakers addressing the big crowd. The consensus was that a commonsense approach should prevail with no lines on maps determining boundaries of “infected or free” areas. The LHPA vet from Yass spoke and stated that since the Gundair vaccine had been introduced in that region, growers had seen a dramatic reduction in sheep suffering from the effects of OJD, now down to a bare minimum. O  ne can only hope that other risk areas in the state follow the lead from Yass and vaccinations become widespread.

Great to see the market rebound with solid rises in the middle micron ranges. Viterra flexed their muscle to purchase over 10,000 bales - 18% of the national offering. A distant 2^nd was Techwool, Lempriere and Fox & Lillie, all buying between 4000 and 4500 bales each. National catalogues now will average around 46,000 bales for the next three weeks leading up to Easter. This coupled with the exchange rate at just over parity, 102 cents, and reasonable demand should see a steady, if not dearer, market for the fore-seeable future. We will offer a catalogue of 550 bales on Wednesday.

Ag Concepts Fwd Price Trades W/E 8 March, 2013

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

1116 cents é  7 cents compared with 28/02/2013                              1.0252 ê 0.0028 compared with 28/02/2013

Northern Market Indicators (AUD cents/kg clean)

1141 cents é  4 cents compared with 28/02/2013

WEEKLY MARKET REPORT

Week Ending 1^st March 2013

AWEX Northern Micron Indices Comparison

      CURTAIN FALLS ON NEWCASTLE

History was made this week as the curtain fell on sales in Newcastle. For some years now the viability of Newcastle functioning as a profitable selling centre has been in question as the four sales in the Spring and their  only Autumn sale was nowhere near enough to justify the $200,000/ year cost of renting show-floor space (52,000 bales were offered there this season as against 150,000 in  the 1999/2000 season). Finally the decision was made to move all sales to Sydney, thus alleviating the rostering problems that follow a Newcastle sale. Not all brokers sold in Newcastle and, inevitably, a backlog of wool was waiting for buyers in Sydney the next week. This is not to say that there may not be weeks of “super-fine” offerings, but all brokers will have the chance to sell in these sales and perhaps evening out quantities of specific types. As Don alluded to last week, hangovers were the order of the day on Thursday, in and out of the sale room as a farewell function was held on Wednesday night for 200 people. All sectors of the trade, old and new, were represented with the boss of Barberus, a major super-fine buyer and processor, flying out from Italy for the occasion. Wool sales commenced in Newcastle in 1928 under strong opposition from Sydney brokers which, at the time, were receiving 360,000 bales from north and west of Newcastle. The allocation of sales was hard to come by even up to the start of WW2 but, post war, things settled down and sales in Newcastle were a regular feature of the selling program. It quickly earned a reputation as the premier selling centre for super-fine wool in the country so much so that the Italians supported and often paid seasonal records for reputedly some of the best wool not only in Australia, but the world, and is still regarded in the same vein today.

As far as the market fared it was no fairy-tale ending to sales in Newcastle. The market opened well enough on the back of a cracking selection, but fell as the week progressed to see the EMI lose 10 cents to close at 1109 cents. Super-fine lots went okay, with 17 and finer 5 to 10 cents up with some specialty types quoted up to 100 cents better. The top price was only 2000 cents for a 12.9 micron weaner lot. 17.5 to 18 micron were in buyers’ favour to the tune of 5 cents as the medium indicators took the brunt of the losses (18.5 to 22 drifting 20 to 35 cents). Skirtings followed the lead of the fleece room, gaining up to 40 cents on Tuesday to see the finer, better style and length types hold their values while 19 micron and broader with 5 to 8% vm backtracked to post losses of 10 to 20 cents for the sale. Cardings tracked dearer for the sale as locks and stains added 5 to 15 cents with crutchings quoted as solid for the week. The MCI has risen 250 cents (48%) since August. One of the buyers we spoke to “early” on Wednesday night said a lot of locks made 700 cents!  In the X-bred sector, the small offering -9%- was hard to quote but looked just in sellers’ favour.

Buyers are confronted with the second largest sale of the season (57,000 bales next week) with Fremantle to offer their biggest catalogue of 13,000 bales in 10 months. This, coupled with AWTA figures released this morning, showing a 4.5% increase in bales and weights cored compared to last season will give the Chinese plenty of ammunition to put the brakes on the market. We sell last on Thursday with 1500 bales on offer - it could be a tough week.            

Ag Concepts Fwd Price Trades W/E 1 March, 2013

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

1109 cents ê 10 cents compared with 21/02/2013                             1.0280 ê 0.0040 compared with 21/02/2013

Northern Market Indicators (AUD cents/kg clean)

1137 cents ê  9 cents compared with 21/02/2013

WEEKLY MARKET REPORT

Week Ending 22^nd February 2013

AWEX Northern Micron Indices Comparison

         AN EACH WAY BET

The encouraging finish to last week’s market translated into some very solid rises on the first day of selling in Sydney with middle micron indicators rising 20-30 cents, and then losing most of it the next day. 20 microns, for example, rose 25 cents on Wednesday but lost 21 cents on Thursday to finish just 4 cents in positive territory. Whilst all the middle microns ended the week with pluses; the same couldn’t be said for the languishing fine wool market. An ominous sign for next week’s final, last ever Newcastle sale.

Fortunately for us, we were rostered on the first day and had a great sale with an almost 100% clearance. Not surprisingly, as the bulk of our fleece offering are middle micron types, these all sold well. But it was some of the Room 2 lines that were the standouts. Cardings have been very strong for some time, but crutchings from the Coolah district this week made up to 748 cents greasy (1177 clean) or $1386 a bale! These were unpicked and carried light stain.

Crossbred lambswool has also exceeded itself in recent sales with 50mm lines around 25 micron making close to 650 cents greasy. The broader end of the X-bred sector, 27 micron and coarser, has done little but finer than that has seen good gains and strong competition from Chinese and local scourers and carbonisers.

As usual competition came from China, China and China but it was local traders and their stock positions which once again caused the shifts in the market. From what we could gather, and looking at the buyers lists on each individual day, it is obvious this week that one company early in the week made a strong push for middle micron merino wool. Other buyers were a little perplexed as they felt nothing had changed. So on the first day some followed, but weakened as the day went on and on the second day the previous day’s leader dropped to number four hence the decline on Thursday.

One buyer commented to us today that he felt that supply and demand are reasonably well balanced at present and with offerings being fairly predictable and demand constant we could expect the market to trade in a 20-30 cent range around these levels.

From time to time we will see one of the major trading companies make a move for whatever reason; could be their own stocks get too high, could be they have taken forward positions they have to cover, or just a hunch. But there are five or six local non-Chinese traders who supply China and can influence the market on a weekly basis.

Back to Newcastle - for some it will be a sad day next Thursday when the curtain comes down on the iconic superfine selling centre. For many, they are quietly relieved as time has moved on and it has been seen as a disruption to orderly marketing. The Italian buyers are not at all happy with the closing of Newcastle and neither would be a large section of New England growers. Reunions and dinners are planned and I’m sure there will be a few hangovers in the sale room on Thursday. 13,015 bales will be offered there with 47,636 bales to be offered nationally.

      Ag Concepts Fwd Price Trades W/E 22 February

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

1119 cents é  2 cents compared with 15/02/2013                                          1.0240 ê 0.0122 compared with 15/02/2013

Northern Market Indicators (AUD cents/kg clean)

1146 cents é  2 cents compared with 15/02/2013

WEEKLY MARKET REPORT

Week Ending 15^th February 2013

AWEX Northern Micron Indices Comparison

         STILL NOTHING TO WORRY ABOUT

It was almost a case of deja vu for this week’s wool sale as the market drifted lower to the tune of 11 cents - 1 more cent than last week’s fall. Despite the market falling in a similar pattern to the previous sale, positive signs began to emerge on Thursday with a change in sentiment as the market was dearer in all three centres. The rebounding markets on the Eastern seaboard sent a good vibe across the Nullabor as their indicators had the best rises on Thursday to see their market post a 5 cent rise for the week - a good lead into where the market might go next week. Chinese New Year always brings with it uncertainty as to whether all mills will be chasing wool or staying on the sidelines for the week. A few buyers indicated good signals for a good market as the few financial problems that had interrupted buying patterns last week were behind everyone and all “LC’s” (letters of credit) had been opened and it was business as usual. This was not quite the case despite the enthusiasm from a few about the market’s fortunes this week. The week kicked off in Launceston, holding their stand-alone sale on Tuesday, this being their largest sale in 5 years - 8700 bales. There is always a “freight component” factored in to buying Tasmanian wool as the wool has to go to Melbourne to de dumped and containerised. This freight component saw a 10 to 25 cent reduction across the board. The cheaper Wednesday market in the three mainland centres gave way to a dearer sale on Thursday. The wash-up of the up and down sale resulted in all indicators losing 5 to 10 cents from 18 to 23 micron with the finer microns (17.5 and lower) giving up 20 to 30 cents. Top price for the week was 2980 cents for a 13.5 micron bale in Melbourne as we will see increased volumes of superfine lots onto the market over the next two to three weeks.

Skirtings mirrored the lead of the fleece room as the opening day’s losses were mostly recouped on Thursday. Bellies looked to have ended the sale a touch cheaper whereas most descriptions of pieces were quoted as unchanged when compared to the previous sale. Cardings edged forward with the MCI adding 7 cents to 756. Locks finished 10 to 20 cents up as crutchings looked 10 dearer while stains were unchanged. Fine crossbreds lost 5 cents while medium types posted a 5 cent rise, while broader lots were quoted as solid.

If recent weeks are anything to go by, next week’s sale should be dearer. Since sales resumed in January, the average weekly offering has been 50,000 bales nationally, this being 10% above the season average to date. These bigger offerings haven’t spooked buyers as the exchange rate is a little softer and demand is holding. Year on year offerings are line ball with the current season just 2000 bales up on the previous season with growers taking advantage of a rising market with 9.4% passed in - down 3% on the year before. The Woolstore open day was a great success attended by 150 growers and 5 studs making sales with growers having a look at how the store runs. Macwool sells first up next Wednesday with a catalogue of 840 bales. Let’s hope for a dearer market!

      Ag Concepts Fwd Price Trades W/E 15 February

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

1117 cents ê 11 cents compared with 08/02/2013                                         1.0362 é 0.0046 compared with 08/02/2013

Northern Market Indicators (AUD cents/kg clean)

1144 cents ê  9cents compared with 08/02/2013

WEEKLY MARKET REPORT

Week Ending 8^th February 2013

AWEX Northern Micron Indices Comparison

          A SLIGHT FALL – BUT NOTHING TO WORRY ABOUT

The pattern we have seen over the four opening sales since the Christmas recess continued this week. A good rise in the market has been followed by a fall in prices and this was no different over the past fortnight. Whether the increased quantity in volume (25%) from the previous sale or the up and down movement dictated market movements, one may be hard pressed to find out. Another factor that can influence price movement is if one company that dominates a sale for a week, they may back off slightly in the next sale thus making the market cheaper. The market retreated by 10 cents to see the EMI at 1138 cents. This, coupled with two other small falls has the market losing only 22 cents as against two weekly gains  totaling 78 cents - a positive lead of 56 cents for the past five sales since this years resumption. Not all indicators recorded losses, as finer than 17.5 ended the sale 5 to 10 cents dearer on the back of a very stylish Goulburn selection on Thursday. The top price for the sale was 1700 cents for a 14.7 micron lot. In a precursor to the next few weeks with a sprinkling of NZ wool in Melbourne and Goulburn wool in this sale, a day’s selling in Launceston next week followed by the final Newcastle sale in two weeks, there is a significant volume of fine wool coming onto the market in the next three weeks. Melbourne’s best price was 2290 cents for a 12.5 micron lot with 3.7 % VM. Superfine woolgrowers are counting on Italy to bolster prices over the next few sales before the large selection of these types fades to smaller quantities. All the indicators fell from 18 to 23 micron but the losses were on the small side - 5 to 10 cents - of which most occurred early in the sale, as the market firmed on Thursday with the superior selection on offer, although the Melbourne and Fremantle indicators did falter on Thursday, both giving up 6 cents.

Skirtings had a quieter sale than the previous few weeks with the better length and style, low VM lots up to 10 to 15 cent’s higher with heavier VM types unchanged or the odd lot irregular. Cardings continued to climb the price ladder as all three centres posted good rises, especially in Melbourne, rising 26 cents. The three MCIs are all now over 700 cents - both Eastern Seaboard indicators on 749 and Fremantle at 709. All styles and types gained 10 to 15 cents. Crossbreds looked a little easier as their indicators were quoted up to 5 cents cheaper.

The market keeps bubbling along despite the three little corrections we’ve encountered recently. At 103 cents, the A$ is at its lowest point for a few weeks. The RBA’s reluctance to lower interest rates this week is probably the reason for the fall in the exchange rate, but with consumer spending in December lower than expected, pressure will be on the board to drop the rate by .25% in 4 weeks at the March meeting. Hopefully the lower A$ will help the market to keep progressing forward. All is in readiness for our inaugural Wool Store open day and Last Chance Ram Sale tomorrow, commencing at 10 am. If you are thinking of turning up please do so! There will be plenty of rams to inspect and guest speakers to listen to and have a look at just what happens to your bales after they drive out the front gate.      

Ag Concepts Fwd Price Trades W/E 08 February

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

1128 cents ê 10 cents compared with 01/02/2013                                     1.0316 ê 0.0095 compared with 01/02/2013

Northern Market Indicators (AUD cents/kg clean)

1153 cents ê  5cents compared with 01/02/2013

WEEKLY MARKET REPORT

Week Ending 1^st February 2013

AWEX Northern Micron Indices Comparison

CHINA WANTS OUR WOOL

It was a good week for woolgrowers this week; particularly those east of Dubbo who were lucky enough to be under falls ranging from an inch to ten inches! The market didn’t open until Wednesday due to the long weekend, and it seemed like the wait bottled up their excitement as nearly all indicators saw an immediate 30-50 cent jump with a more subdued rise on Thursday. The offering of just under 40,000 bales was the smallest offering since October and Chinese interests were keen to gather stock on the back of recent promising economic news on their domestic front.

The offering generally is free of most faults, the long dry spell has most clips with little colour, cot or vegetable fault. The stand out performer this week was carding lambswool (30-50mm range). Some of these lots sold to extreme levels - several hundred cents above expectations. These lines are nearly always not measured for length and strength as they are below 50mm and yet yesterday they were making the same money as measured lines of 60mm.

Across the catalogue though, there were no potholes and we achieved a 100% clearance which included some old lots selling 100 cents above offers 7 months ago. In Sydney this week the average micron for merino fleece was 19.55 with an average value of 907 cents greasy or $1632 a bale.

Another pleasing aspect of this week’s market was the comparative lift in forward prices. As we have said for some time, growers need to think in advance about which levels they wish to sell at and place an order. Many of our clients did this over the past few weeks and were rewarded with trades on Wednesday and Thursday at levels for May/June full tote or above this weeks close.

Final arrangements are in full swing for next Saturday’s Open Day and Ram Sale (Feb 9). The following companies will be represented: Furneys CRT, Coopers Animal Health, Bayer, Virbac, Novartis, Waratah Fencing, Shearing Supplies, Metalcorp, Woolerina and AgConcepts. Ian Simpson from Rabobank will be attending with tongs and apron keen to show his form on the BBQ. Kick off time is 10am with lunch from 12 onwards. Come and join us!

January was a record month here in the wool store with over 4000 bales received and tested. Our usual peak, or months over 4000 bales are April to July. A few things can be attributed to the increase, those being a few new clients; the dry weather has seen no disruption to shearing; and as sheep prices are so low, many sale sheep are being shorn to at least get something from the wool. The January AWTA figures showed a national increase of 12% compared to last year and YTD an increase of around 4%. The next few months will be interesting.

Next week close to 52,000 bales will be offered with Macwool offering 1400 bales on Wednesday with several cracking clips!

                                                                        Ag Concepts Fwd Price Trades W/E 01 February

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

1138 cents é 39 cents compared with 24/01/2013                                           1.0411 ê 0.0129 compared with 24/01/2013

Northern Market Indicators (AUD cents/kg clean)

1158 cents é 29cents compared with 24/01/2013

WEEKLY MARKET REPORT

Week Ending 25^th January 2013

AWEX Northern Micron Indices Comparison

     FINALLY NEWCASTLE GOES

The market this week continued the trend which began last Thursday. The middle microns felt the pressure early on whilst fine wool and cardings held steady. Apparently the reason for this retreat of main China types, being 19.5-22 micron, was that a major topmaker in China dumped greasy wool into the domestic market to ease a cash flow problem at a discount of 30-40 cents to last week’s quotes. Added to this were a couple of major Australian traders (also in China) attempting to make sales slightly under the market. Co-incidentally, both those companies were major buyers this week.

Although there were small losses in most categories - especially fleece types - the promising aspect was that, after the close in Syd/Mel on Thursday, Fremantle posted good gains indicating a solid start to next week.

Our sale on Wednesday reflected the easing with the middle microns but overall it was a good sale with some very good results on certain types. The carding sector in particular stood out with some low vm lambs, crutchings and stains fetching very good prices and embarrassing the valuer. This was not restricted to the merino sector as XB lambs and oddments saw good competition. The major carding buyers being Michell (Australia), Reward (Taiwan), Techwool and Fox & Lillie (China and domestic), were all very active and going head to head.

The Room 1 catalogue was dominated by Viterra who seem to be back with a vengeance after a few months on the sideline as they purchased 31.8% of the national merino fleece offering. Added to this Dalgety Wool Exports (soon to be both under the same umbrella) ran second for the week purchasing 8.2% of fleece types. One suspects that with smaller offerings over the next few weeks they are building a stock position to sell into as the market rises after Chinese New Year, which is the tip we have been hearing.

On the local scene, the news this week that Newcastle will close as a selling centre was mostly met with joy as AWH announced that they were unable to secure showfloor space at a reasonable rate to hold the five sales. The fat lady hasn’t sung yet though as we haven’t seen an acknowledgement by the individual brokers that they are happy to walk away. But most buyers are cheering that Newcastle wool will be offered in Sydney and non Newcastle sellers like us will also offer in those weeks hence evening out the offering.

On a more local scene, here in Dubbo, we see that AWH (the warehouse agent for Landmark & Elders) have taken a lease on the Ex-Lanoc Wool premises. This move doesn’t really surprise me as I felt Bathurst was the wrong place to centralise western NSW wool. I guess it just took 12 months for the two parties to agree on the rent!

Next week a smaller national offering over two days of 43,000 with Macwool to offer 867 bales on Thursday. 

                                                           Ag Concepts Fwd Price Trades W/E 25 January

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

1009 cents ê  6 cents compared with 17/01/2013                                  1.0540 é 0.0026 compared with 17/01/2013

Northern Market Indicators (AUD cents/kg clean)

1129 cents ê 3 cents compared with 17/01/2013