WEEKLY MARKET REPORT

Week Ending 18^th January 2013

AWEX Northern Micron Indices Comparison

          REALITY CHECK

After last week’s good opening sale, some-what of a reality check would best describe this week’s outcome. Faced with the largest national offering for over 12 months (58,000 bales) and a currency still hovering at 105 cents, uncertainty as to where the market would go had all and sundry nervous about the sale. It is hard to recall last week’s scenario when all fleece indicators from 16.5 to 24s gained around the same values - 42 to 54 cents - a gap of just 12 cents. Normally finer indicators gain more than the medium wools; last week’s even gains looked too good to be true. This was exactly the case as the market split in 2 as finer wools built on their momentum from last week as 18 micron and finer added 20 to 30 cents. Medium types couldn’t sustain last sales good run and weakened from the opening bell. 19 to 21s gave up 20 to 30 cents while 18 and 22s were back 10 cents. The pass-in rate more than doubled to 8.3% as the fall in the medium types caught a few by surprise. The turn-around came late on Wednesday in Fremantle as their pass-in rate was 17%.

Room 2 lots fared better as an opening day increase was negated by a final day’s easing to see skirtings up by 10 to 20 cents. Cardings recorded good gains for the second sale in a row - the indicator adding another 25 cents to 729. All types and descriptions posted 15 to 30 cents as a few lots of low VM crutchings made well over 500 cents and locks selling for low to mid 400 cents. Crossbreds also ended the sale dearer as 28s and finer looking 10 cents higher as 30 microns were unchanged and the broader types (32s) off the pace by 5 cents.

Don’t forget our Wool Store open day and Last Chance Ram Sale is just 3 weeks away, Sat.9^th February. We are pleased to have as a keynote speaker Rob Langtry from AWI. Rob is the Chief Strategy and Marketing Officer for AWI. Rob has held this position for 6 years and oversees the implementation of business and marketing planning and strategy. Some of you may have heard Rob speak at the recent AWI grower meetings around the bush. He has extensive experience in Asia, Europe and the USA and is well worth listening to.

Just when the market looks like being on a roll, something seems to put a spanner in the works. Although the fundamentals haven’t changed, it looks nearly impossible for the market to go on a sustained run for more than a week or two, even three. According to show-floor talk, Viterra and Queensland Cotton need to buy wool, but have not necessarily sold their “stockpile” on to mills in China. This tactic could see the market stagger over the next few weeks then strengthen as we celebrate the Chinese New Year! Traditionally that period can be dicey to sell wool, but quantities will drop to mid 40,000s over the next few sales, hopefully kicking in the old supply and demand situation. We sell on Wednesday with a catalogue of 750 bales - a steady market might be the best outcome. Finally our thoughts are with all our clients up at Coonabarabran. Some have lost pasture, but to date, no stock losses or dwellings lost.       

                             Ag Concepts Fwd Price Trades W/E 18 January

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

1105 cents ê  6 cents compared with 03/01/2013                                       1.0514 ê 0.0032 compared with 10/01/2013

Northern Market Indicators (AUD cents/kg clean)

1132 cents ê 39 cents compared with 10/01/2013

WEEKLY MARKET REPORT

Week Ending 11^th  January, 2013

Northern Micron Indices Comparison: Source of information: AWEX

DOUBLE DIGIT RISES CLEAN SWEEP

It was a pleasure to be first seller this week in Sydney with the news that Melbourne had opened 30 dearer on Tuesday. This was not only maintained, but continued across all categories throughout the week. Most of the gains were on Wednesday but small gains were recorded on Thursday with the EMI ending at a seven month high. Interestingly, the 52,063 bales offered was the fifth largest offering of the season - up about three thousand bales on same sale last year. Only 3.8% was passed in nationally, although the West Australians still found a way to pass in over 7%. This has been a good week for the market for several years now, last year the EMI rose 27 cents, this year 39 cents.
One feature of this week’s sales was the return to the top of the list by Viterra. The company, mainly grain based, was recently sold to Glencore who immediately sold the wool interests to Agrium (owner of Landmark). This sale has been subject to review by the ACCC and is expected to be now near complete and able to proceed allowing Viterra to re-enter the sale room and take stock. What we are unsure about at this stage is whether the broking and buying entities of Viterra will be merged with Landmark/ Dalgety Trading or left as is. Apart from this we believe mills in China need to purchase and it is genuine demand that fuelled the rises. Our expectations are that this will continue for at least three weeks leading into Chinese New Year in early February. It is not expected that there will be any dramatic “correction”, rather consolidation as we move into autumn.
We traded our first forward contract in some time this week at full tote to the current market and expect more to follow. For those growers interested in hedging for the late autumn/winter and spring selling we would urge serious consideration be given to this over the coming weeks. Robert Herman, principal of AgConcepts, will be one of our key presenters at our Woolstore Open Day on February 9. This will be a good opportunity to learn more about forward selling your wool clip.
This week marked the first sale for us in the “new” sale rooms. These rooms, built a few years ago when Elders and Landmark decided to leave AWEX, have caused buyers concern with two rooms operating. In an effort by AWEX to bring all sellers back together they relinquished two old purpose-built tiered rooms to join AWH sellers in the non-tiered rooms. The beauty for us is that they are literally 10 paces from our offices in Yennora. We are told to expect soon a new 5 year lease for both showfloor and sale rooms which will be a relief. Next week we will offer 860 bales on Thursday with positive expectations.

WEEKLY MARKET REPORT

Week Ending 14^th December, 2012

Northern Micron Indices Comparison

MERRY CHRISTMAS!

The market for the final sale of the calendar year did what we thought - finished at around the previous week’s levels. The market was a touch cheaper, the EMI down 14 cents to 1072, due to a few factors conspiring against it. History tells us that after a big rise, such as last week, the next sale can be in a “correction” mode as was the case this week. Also buyers waded through the largest national catalogue since April (55,300 bales) with the exchange rate now seemingly stuck at 105 US cents. These factors weighed heavily on the market on the opening days in Sydney and Melbourne as the EMI shed 5 cents on each day. Thursday saw the Sydney and Fremantle markets firm up to give a positive signal for the recommencement of sales as Melbourne fell away even more. Nearly all indicators lost 10 to 20 cents except 17.5s down 25 and 19s just 1 cent off. We sold on Thursday and struggled to see how some indicators were lower. One grower in particular had fleece lots 20 to 40 cents clean better than the indicators. These lots averaged 1.96 vm, 20 micron, 39 nkt and, most importantly, a low mid-break of 18. Many other fleece lines looked 10 to 20 cents better than the indicators making us wonder where AWEX sources their quotes!

Skirtings also initially suffered from the “correction” of the previous sale as the 5% to 8% VM lots slipped 10 to 20 cents with the broader microns most affected. The better length and low VM, ) were rock solid and finer types (28 and down) were quoted 5 to 15 cheaper - not a bad result considering this sector was the biggest weekly offering for 5 years - 22% of the national catalogue.

The market did finish on a softer note, but the recovery since October to see the market at a 6 month high and show-floor talk has given us plenty of optimism for the second half of the season trending dearer despite a ridiculous exchange rate and Europe technically in recession. AWTA testing data shows a slight decrease in wool tested up till the end of November with total wool offered less by 2.5% (23,300) to date when compared to 12 months ago - something the buyers and mills are acutely aware of. China still dominates the market taking 70%, but 5% less than a year ago. India (8%) is just ahead of Italy (6.5%) with the Czech Republic next. Taiwan, the USA, Malaysia and the UK are all importing less, down between 20 to 40%. Big increases included Egypt, up a massive 586%, Spain up 100% and the powerhouse of 25 years ago, Japan, taking 38% more than 12 months ago. Greasy exports made up 87% while scoured and carbonised almost 7% each. Buying figures are not the same as 6 months ago as Viterra and QLD Cotton have dropped down the list. Techwool Trading is No1 (10%) with Lempriere, Fox & Lillie and Viterra all securing 7 to 8%, with the top 10 exporters  buying 66% of the clip. That just about wraps it up for the opening 6 months or the year. Don and all the staff wish all our clients a very merry Christmas and wet and happy New Year. Our next wool sale should be on Wednesday, 9th January. Till then, all the best to everyone. 

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

                Eastern 1072 cents down 14 cents compared with 06/12/12                           1.0552 up 0.0082 compared with 06/12/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1100 cents down 9  cents compared with 06/12/12

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

WEEKLY MARKET REPORT

Week Ending 30^th November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

SALE ROOM CHANGE – END OF AN ERA

The run home started off slowly, but ended with a wet sail. Coming back to Sydney from a Newcastle sale can present some problems with style adjustments. This was exactly the case as 18.5s and finer virtually lost the gains from the previous sale, slipping 15 to 20 cents. This first day fall coupled with a 52,000 bale national catalogue, made most pundits nervous as the exchange settled above 104 cents giving buyers plenty of ammunition to let the market slide. The only glimmer of hope the market may rebound was the way it finished in Fremantle on Wednesday night, with rises of 5 to 35 cents for most indicators. In fact 19 to 23 micron indicators finished ahead of their Eastern Seaboard counterparts, something of a rarity. Thursday’s market opened with a bang with all indicators recording double digit gains of 10 to 25 cents. We copped the benefit of this good recovery selling late on Thursday clearing all fleece lots on offer. By week’s end 18.5 and finer just kept their nose above water with gains of up to 10 cents as 19 and broader put on 10 to 20 cents as discounts shrunk to minimal amounts for faults like VM, colour, cott and tender.

Skirtings continued on their merry way despite buyers having plenty to pick from - this sale the largest weekly selection of Merino Skirtings since January (13.5% of the weekly offering). All types and descriptions attracted good support through till the final lots on Thursday. The sale opened with the burrier types (5 to 8%) adding 10 to 20 cents as low VM lots were quoted as fully firm. It was the reverse on the final day as the <4% VM pieces and bellies played catch-up putting on 20 cents as the C and D fault lots, 6 to 15 % VM, not adding to their overnight gains. Cardings posted a 5% gain as the MCI climbed 33 cents to 661 cents. Crutchings had the quietest sale, just 10 cents dearer while stains were 30 to 35 better and locks rocketed up to levels 50 cents higher when compared to the week before. The Crossbred catalogue was also the biggest since January (20%) but buyers weren’t spooked by the big volume as gain across all types looked to be in the 10 to 15 cent range as we cleared every lot in this sector.

The AWEX AGM was held this morning and a change of sale rooms for AWEX aligned brokers is in the wind. Currently 2 sets of rooms are in use, the ones we use, which have been in use for 40 years, and a 2nd sale room complex  located where the old canteen was, used by Landmark and Elders who are not members of AWEX. AWEX, under pressure from the owners, Stockland, have relinquished their lease on the original rooms and all brokers will sell in the one set of sale-rooms from January which, according to most buyers, are not as good as the older rooms. The end of an era, indeed. The AWI AGM was held last Friday with the full results of Woolpoll 2012 released. The recommended 2% wool tax was endorsed by 53% of the votes. 7% of votes were in favour of an increased tax to 2.5 or 3% with the big jump in a vote for 1%, 29% compared to 12% 3 years ago. The rise in this vote came mainly from WA after the WA Farmers Assn. instructed their member to vote 1%. We offer 750 bales next Wednesday - the market to be unchanged?

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

                Eastern 1034 cents é 15 cents compared with 22/11/12                                    1.0470 é 0.0080 compared with 22/11/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1056 cents é 13 cents compared with 22/11/12

WEEKLY MARKET REPORT

Week Ending 23^rd November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET SETTLES – NOW FOR THE RUN HOME!

The market did what we predicted, finishing the week in positive territory. A good opening day was followed by two days of the market barely maintained, but the first day’s increases were enough to push both the EMI and the NMI 6 cents higher to 1019 and 1043 respectively. Newcastle played host to its final sale of the year - their largest since September last year (14,000 bales). All indicators from 19.5 and finer rose 10 to 15 cents (bar 17 and 19s), these ending the sale just in sellers’ favour. The limited selection of medium and broader types was mixed as 20 to 21 microns faded up to 8 cents cheaper with 22 and 23s up to 5 cents dearer. The stylish offering of spinners and choice style wools from the New England sold to increased competition with two lots topping the market at 4,250 cents (both lots under 14 micron). Specialist super-fine buyer, New England Wool, bought 2000 bales to be second behind Qld Cotton.

The excellent catalogue of skirtings had buyers keen to secure the finer (<18 micron) low VM lots on offer through to the final day as most types added 20 to 35 cents and more for lots under 3% VM. Cardings had a solid week as all types finished the sale fully firm to sellers’ favour to leave the MCI unchanged at 628 cents. Just over 5% (800 bales) of the selection were crossbreds which were nearly unquotable but, for the record, remained unchanged.

Away from wool sales plenty has been happening in the wool and sheep game with the OJD re-zoning debate and results from Woolpoll 2012 released. The grower information meetings that AWI held around the bush in the lead up to voting looks to have paid off as this year’s voter participation was the highest since growers were given the option to vote on the level of tax. The vote in favour of retention of 2% tax came from 61% of the 42% of valid voting papers returned. The full breakup of voting for zero or 1% was not known, but would be released at today’s AWI AGM. The split of funding is to change from 50/50 to 60% allocated to marketing with 40% for research and development. It will also draw down on its reserves to the tune of $42m over the next two years for increased spending on marketing and on-farm R and D. The bun fight over the re-zoning of OJD boundaries has hit fever pitch after the forum in Sydney last week. As the front page of “The Land” reports, pending legal action against Sheepmeat Council of Australia and Woolproducers Australia, who are pushing for the new national management strategy, is a definite possibility lead by prominent Yass woolgrower Stan Waldren with overwhelming grower support. The proposed changes would limit growers ability to move and sell stock not only in NSW but interstate as well with  massive implications for Narromine to function as effectively as it has done in the past where sheep have been traded from QLD to VIC. If more clarification is needed, your stock agent may be able to provide you with the latest on the proposed new boundaries. Next week will see the largest catalogue since April, 55,000 bales, on offer with a solid market predicted. We’ll sell on Thursday.                               

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

                Eastern 1019 cents é 6 cents compared with 15/11/12                                  1.0390 é 0.0006 compared with 15/11/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1043 cents é 6 cents compared with 15/11/12

WEEKLY MARKET REPORT

Week Ending 16^th November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

LAST DAYS SURGE

A strange week by anyone’s reckoning as the market moved every possible direction as if on the giant roller-coaster at Movie World. By the end of the sale it would have been hard to work out just how and why the indicators finished where they did and, for ideas of which way the market will go in the run till Christmas, opinions at this stage are only a stab in the dark. Finer indicators under 18.5 fell 15 to 50 cents (some of these now giving up close to 100 cents in the past 2 weeks) making super-fine growers selling next week  nervous as they line up for the final Newcastle of the year. Middle micron types (19s) edged 5 to 15 cents higher as the medium to broader merino lots, 20 to 23s, jumped 35 to 45 cents, wiping out last week’s losses. It seems we have dodged 2 bullets in 2 sales. Last week’s market was solid when we sold first up on Wednesday, before it collapsed on Thursday and by the time we sold late on Wednesday this week the market was in recovery mode after a tough opening day in Melbourne on Tuesday. Last week’s sudden fall (according to one source) was that two prominent buying companies had successfully talked the market down as plenty of wool was hitting the market, both pre and post Christmas but offerings to date are 5 % (36,600 bales) behind the same week 12 months ago - this figure more than likely to grow than shrink.

Skirtings took their lead from the fleece room as big opening day losses of 35 to 45 cents saw the gap between low VM types and burrier lots tighten. Thursday’s recovery was not as pronounced as the fleece but did see a 10 to 20 cent rise for all types with most focus on 19 microns with 3 to 5% VM. Merino cardings just kept their head above water with the MCI adding 1 cent to 628. Locks opened the sale 10 cents off the pace but built momentum on Thursday closing the sale in buyers’ favour with crutchings 15 cents up and stains in sellers’ favour. Crossbreds had a stable week, except for the finer types as 26s looked 15 to 20 cents cheaper with all other indicators unchanged to buyers’ favour.

The countdown to Christmas is well and truly on with only 4 sales to go. As far as wool to be bought and shipped nothing has changed as talk of “wool to be bought” is still on the radar and Viterra, who sat out of the market for 3 weeks, should be back to full buying capacity next week. We may well see another spike in the market over the next few sales, hopefully sooner than later, especially for the superfine growers who have wool in next week’s Newcastle sale. AWI reports the results of Woolpoll, 2012, should be made public in the next week or so with the voting results released to the board today. AWI convened an invite only forum yesterday discussing the proposed re-zoning of the OJD protected areas. With changes to come into effect on January 1^st the page 18 article in yesterday’s The Land has a lot of water to flow under the bridge before this controversial decision is ratified and all parties are happy with the final outcome. Next week’s sale could be a precursor as to how the market will finish the year off, hopefully an upward trend.                  

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

                Eastern 1013 cents é 10 cents compared with 08/11/12                                1.0384 ê 0.0029 compared with 08/11/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1037 cents é 7 cents compared with 08/11/12

WEEKLY MARKET REPORT

Week Ending 9^th November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

INDIGESTION KICKS IN – BUT FOR HOW LONG?

A busy week no matter what angle you looked at it from. From a wool market that took a battering, to the US election, every hourly news bulletin seemed to have breaking news. What looked to be a mountain of money being splashed on the Cup and Oz Lotto with no one lining up to collect on the trifecta or first 4 or part of the $110M jackpot, no extra money could be found to keep the wool market from falling. Whether buyers were distracted by the gambling bug, the US elections or the non movement of interest rates it seems the rising $AUD and larger quantities were the telling blows for the market. The next three weeks has over 50,000 bales rostered for each sale, with next week’s catalogue (58,000) the largest since January. If these figures are correct, a total of 208,000 bales will be offered in November, the biggest volume in a 4 week period in 22 months. The market recorded heavy losses on both days to have the EMI give up 43 cents to sit at 1003 cents/kg. All fleece indicators lost 40 to 70 cents with 17 and finer and 21 micron and broader least affected (40 cents) while the middle micron indicators in the 17.5 to 20 micron ranges took the brunt of the falls losing 60 to 70 cents. Grower resistance to the falling market did kick in on the final day as the pass-in rate climbed to 28% - the highest in 3 years. We were fortunate enough to sell first on Wednesday and cleared 96% leaving us a bit perplexed by the big falls the market report was quoting that night. A closer look at our results shows high nkt low VM lots of fleece making from 15 cents above last week’s indicators to about 10 cents lower as the falling market built momentum as the sale progressed, after we sold, but there was a late rally in Sydney on Thursday giving hope for next week.

Skirtings opened the sale on a reasonable note but by Thursday had suffered losses not far behind their fleece counter-parts. Initially 19 micron and broader lost 10 cents but the final day of selling saw all types and descriptions at least 30 cents cheaper with burrier lots, over 10% VM, up to 50 cents back. Cardings bucked the falling trend as the MCI modestly added 2 cents to 627.  Locks gained 10 to 15 cents, crutchings 10 better and stains unchanged from last week. Crossbreds weren’t immune from the negative tone as a slight decrease on the opening day was doubled on Thursday. Indicators out to 30 micron lost 15 to 20 cents while 32s fell 30 cents.

A tough sale as the reality check we didn’t see coming hit with the force of Hurricane Sandy. With the exchange rate over 104 cents and plenty of wool on offer in the short term, the ride for the market could be a bumpy one for the final 5 sales before Christmas. Viterra is still not buying any fleece and may not be back in that sector of the market till late November, but have recommenced buying skirtings and crossbreds. According to one source, all the major buyers need to buy wool in the next 5 weeks giving hope that there will be some sort of recovery sooner rather than later.

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

                Eastern 1003 cents ê 43 cents compared with 01/11/12                                  1.0413 é 0.0039 compared with 01/11/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1030 cents ê 45 cents compared with 01/11/12

WEEKLY MARKET REPORT

Week Ending 2^nd November, 2012

Northern Micron Indices Comparison: Source of information: AWEX

A HICCUP BUT NO INDIGESTION

This week’s market finally took a breather as prices stalled under the weight of the largest national offering for the season so far (53,000 bales) - in fact the biggest since April 2011. In keeping with the big tallies Melbourne’s Thursday offering was the largest daily offering in 21 months (15,086 bales). October proved to be a good month for the wool market with the EMI climbing 108 cents for the month, making it the best performing month since January 2011. After a four week run of gains (adding up to a rise of 122 cents) since the end of September, everyone wondered when the market would run out of steam. Not that this week is a disaster - the EMI lost just 2 cents to 1046. A look at the last 8 sales has the indicator lifting 153 cents with small losses in sales 12 and 13 and this week combining for only a 20 cent fall, a positive move of 133 cents. The sale in Sydney actually posted a 1 cent gain on the opening day as subtle rises in the 18 and 19 micron ranges negated medium and superfine losses. The second day saw medium types lose 5 to 10 with finer microns in sellers’ favour. By the time the last lot was sold the only positive movers were the 17.5 to18.5 indicators, modestly gaining 5 to 10 cents. Most other indicators were in buyers’ favour up to 3 cents with 21s and 22 microns losing 10 cents.

Skirtings had a solid sale with no real change quoted. The market opened on a stable footing with 18 micron and finer a touch dearer as the broader burrier types quoted as fully firm. This trend continued on the final day except some 19 micron and finer lots under 4% VM irregular as buyers became more selective with their purchases. Cardings edged higher as crutchings remained solid all week with locks and stains adding 5 to 15 cents to lift the MCI by 6 cents to 625 cents. Crossbreds had an up and down week as the finer end, 25-26s, lost 5 to 20 cents as 28 to 32 microns barely moved up or down from their previous sales levels. This sector of the market now being above 20% of the offering.

Certainly nothing to panic about with this week’s “hiccup” according to most buyers on the show-floor. Grower resistance wasn’t evident as the national pass-in rate was under 7% with the only lots being passed in few and far between. The market now stands 14.5% (178 cents) behind the level 12 months ago with year on year offerings 50,000 bales lower - this stat definitely playing on the minds of buyers worried about quantity coming onto the market. The spike in the market really hasn’t drawn much wool out of in store storage (Sale 99). Maybe the next round of rises might draw a bit more onto the market. We open proceedings next Wednesday with 680 bales on offer, market unchanged??                  

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

                Eastern 1046 cents ê 2 cent compared with 25/10/12                                     1.0374 é 0.0010 compared with 25/10/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1075 cents ê 1 cent compared with 25/10/12

WEEKLY MARKET REPORT

Week Ending 26^th October, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET CONTINUES TO STRENGTHEN

Another good week as the market continued on its merry way. Solid Wooltrade sales early in the week pointed to a rising market that led to buyers chasing every available lot on offer at auction. All three centres recorded double digit rises on both selling days. The EMI posted a gain of 34 cents to 1048 extending the run of increases to 10 days and a 108 cent rise over that time. Since AWEX commenced market reporting in 1995 there have been only three other occasions when the EMI has had a longer running rising streak, the most recent was June 2011 gaining for 15 days straight. Finer types led the charge as their recovery will please fine-wool growers no end. Increases were in the order of 65 to 80 cents for 19 micron and finer with 19.5 and broader out to 23s lifted by 25 to 50 cents. Again, discounts were minimal as buyers fought hard to secure wool with 98% of fleece lots sold in Sydney.

Skirtings mirrored the fleece room’s movements with some types out-gunning their fleece counterparts. The odd super-fine lot (< 2%VM) looked up to 100 cents better than last week’s quotes. Most descriptions ended the sale 60 to 80 cents higher, including lots containing up to 6% with most emphasis on types under 3%. Burrier lots over 8% gained 30 to 50 cents with discounts for cot, colour and jowls shrinking to minimal levels as the volume of lots on offer has slowed to a trickle and blending these with superior types is much easier now than back in the winter when every second lot had these faults. Cardings took a breather as momentum stalled with just a 2 cent rise for the indicator to 619. Crutchings edged a little higher while stains remained unchanged. Locks had an up and down week as washing types (<2%VM) were in sellers’ favour and carbo locks (burry) lost 5 to 10 cents on the final day. Crossbreds also looked on from the sidelines as most descriptions finished just ahead of last week’s quotes despite quantities lifting to almost 20% of the offering as we move into the peak shearing period for crossbreds.

The good run for the market continued on unabated. Despite factors like a high exchange rate, economic difficulties in the northern hemisphere and an over-supply of yarn and tops in China, demand is outstripping supply. Next week will see a 50,000+ national catalogue, but according to all reports won’t hinder buyers from pushing the market higher. The trade shows held recently in China seems to have mills booking up orders and suddenly all are positive about the future. All this is happening without two of the biggest buyers operating to capacity. Viterra didn’t buy a bale this week and aren’t likely to next week as all components of their business are put on hold as a buy-out is negotiated with Agrium. Queensland Cotton have also been quiet over the past few weeks with Modiano, Chinatex and Lempriere joining Techwool at the top of the buying lists. Don’t forget to vote in Woolpoll 2012 as voting closes in 1 week.       

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

                Eastern 1048 cents é 34 cents compared with 18/10/12                                 1.0364 ê 0.0032 compared with 18/10/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1076 cents é 43 cents compared with 18/10/12