WEEKLY MARKET REPORT

Week Ending 4^th May, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET DEARER AND BUILDING MOMENTUM??

Our hope for a solid market rang true as most indicators edged higher as the sale progressed. After falling progressively since mid-March the market has taken somewhat of a breather over the past two weeks, basically flat-lining at around 1160 cents. The opening day saw increases in all merino fleece categories - some by as much as 20 cents in Melbourne and Fremantle. The market in Sydney wasn’t as aggressive with all indicators up to 9 cents dearer. Despite this subtle upward trend, a fall in the broad crossbred indicators and the merino cardings of up to 9 cents negated any movement of the Sydney indicator, stuck on 1194 cents. Again, like last week, this illustrates the influence crossbreds and cardings have on the direction of the indicator. The concluding day saw good increases for most merino categories, except 18 to 19.5 losing up to 5 cents in Sydney. In a worrying sign for next week, Fremantle did taper off with 18.5 to 19.5 micron dropping 10 to 15 cents, but this was due to one of the main buyers pulling out after filling up on quantity early in the sale. By the end of the sale 17.5 and finer and 21 to 23s added 10 to 20 cents with 18 to 20 micron recording single digit rises. Most fleece types benefitted from renewed competition with emphasis on the low mid-break FNF lots. Price difference between FNF or up to 1.5% VM and 2 to 3% VM in most fleece lots can be as much as 20 to 30 cents. The heavier VM lines over 3% are attracting a discount of up to 100 cents clean from an FNF type as are lines with colour and cott.

Skirtings had a solid if not spectacular sale. Most descriptions opened on a firm note with emphasis on lots <5% VM. This remained the status quo till the end of the week with some heavier VM types on Thursday irregular depending on the amount of colour, cott and jowl in them. Once again we stress the importance of removing these faults from your BKN lines. Cardings had another tough week losing value as the sale progressed. Locks opened the sale dearer, but lost ground on the second day to finish the sale 5 cents cheaper. Stains and crutchings lost ground on both days to lose 30 cents for the week. Crossbreds had a mixed week as the opening day’s falls were offset by good rises on the second day to have crossbreds up to 5 cents dearer.

This week marks 1 year since our opening sale for Macwool. Since then we have sold 37,800 bales, grossing $43 million, a great effort, all things considered. The loyalty from clients has been far beyond our hopes and expectations, thanks again! Next week Macwool sells early on Wednesday in the smallest national catalogue of the season, just 35,700 bales.                                               

Ag Concepts

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

                Eastern 1170 cents é 5 cents compared with 26/04/12                        1.0308 ê 0.0074 compared with 26/04/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1195 cents é 1 cents compared with 26/04/12

WEEKLY MARKET REPORT

Week Ending 27^th April, 2012

Northern Micron Indices Comparison: Source of information: AWEX

SOLID MARKET – LEST WE FORGET

Very little happened in the wool market this week as sales were conducted over Tuesday and Thursday as the nation paused to remember our diggers on ANZAC Day. The market looked to have bottomed out towards the end of last week and that’s where it stayed. The AWEX EMI was unmoved as a 1 cent rise on Tuesday was negated by a 1 cent drop on Thursday to leave it at 1165 cents. The Sydney market was static with the indicator remaining unchanged over the two selling days. A closer look at the indicators reveals all bar 17.5 (-1 cent) lifting by up to 8 cents. The MCI (cardings) must weigh heavily on the movement of the indicator as it fell 19 cents for the week, thus negating any lift in the indicator. The formula in Melbourne must be the same as in Sydney as their indicator could manage a rise of just 1 cent, after a 3 cent rise was followed by a 2 cent fall. Again a close examination of their individual indicators sees all micron indicators out to 24 rising by up to 9 cents except 19 to 19.5 (losing just 1 cent). Broad merino indicators (25 to 26s) mustn’t play any part in regional indicator movements as these were 25 cents higher in Melbourne but unable to have any bearing on the indicator, whereas a 14 cent fall in their MCI looks to have, like in Sydney, put the brakes on any indicator rise. Buyers chased the better style and FNF types with some up to 10 to 15 cents higher and lots over 2%vm and containing cott and colour off the pace by around 10 cents.

Skirtings had an irregular week as the better style and light VM lots (< 3 % VM) attracted the most competition and finished the sale in sellers’ favour. As has been the pattern for several weeks, lots with heavy colour and cott continue to be almost unwanted as discounts grow and grow. The volume of these types looks to have settled and hopefully can be blended with the lots with little cott or jowl. It is still crucial that the cott and jowl still be removed from the BKN as best you can as price difference can be up to 50%. As reported earlier, cardings fell by an average of 16 cents on the Eastern Seaboard. Locks were the hardest hit, peeling 40 cents off last week’s quotes as stains drifted 10 to 20 cents and crutchings remained unchanged. Crossbreds improved as the week progressed to finish 5 to 10 cents higher.

A week of consolidation would best describe this sale’s outcome. With reduced national quantities over the next 3 weeks (41,500 bale average) and a somewhat keener mood from a few traders we may well have reached the bottom of this price cycle. This week’s 38,000 bale catalogue was the fourth smallest for the season and the smallest by number of lots. Whether the market can sustain a run like this time last year is anyone’s guess - only time will tell. Mac Wool offers 1050 bales last next Thursday and with a few lots sold on Wooltrade, augers well for a solid market next week. 

WEEKLY MARKET REPORT

Week Ending 20^th April, 2012

Northern Micron Indices Comparison: Source of information: AWEX

STILL FALLING BUT AT THE BOTTOM??

The build-up of wool due to last week’s Easter recess and the on-going sour sentiment led to big falls at this sale’s resumption. This week’s national offering of 55,000 bales, the second largest since mid January, and the fourth biggest this season, seemed too much to handle for the trade as talk of a fall was rife on the show-floor well before a lot was offered. This sale is the fourth in a row that has the market retreating with losses totaling 74 cents for the EMI. Losses were across the board as 18.5 and finer attracted the greatest falls (from 40 to 70 cents), while the medium to broad types gave up 25 to 30 cents from the pre-Easter close. It seemed no type or micron was immune from falling as discounts came to the fore for high VM, cott and colour and even the odd lot attracting token bids. The odd indicator in Melbourne, 19.5 and 23s did buck the negative trend finishing in sellers’ favour, this being the only bit of good news from the fleece sector as most of their indicators lost 10 to 35 cents with 16.5 to17s back by 60 cents - their largest decline since December.

Skirtings mirrored the movements of the fleece sector as sharp falls early in the sale did abate some-what as the week progressed. A 50 to 60 cent reduction with emphasis on 6 to 8 % VM was the order of the opening day with yet again cotty, colour and lots with jowl attracting heavy discounts and token bids. Thursday saw low VM types (<4%) remain unchanged as the burrier lots lost another 20 cents. Some of these types looked about 100 cents cheaper than before Easter resulting in a pass-in rate of 27% for the skirtings nationally, the highest in 31/2 years. Merino Cardings lost some ground as the MCI fell 10 cents to 733 cents. Locks lost 15 to 25 cents while stains fell 10 cents with crutchings unchanged for the week. Crossbreds had a reasonable week as minor movements each way of up to 5 cents left most types unchanged, this sector made up only 14% of the national catalogue, down from totals averaging in the low to mid 20% ranges earlier in the year.

Just a note about a field day to be held next week at Leadville. As the attachment reads, a demonstration on EIDs will be held. Andrew Mill’s phone no. is on the flyer to register if attending. Finally, in “The Land” an article about the woolstore opening and fashion parade. Plenty of good photos, obviously taken before the disco cranked up! We are still getting Thank You notes from clients who enjoyed the night. National offerings are reduced dramatically for the next three weeks to average around 43,000 bales. Whether this is enough incentive to lure buyers back into the market, who knows?  Yesterday’s slightly dearer markets in Sydney and Fremantle may give hope to a solid market with a “little bit of business” done overnight according to a few buyers, but plenty of enquiry 20 to 30 cents lower than the market. Macwool sells on Tuesday, offering 616 bales.      

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

                Eastern 1165 cents ê 26cents compared with 06/04/12                            1.0358 é 0.0075 compared with 06/04/12

            Northern Market Indicators (AUD cents/kg clean)

                Northern 1194 cents ê 34cents compared with 06/04/12

WEEKLY MARKET REPORT

Week Ending 6^th April, 2012

Northern Micron Indices Comparison: Source of information: AWEX

NO EASTER BUNNY THIS WEEK!

It wasn’t the week we were looking for just prior to the Easter recess. A larger than usual offering of around 50,000 bales saw another week of falls for most categories, particularly in Melbourne. Due to the short week sale quantities were squeezed into two days selling and the second day in Melbourne saw the largest daily merino offering of the season which weighed heavily on the market.

Most merino categories saw double digit falls for the second week running and fine wools compared to this time last year are now up to 33% less and showing no signs of rebounding. The effects of the wet weather are being felt in the Sydney offering as many lines are containing banded colour and green, whilst many skirting lines have jowly, cotted edges which are receiving significant discounts. The better prepared clips, on the other hand, have been well supported and saw little downward movement for the week. It was particularly noticeable with skirtings where classers took the time to remove the heavily coloured, cotted edges, those lines probably ended the week dearer.

Crossbreds did little over the week, although the better lines in Sydney on the final day were perhaps a touch better. Cardings also saw reasonable competition with some re-offered lines containing noogoora burr selling for up to 150 cents above prices offered six weeks ago. Although fine wools are very flat, by comparison lambs wool of both merino and crossbred have been selling quite well.

We are led to believe from our Chinese sources that the stocks held at mills in China are low, particularly for 20 micron and coarser. The expected larger offerings in the first two weeks after Easter has probably caused a few to sit on the fence this week, and we believe come mid May offerings will be back around 40,000 per week or less. This will certainly underpin the market for these types, the fine wools we are not so sure about.

Sales recommence on the April 17 in all three centres with close to 60,000 bales to be offered.

This week we are listing some forward price trades for the week through Ag Concepts who we are now using. Ag Concepts will be familiar to many grain growers, but are new to wool. They are linking brokers with buyers for forward prices similar to the SFE contracts we were using, but without the SFE, as it has become dormant for wool since Man Financial fell over.

We hope our readers have a happy Easter and we will catch up on the 20^th April.

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

                Eastern 1191 cents ê 21cents compared with 29/03/12                           1.0283 ê 0.0079 compared with 29/03/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1228 cents ê 18cents compared with 29/03/12

WEEKLY MARKET REPORT

Week Ending 30^th March, 2012

Northern Micron Indices Comparison: Source of information: AWEX

OH WHAT A NIGHT!

The official opening of the wool store attended by 430 growers was a night to remember. The crowd was entertained with a full evening from bag-pipes by John Johnston from Bugaldie to the fashion parade, some speeches and the charity auction. Everyone had a great night and caught up with old friends and some even had time for a dance!

The one comment that all had to say was how big the shed is, even the AWI agents from all parts of the globe were astounded at the size of the shed which was skyped to us on the big screen thanks to modern day technology! For many the highlight was the fashion parade with three professional models and nine local girls (many from St. Johns College) doing a great job of modeling the latest fashion from evening to sports wear. John Elliott, prominent woolgrower from Wilcannia and long term client, spoke on behalf of clients and recited a poem which drew roars of laughter. Wal Merriman officially opened the wool store and to cap a great night off, the charity auction raised over $4600 for RFDS and Redkite.

A lot of time and effort went into holding a night like this and many heart-felt thanks go to the following: AWI CEO Stuart McCullough, Chairman Wal Merriman and the staff of AWI who did so much with the fashion parade. Brigid MacLaughlin for her designs and professional input, Adors Hire, and Chris and Jeanagh Condon from the South Dubbo Tavern for supplying the drinks and donating two  items for the auction ( Harley Davidson leather jacket and a bottle of Penfolds Grange Hermitage)

For those wishing to see photos of the evening go to www.gplus.to/macwool. These shots can be downloaded free of charge if you see one you would like for a keepsake.  

The hopes of a good market after the solid Fremantle sale last Thursday didn’t quite pan out as we had liked. Falls over the two selling days saw the EMI shed 12 cents to sit at 1212c/kg. The finer sector of the indicators suffered the biggest losses as 19 down to 17.5 micron gave up 25 to 45 cents for the week. 17 and 19.5 averaged a fall of 15 cents while the middle micron ranges of 20 and 21 moved the odd cent each way. Broader wools in the 22 and 23 micron lost 10 cents. For the third week running national volumes were in the low 40,000s and the exchange rate happy to settle under 1.05 US cents, in fact dropping to under 1.04. Unfortunately, these factors have not helped the market as falls of 27 cents (2.2%) over the past two weeks have left most people wondering just when the next “bounce” will occur. Reports from China say the “pipe-line” has no wool in it and most mills are running hand–to-mouth, buying just enough to keep machinery running with no thought of buying stock. These three factors should lead to buyers looking to secure volume, but as yet they haven’t pushed the button. When they do is anyone’s guess.

The Room 2 wools seemed to fare much better as an initial drop of 10 to 20 cents for 19 and coarser with 5 to 8%VM was reversed with 18.5 and finer with similar VM finishing the sale 20 cents higher after a solid opening. Cardings gave up some of last week’s good gains as the opening day’s solid market waivered on the final day as locks and stains fell 20 to 25 cents, whilst crutchings finished the sale fully firm. Crossbreds had a solid, if not spectacular, sale as most types and descriptions were tending sellers’ favour. Hopefully Fremantle’s 3 cent rise yesterday will keep going next week.

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

                Eastern 1212 cents ê 12cents compared with 22/03/12                       1.0362 ê 0.0032 compared with 22/03/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1246 cents ê 12cents compared with 22/03/12

WEEKLY MARKET REPORT

Week Ending 23^rd March, 2012

Northern Micron Indices Comparison: Source of information: AWEX

IT’S PARTY TIME!!

Our hopes of the market’s upward trend of the past three weeks continuing ended this week as the sale progressively got worse as the week wore on. The bubble seems to have burst somewhat for the middle microns as 21s got to 1400 cents last week and that price barely lasted a day. The wobbles that Fremantle had late on Thursday certainly proved spot on as to how the market would perform this week. The opening day’s National Wool Market Report shows the market getting weaker as the three centres sold. Sydney, in fact, fared the best as most indicators recorded only single figure falls with 20 and 21 microns losing 10 to 20 cents. Most of the falls in Melbourne were between 10 and 25 cents. The bad news spread quickly across the Nullabor as the losses in Fremantle were in the order of 15 to 40 cents resulting in a national pass-in rate of 14%. Thursday wasn’t shaping up any better as attempts to negotiate on our few passed in lots (7) were unsuccessful on some as a reduction in buyers’ limits was all the talk. The Sydney market took the brunt of the falls as 18.5 and coarser gave up 15 to 30 cents with 18 and finer 5 to 15 cents down with some of the “funny” finer lots up to 100 cents cheaper. Melbourne’s losses were in the order of 10 to 25 cents. By the time Fremantle opened sentiment had changed slightly with some indicators actually in sellers’ favour, enough to lift their WMI by 1 cent. The only indicator to fall was 22s, losing 14 cents. Hopefully this is a good lead into next week.

The often resilient skirtings did just that and all but defied the heavy losses in the fleece room. After all descriptions started on a solid footing, 19 to 20 micron B and C fault (3 to 6%) skirtings ended the day 10 to 15 cents better. Thursday’s very small offering held its ground, but buyers are still wary of lots containing heavy cott and jowl. These continue to attract big discounts and should be kept in a separate line as prices for pieces and bellies can nearly be halved if found in these lots. Cardings looked to be the stand-out performer for the week as the MCI added 34 cents to sit at 756 cents. The breakup saw locks surge 40 cents, stains added 30 cents while crutchings were 20 cents up. In what capped off a good week for room 2 wools, crossbreds of all types and descriptions gained 5 to 15 cents across the board.

The roller-coaster ride that the wool market has been on since Christmas continued on its merry way this week. The three rises have been quickly followed by three falls, but the corrections have been less than the rises on each occasion. The market has moved in a 60 cent range between 1190 and 1250 over the last 10 weeks and sits at 1224 today. National volumes of low 40,000s and an exchange rate that fell to under 104 US cents didn’t help the market this week but, as we have said previously, what happens in Fremantle on Thursday can dictate the next week’s price direction. Let’s hope it does! We open proceedings first up next Wednesday with 700 bales on offer. Plans are well in hand for our official opening tomorrow night, commencing at 7.00pm sharp. The cat-walk is in place and the cool-room is switched on! A crowd of 440 should be in for a great night with a few surprises in store for one and all. A correction to last weeks report - this is the biggest gathering of wool growers not just in Dubbo but Australia since the board of AWRAP was infamously sacked in Goulburn in 1998 for mismanaging the disposal of the stock-pile. See you tomorrow night and don’t forget your dancing shoes!         

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

                Eastern 1224 cents ê 15cents compared with 15/03/12                       1.0394 ê 0.0071 compared with 15/03/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1258 cents ê 12cents compared with 15/03/12

WEEKLY MARKET REPORT

Week Ending 16th March, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET RISES BUT WILL IT CONTINUE?

The market held its breath as talk of a rise came to fruition on the back of reduced quantities on the Eastern seaboard and the exchange rate dropping as news of good economic recovery and jobs growth in the US strengthens their currency against all other major trading partners. The smaller volumes that are on offer may benefit growers that plan to sell their clips over the next three weeks as receivals into brokers’ stores are still sluggish - especially in the south of the state and wool coming out of the far west and north. With only 41,000 bales up for grabs pressure was always going to be on the buyers to secure what they needed to buy. The market opened strongly as all microns and types were pressured with vigor as 17.5 and finer added 10 to 15 cents with all other indicators jumping 25 to 35 cents. A big clearance saw only 5% passed in across the three selling centres. The final day’s sale wasn’t as frantic as medium lots were up to 10 cents dearer with 17.5 and finer leading the way with increases of 25 to 30 cents. The market did slip away in Fremantle with losses of up to 20 cents for 18 to 18.5s. As we have said in the past, how the market finishes in the West could determine how the market will open the following week.

Skirtings took the lead of the fleece room as healthy rises saw all types and VM levels chased to the last lot on Thursday, with the only exception being lots with heavy cott and jowl. Middle micron (18 to 20) B and C fault types opened with a 20 cent rise as some heavier VM lots added 30 cents. This pattern of buying filtered through to the second day as the trade added another 10 to 20 cents to the previous day’s quotes for identical types. As we commented earlier, more and more cott and jowl are appearing in pieces lines. The discounts for these faults are big and will only increase as the volume of these faults grow as the “big wet” dissipates and the long grass dries out and sheep pick up more VM. It will become more and more important to remove cott and jowls from the pieces lots as a 50% price discount is in place for lots with a bit of colour and lots with colour, cott and heavy jowl. Cardings took a breather as the MCI was the only indicator to record a negative shift losing 9 cents to 722 cents. Progressive falls on both days for locks to the tune of 20 to 30 cents led to this fall. The other sectors of the carding group, stains and crutchings, were solid to 10 cents higher. Crossbreds continued their good run of the past month or so with 26 to 30 micron pushing ahead 15 to 20 cents as the broader types added 5 cents to last week’s quotes.

Planning is well under way for our official shed opening next Saturday night, 24^th March. It promises to be a huge night as numbers look to be around 400, the largest gathering of wool growers in Dubbo for over 10 years. Apart from the guest speakers and fashion parade a small charity auction will be held where a garment from the parade will be auctioned. Due to the large number of guests attending, a free courtesy bus will be doing a run back into town from about 10.30/11.00pm for those wishing to enjoy them-selves more than the allowable legal driving limit! The taxi ride out is around $15 to $20. It should be a very entertaining evening and, of course, will go ahead no matter what Mother Nature throws up on the night! The national catalogue drops to an average of 42,000 bales over the next three weeks to Easter so we can only hope pressure will be on exporters to secure wool and the soft ending to Fremantle won’t be a precursor to next week as we offer 750 bales late on Wedenesday.   

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

                Eastern 1239 cents é 23cents compared with 08/03/12                           1.0465 ê 0.0129 compared with 08/03/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1270 cents ê 25cents compared with 08/03/12

WEEKLY MARKET REPORT

Week Ending 9th March, 2012

Northern Micron Indices Comparison: Source of information: AWEX

MARKET OKAY BUT POISED FOR A RISE?

The first 3 day sale since August started poorly. As is the case after nearly all Newcastle sales, there was a “style adjustment” between the superior New England style wools and the Sydney wools. This adjustment amounted to a 20 to 30 cent fall for 18.5 and finer with the 19 micron and broader indicators bucking the trend of the fine wools by adding 5 to 15 cents. Wednesday saw a mixed market as 18 to 19 micron were in sellers’ favour with 20 to 21s in buyers’ favour and 23 micron giving up 20 cents. The progressive fall in the exchange rate could have influenced a revival in exporter interest as the final day saw prices lift 10 to 25 cents for 18 to 21 microns. The markets was split in two by week’s end as 18.5 and finer were quoted 15 to 25 cents lower and 19 to 21 microns 15 to 30 cents better than the previous week. The highlight of the sale was one of our lots achieving the second highest price nationally. Michael Patterson of Grattai via Mudgee took this honor with a price of 1679 cents for a 1 bale line of SUP AA M (15.5-1.0-76.5/70mm-41nkt). G SCHEINDER AUSTRALIA secured this lot for spinning and weaving in Biella, Italy for women’s suiting in the USA. This week’s top price went to a 15 micron lot sold in Melbourne for 1710 cents.

Skirtings also suffered from a style adjustment early in the week as all descriptions fell by 20 cents with low VM types most affected in the predominately 19.5 and finer offering. Buyers then pulled back their limits by 5 to 10 cents on burrier types over 5% VM on Wednesday with lots carrying cott and colour attracting bigger discounts. Thursday saw the third smallest skirting selection of the season but this lack of quantity didn’t help low VM lots, finishing irregular and all others unchanged. Cardings opened the sale with a bang as the MCI added 12 cents to sit at 738 cents after locks and stains gained 15 to 20 cents with crutchings in sellers’ favour. Stains couldn’t maintain their levels of the previous day with 20 micron and coarser giving up that advantage on Wednesday as locks and crutchings were unchanged through to the final lot on Thursday. The second largest Crossbred offering for the season (nearly 25%) saw minimal movements as 28 and 30 microns ended the week in buyers’ favour.        

Preparations are well under way for our inaugural wool-store dinner to be held March 24. The night will be highlighted by speeches by AWI CEO, Stuart McCullough, and the official opening of the new store by AWI Chairman Wal Merriman. But it could be the Fashion Parade that steals the show with a collection of the latest from New York fashion week, a showcasing of the latest in the sporting and outdoor line and a special segment from former Nyngan girl Brigid McLaughlin with her own designs. RSVPs are due in Monday and, with over 200 responses in so far, a big night is in store! The next four weeks will see a drop off in national offerings to low 40,000s due to flooding preventing movement of wool into broker’s stores. This may be a good opportunity to offer wool if you are holding any as buyers may come under pressure to secure volume as smaller quantities could see the market rise as the anticipated increase in competition on less volume leads to higher prices. Macwool will offer 868 bales second up on Thursday as shearings and contractors play catch up under blue skies!

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1216 cents é 3cents compared with 01/03/12                          1.0594 ê 0.0149 compared with 01/03/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1245 cents ê 1cent compared with 01/03/12

WEEKLY MARKET REPORT

Week Ending 2^nd March, 2012

Northern Micron Indices Comparison: Source of information: AWEX

NEWCASTLE SURVIVES, BUT ONLY JUST

The fears we held for Newcastle appeared to be on track as the market opened softer on Tuesday. Even with the fall of the EMI of 7 cents, brokers selling on the opening day were prepared for the fall as they looked to adjust their valuations correctly as only 6% was passed in.  Movements were minimal as fine microns under 18.5 suffered 10 cent losses while 19s and broader fell 10 to 20 cents with a lack of quantity leading to limited orders the reason for this fall. The superior selection on Wednesday brought buyers out of the wood- work as the increased competition saw an increase of 20 to 35 cents for 17.5 and finer and 10 to 15 cent rises for indicators out to 20 microns. Oddly enough the pass in rate was almost 14%! Melbourne and Fremantle enjoyed good rises with most indicators adding 20 to 30 cents. Newcastle’s final day selling for the season saw a little “style adjustment’ with 17 and 17.5s back 13 cents and 18 and broader up to 10 cents better. In what might be a good lead into next week, Melbourne saw gains of 10 to 20 cents across the board. By week’s end rises were small - up to 5 cents for 19 and coarser and 10 to 15 for 18.5 and finer. Despite these modest rises, the AWEX Northern Indicator fell by 1 cent, an odd movement with all indicators in the positive. Best top-making style and better fleece lots may not be included in the make-up of indicator directions!

Skirtings had an up and down week literally as a solid opening led to a cheaper close as the selection waned towards the end of the sale. Tuesday saw a solid start and, as with the fleece room, Wednesday’s superior offering led to keener competition, pushing low VM lots, under 4%, 10 to 20 cents higher. The less than attractive last day’s selection saw the market taper by 10 to 30 cents. Cardings followed the same pattern as the two other sectors of the merino offering. Locks opened 10 cents or better as crutchings and stains remained solid until the final day as heavier carbonising types of locks lost 10 to 15 cents. The small amount of Crossbreds fell 10 to 15 cents in the 28 to 30 micron range with all other types unchanged under some-what subdued bidding.

This week’s sale brings to an end Newcastle’s selling as a stand alone centre for this season. Over the four sales conducted there since mid September, none have had the Northern Region Indicator lift in value. The last two sales (including this week) saw 1 cent falls with the September and October sales losing 19 and 10 cents respectively. These bad results add fuel to the fire for those in the industry gunning for Newcastle to cease as a selling centre. No such luck yet as next season Newcastle is scheduled to have 5 sales, 4 prior to Christmas and the February sale in the corresponding week next year.  As the above table illustrates, sub 19 micron are lower than this time a year ago, with 18s and finer a massive margin behind. This is reflected in prices as the top price in Newcastle was 2,690 cents for a 14.0 micron weaner lot. Next week will see a catalogue of  16,000 bales in Sydney with Macwool offering 1060 bales first up on Wednesday.         

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1213 cents é 6cents compared with 23/02/12                         1.0743 é 0.0101 compared with 23/02/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1246 cents ê 1cent compared with 23/02/12

WEEKLY MARKET REPORT

Week Ending 24^th February, 2012

Northern Micron Indices Comparison: Source of information: AWEX

FINE WOOL UNDER PRESSURE – LOOK OUT NEWCASTLE!

The shaky end to last week’s sale was just a precursor to this sale as prices tumbled at a rapid rate from ‘go to whoa’. It was a case of dèja vu when compared to the opening two weeks of the year, when a good opening sale was followed by losses of equal amounts. This time, after a good rise two weeks ago, buyers were uncertain as to where to send the market last week.  No such uncertainty this week as the negative tone was loud and clear from the opening bell. Heavy falls early in the week steadied as the sale progressed with the EMI halving its losses as the week unfolded. The EMI gave up 37 cents to sit at 1222. In US c/kg the fall equated to a 44 cent reduction to 1284 cents. This week’s fall was the largest in five months and the national pass in rate of 22% was the biggest in nearly two years. Even New Zealand Merino passed in more than Fremantle, 41% compared to 30%!  Losses were across the board in the fleece sector as finer microns (16.5) dropped almost 100 cents with 17 and 17.5 back 60 to 75 cents. All other indicators lost 45 to 55 cents bar 20s which slipped 30 cents. As is the case when a fall occurs, discounts were back in vogue for tender, colour and cotty lots. The table above illustrates the good position of medium wool and the big fall in fine wool prices compared to last year.

Skirtings fared far better than their fleece counter-parts. On the whole, prices remained steady with buyers picking the eyes out of lots with colour and cott with some being discounted and others making well above estimation. Cardings also defied the negative tone of Room 1 as the MCI moved ahead by 12 cents to 726 cents. All types and descriptions advanced by 10 to 30 cents.  Even with cardings gaining ground buyers are reluctant to purchase any lots with Noogoora Burr. Unlike Bathurst Burr, Noogs do not break up in the scouring process and discounting is heavy when compared to similar types without Noogs. Most of these lots, regardless of micron or VM, range in price from 100 to 200 cents, a reduction of 100 to 200 cents to other lots. It is important to try to keep Noogoora infestation separate from other VM types if possible, especially in fleece lots, separation in skirtings and, of course, cardings is more difficult, but with such large discounts the effort to segregate Noogs could be well worth it. Crossbreds took a breather from their bullish run of the last fortnight. Fine lots, from 28 to 30 micron, moved just a few cents either way with 32 microns 8 cents easier.

Next week’s focus shifts to Newcastle as they host their final sale of the season with 12,500 bales on offer. Up until this week the prospect of reasonable prices looked good as increases in the fine and super-fine sector had been building over the past few sales. New England wool growers will certainly be nervous about the prospect of a good outcome next week. The selection is best top-makers and better predominately finer than 18.5 micron but, as one buyer reported, “business is dead”. Let’s hope business comes to “life” next week, otherwise pass-in rates could rival this week’s heights.

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1207 cents ê 37cents compared with 16/02/12                       1.0642 ê 0.0033 compared with 16/02/12

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1247 cents ê 33cents compared with16/02/12