WEEKLY MARKET REPORT

Week Ending 18^th November, 2011

Northern Micron Indices Comparison: Source of information: AWEX

NEWCASTLE UNDER PRESSURE

The wool market again suffered from a nervous Northern Hemisphere mood, wracked with worry over the sovereign debt crisis in Europe and the ability to repay without triggering another global recession. With the implementation of new measures in Italy to repay debt, following the appointment of a new Prime Minister, the true extent of their debt came to light. The debt is in the order of 2 Trillion Euro - doubling most previous estimates. This amounts to more than Greece, Spain, Portugal and Ireland combined! With this cloud of uncertainty around, the market recorded double digit falls on both days in all three selling centres. The 2.4% fall in the EMI equated to a drop of 29 cents to see it under 1200 cents again and 38 cents under its most recent peak in early November. Fine microns took the brunt of the falls with 18.5 and finer giving up 50 to 90 cents. The medium and broad types were not as adversely affected falling 25 to 35 cents in the 19 to 23 micron ranges with the broadest types just 10 cents down. Even with the falling market some good results were obtained. One 19 micron lot with 1.7 VM and 27nkt made 1462 cents clean with the indicator at 1438. An FNF, 17.1 and 47nkt line made 1700 cents clean with the indicator at 1681. Some of the burry and tender lots were more keenly sought after than their sounder FNF counter-parts as some orders with 1.5 VM minimum are struggling to be filled with large volumes of FNF types coming through the auction system.

Skirtings were unable to sustain their good run of rises over the past month. The opening day just held their ground with 20 microns easing 20 cents. Most falls occurred on Thursday as 19 micron and finer (under 5% VM) slipped 20 to 30 cents with the broader and burrier lots holding their ground. Cardings bucked the negative trend with all types and descriptions in sellers’ favour to lift the MCI by 2 cents to 727. Crossbreds again suffered under the weight of volume as 28s and finer lost up to 10 cents with the 30 micron and broader categories 15 to 20 cents lower.

Even with European debt worries, talk of a recovery in the market is common on the show-floor. Whether this happens pre or post Christmas is hard to pick, but some are talking a rise of some sort either side of the New Year. Newcastle will hold its final sale of the year next week with any sort of price rise for the finer types a long shot. This sector of the market has taken the biggest hit over the last 3 months and any substantial rise would be most welcome. But even with a softer exchange rate most woolgrowers will drive back up the New England Highway disappointed with their prices. 

                                                                   Agrisk FDIC Indicative Quotes 11/11/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1190 cents (ê29) compared with 11/11/11                                   1.0110 ê 0.0030 compared with 11/11/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1232 cents (ê29) compared with 11/11/11

WEEKLY MARKET REPORT

Week Ending 11^th November, 2011

Northern Micron Indices Comparison: Source of information: AWEX

MARKET ON SHAKY GROUND

The positive outlook that futures are forecasting didn’t filter through to the market as a softer tone on both selling days left the EMI 5 cents cheaper for the week at 1,219c/kg. The fall in the exchange rate on Wednesday night failed to activate any business, rather, sat a few buyers on the fence with a “wait and see” approach as to where the AUD$ will go. Wednesday’s sale opened with a bit of an each way bet as 19.5 and 18.5 and finer recorded marginal moves either way. 19, 20 and 21s slipped an average of 10 cents with 22 to 24 micron supported to the tune of 5 to 20 cents. It was hard to see how some of these indicators were quoted as cheaper with some of our 20 micron lots made up to 20 cents better than the indicator. Three lots of 19 micron with 1.3 VM averaged 1512 cents (over 20 cents higher than the indicator) and our 21s with 1.4 VM averaged 1361 cents with the 21 micron indicator at 1332 on Wednesday night. Thursday’s uncertainty saw losses of 5 to 15 cents for 19 and broader and up to 25 cent falls in the finer sector. The only indicators to finish the week in positive territory were 22 and 23s, up to 10 higher with all others 10 to 30 cents down.

Skirtings again bucked the downward trend posting good gains on both days. Wednesday opened with 5% VM and greater finding good buyer support jumping 20 to 30 cents with low VM pieces and bellies fully firm. Thursday saw the same pattern with burrier lots 10 to 20 dearer again. Cardings had an up and down week as crutchings remained unchanged, stains added 20 cents and all types of locks backed off to the tune of 15 to 20 cents to leave the MCI unchanged for the week at 725 cents. Crossbreds came under more pressure as quantity increases saw 26s lose 25 cents and 28 to 32 micron lots 10 to 15 cents back. The Crossbred selection made up 25% of the offering in Sydney with 28 micron the biggest volume on Wednesday followed closely by 30 microns. This situation is unlikely to change as we are in the peak Crossbred shearing time of the year.

Once again the cloud of uncertainty that is hanging over Europe looks to stall the good rises in the market of two weeks ago. The Italian debt crisis looms large on the horizon with Europe’s ability and willingness to bail out Italy (as they did with Greece) putting pressure on the likes of France, Britain and Germany. The eighth largest economy in the world owes over 1 trillion EUR and the likelihood of debt default leading to recession thus the possibility of a big drop in consumer demand, leading to lower prices is a major concern. Next week will see us offer 800 bales on Thursday with frayed nerves and anxious traders the biggest influence as to which way the market moves in the next few weeks.                            

                                                                   Agrisk FDIC Indicative Quotes 11/11/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1219 cents (ê 5) compared with 04/11/11                        1.0140 ê 0.0102 compared with 04/11/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1261 cents (ê6) compared with 04/11/11

WEEKLY MARKET REPORT

Week Ending 4^th November, 2011

Northern Micron Indices Comparison: Source of information: AWEX

A GOOD RISE BUT MORE TO COME??

Back from the Shaky Isles refreshed and rejuvenated! With the market’s good rise in my absence Don’s first question was “when’s your next week off?’ It was great to see last week’s price surge with prices more or less consolidated in the sales held this week - despite the distraction of the races in Melbourne. There was no buyer hang-over on Wednesday as rises stretched from 1 cent to 43 cents in Sydney and up to 30 cents in Melbourne with both regional indicators adding 13 cents to their previous sales quotes. The biggest increases were in the broader end as 22 and 23 microns posted 30 to 43 cent rises. 18.5 to 21 micron gained 10 to 20 cents with the sub 18 micron lots in sellers’ favour by up to 7 cents. The heat came out of the market on Thursday as most indicators gave up some of the previous day’s gains with the emphasis on 21 to 23s, back 15 to 25 cents. By the final lot on Thursday only 21s were in the negative (1 cent) with all other indicators recording single digit rises except 18.5, 20, 22 and 23s finishing 15 to 20 higher. As is the case when the market moves, discounts for VM, colour and cott shrink with some 2% VM lots costing the buyer more than FNF types on the odd lot.

Unlike the subdued fleece sector skirtings had a repeat of last week’s rises. The largest rises occurred in the low VM types with 5% and freer adding 50 to 60 cents to last week’s quotes with finer microns more keenly sought after. Heavier VM lots were not forgotten as 8% and greater jumped 30 cents. All these descriptions found good support on Thursday and remained fully firm. Cardings snuck ahead to add just 2 cents to the MCI, now at 725 cents. Finer locks (under 18 micron) added 10 to 20 cents with all others tending sellers’ favour. Crutchings remained fully firm with stains ending the sale slightly dearer on a limited offering. Crossbreds trended cheaper for the week as 28s lost 15 cents, 32s down 7 cents with all others unchanged. An increasing volume of Crossbred types could be the reason for the fall in some of these categories as 25% of the total offering in Sydney were XBs. On Wednesday, 28 and 30 micron had the most quantity of any micron. The % of XB wool has steadily been increasing as weekly volumes decrease in Sydney as this week’s offering of just 8,500 bales (smallest in 12 months) is evidence of no jump in volume of wool coming through. As explained in last week’s report, we are slowly coming back to last year’s figures as the year on year offerings are now just 22,000 bales ahead of last season. This will creep even closer as this season’s shearings are well ahead of last year’s rain affected season. An increase in national offerings shouldn’t be enough to spook buyers as futures point to a good market next week.                

                                                                   Agrisk FDIC Indicative Quotes 28/10/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1224 cents (é 9) compared with 28/10/11                         1.0242 ê 0.0248 compared with 28/10/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1267 cents (é10) compared with 28/10/11

WEEKLY MARKET REPORT

Week Ending 28^th October, 2011

Northern Micron Indices Comparison: Source of information: AWEX

THE GOOD, THE BAD, AND THE UGLY

We’ll get the bad and the ugly out of the way first. Our apologies go to anyone who was trying to call us this week and got the Telstra message “this number has been disconnected”. In Telstra’s efforts to transfer our main number from the Troy premises across to our new store somehow they disconnected it instead. It took them three days to find the problem and rectify it. Luckily I couldn’t get my hands on the pleasant Filipino who had no idea what was going on and, in the end, even the local Telstra boys were pulling their hair out and genuinely were embarrassed with the whole situation. Telstra haven’t heard the last from me yet.

On to the good news, after six consecutive weeks of losses the market wiped out four of the weeks in one foul swoop rising 57 cents overall. This was the largest weekly rise since February. In US currency the market rose 95 cents as the dollar also rose to be around $1.04 yesterday. The signs were there last Thursday that buyers were starting to look for quantity but we certainly didn’t expect to see several fleece indicators crack 100 cents for the week. Yesterday with only Sydney and Melbourne selling, as Fremantle was a one day sale, the pass-in rate of 5.5% was the lowest in seven months.

Rises were not only centred on merino fleece types as the skirtings also rallied around 60-80 cents which included high VM lots, of which we had plenty. Crossbreds 27 micron and finer rose around 25 cents whilst the broader types were unchanged. Cardings surprised and actually lost ground easing around 10 cents clean.

So why the sudden jump? Well one reason could be that six weeks ago the new season supply figures were showing an increase of around 15% compared to last year. We knew this couldn’t be sustained as last winter was very wet and, in many areas, shearings were running well behind, and the big sell off in WA last spring hadn’t come to the surface. Slowly the figures have been aligning themselves with last year and, as of this week, nationally we’re only up 6% on last year and WA is down a massive 21%.

The only thing to stand between now and a continued recovery is the nervousness about the economic problems in the EU and a slow United States recovery. China reportedly is still low on stocks and still growing. Not surprisingly, the major buyers this week were Chinese agents.

Luke will be back next week from his brief sojourn to the Shaky Isles to continue his weekly commentary.

                                                                   Agrisk FDIC Indicative Quotes 28/10/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1215 cents (é 57) compared with 21/10/11                                  1.0490 é 0.0301compared with 21/10/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1257 cents (é66) compared with 21/10/11

WEEKLY MARKET REPORT

Week Ending 21^st October, 2011

Northern Micron Indices Comparison: Source of information: AWEX

SLOW START, PROMISING FINISH

Yet another fall in the market as the AWEX EMI fell half of last week’s losses, just 2 cents to 1158 cents. What was encouraging was Thursday’s turn around in sentiment as gains were posted in all three centres with emphasis on Melbourne and Fremantle (up by 15 cents) to see their indicators rise slightly for the week to stop proceedings from being a bad week to “only just”. Fine wool growers didn’t find any relief to the falling market in Newcastle as 18.5 and finer fell 10 to 35 cents - this being a vast improvement on the previous four week’s sizeable falls. In fact, all indicators were lower as 19 to 20 micron fell slightly (up to 5 cents off) with 21s 15 cents down. Once again, the very stylish Newcastle catalogue, of which 78% of the adult fleece portion measured 38nkt or higher, couldn’t prevent a negative market but with Thursday’s rally one can only hope we are at the bottom of the market, if not very close. Thursday’s rise of 10 cents was the biggest one-day rise for 6 weeks! Only two lots were assessed as 1PP with two other lots at 14 micron selling over 3,000 cents. Talk of an “empty pipeline” and the market ‘at its bottom’ is encouraging but when this relates to a dearer market is the subject of much debate. Talk of a revival post Christmas is good, but a market on an upward trend before then would be most welcome.

Skirtings gained momentum as the sale progressed on the back of a “cracker’ of an offering to finish dearer for the week across all style and vm ranges. Some of the exceptional style, low vm and superfine lots were quoted as “extreme” making close to some fleece prices. Some heavy cott and jowl lots in Melbourne were out of favour but only lost 15 cents on previous week’s quotes with all other descriptions, as in Newcastle, put 30 to 45 cents onto their values. Cardings fell on the opening day and failed to recover any of the losses to finish 11 cents down for the week to leave the MCI at 733 cents. Despite the superior offering, locks in the 18 to 20 micron led to the falling indicator losing 10 to 20 cents with stains and crutchings solid all week. The minute crossbred selection in Newcastle (4.5%) left these almost neglected as a lack of volume and orders saw a 10 to 15 cent loss for most types.

Attention shifts back to Sydney this week as buyers will compete for 41,000 bales nationally. We can only hope that the good market from Thursday continues on. Even with the fundamentals of tight supply and strengthening demand from China, with this situation not about to change soon, the European debt crisis still hangs heavy over the market, hindering confidence. The key to all commodity markets is confidence and this is sadly missing in Europe.   

Agrisk FDIC Indicative Quotes 21/10/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1158 cents (ê 2) compared with 14/10/11                 1.0189 ê 0.0014 compared with 14/10/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1191 cents (ê10) compared with 07/10/11

WEEKLY MARKET REPORT

Week Ending 14^th October, 2011

Northern Micron Indices Comparison: Source of information: AWEX

FLAT, BUT UNSTEADY

A static market as the AWEX EMI posted a modest 4 cent drop to 1160 cents. Once again (as has been the case for over a month) finer indicators weighed heavily on the direction of the market. Types finer than 18.5 micron suffered falls on both days to record 10 to 30 cent losses down to 17.5. Finer than this were just in buyers’ favour, slipping up to 5 cents. The fortunes of these super-fine types may well be determined next week as Newcastle hosts its second sale of the season and buyers are fearing that again there may well be too much of the same type on offer as was the case at the last Newcastle sale. Without the support of Italian buyers, these types continue to fall with 17.5 and finer slumping 400 to 470 cents and 18 to 19 microns off by 150 to 280 cents since the last Newcastle sale (mid September). This week’s fall was the fifth weekly drop in a row adding up to a 134 cent (10.4%) fall - the biggest five week drop in three years. There is no guarantee that the Italians will start buying next week which could see another tumble in this sector if left up to the Chinese to prop the market up. But with no real competition on these types, they have been in free-fall and are still to find a level. Medium lots held up okay with 19 to 23 micron moving up or down by single figures only. Initially, these indicators made double digit gains only to see 19, 22 and 23 micron lose ground by week’s end due to the upward shift in the exchange rate to 102 US cents from 96 cents earlier in the week. The AUD$ has all but regained its lost ground after hitting a low of 93.88 cents two weeks ago. Whether a rising exchange rate will affect the market in the coming weeks is anyone’s guess. Burry types didn’t seem to suffer as some of our 2 and 3 % VM lots were making just as much as the FNF types, with some types looking 30 cents dearer than the indicator.

Skirtings performed well all week and posted solid, if not spectacular, gains. The emphasis was on 19 and broader around the 5% VM mark which moved ahead 20 cents with other quoted as sellers’ favour. The “C” and’ D” fault types looked to be in more demand as Gedge re-entered the market and the “holes” in the market seemed to have gone for the time being. The carding indicator moved ahead by just the 1 cent as washing locks rose 5 to 10 cents, crutchings looked 5 dearer and stains lost 10 cents late on Thursday. Crossbreds lost ground due to the unfavourable exchange rate with the broader end up to 5 cents off, 28 micron 10 cents down and the biggest loser of the week, 26 micron, off by a massive 63 cents.

We wait now to see how the market performs not only in Newcastle but in the run till Christmas as buyers sort out their buying strategies and see what steps Europe takes to service the bad debts of several countries. The solutions in Europe will go a long way to determining which way the market will go but the “ pipe-line” is empty and the supply of wool entering the market will not increase as some expect it to. We have no catalogue next week in Newcastle but will be offering 750 bales on Thursday 27^th October in Sale 17. As my fearful predictions of grand final winners came true 2 weeks ago I’ll try again as it’s a big weekend for sport. The Wallabies and the Kangaroos of course and Precedence for Bart Cummings in the Caulfield Cup. Good Luck!

Agrisk FDIC Indicative Quotes 14/10/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1160 cents (ê 4) compared with 07/10/11                       1.0203 é 0.0562 compared with 07/10/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1201 cents (é 3) compared with 07/10/11

WEEKLY MARKET REPORT

Week Ending 7^th October, 2011

Northern Micron Indices Comparison: Source of information: AWEX

STOCK MARKETS RECOVER – WOOL MARKET KEEPS FALLING

The Australian Wool Market opened the week with Melbourne only selling, offering 8,800 bales. The market was uneasy from the outset with buyers retreating from the 18.5 microns and finer in particular. The broader Merinos fared a little better, losing only 10 to 15 cents. Wednesday brought all three centres on line and a market playing catch-up in Sydney and Fremantle while Melbourne found a base and began to trade with more confidence in the Australian catalogues while over 50% of the New Zealand Merino catalogue was passed in. As the Australian Dollar value compared with the USD has now dipped well below par, the cost of Australian wool has become far more competitive than in the recent past. Thursday’s market opened with all centres now trading at the same level. Small gains have resulted, particularly in Sydney where the 18 to 19.5 microns have gained 10 to 15 cents. Melbourne brought a firm market with better styles adding to their overnight values while there continues to be discounting on low Nkt types. Fremantle’s market has also gained 10 to 15 cents on the final day with 19 to 22 microns affected. By week’s end all 3 centres recorded double digit falls of 20 to 40 cents. Sydney suffered the largest falls as 17.5 and finer collapsed, tumbling 135 to 215 cents. It seems fine wool is really on the nose and is being all but neglected as the losses now for 18 micron and finer over the past month are in the range of 250 to 400 cents. Medium types, although cheaper by 20 to 45 cents, looked to have bottomed out as Thursday did see a dearer trend for 18 micron and broader in the three selling centres. Thursday’s rising market put a stop to 10 consecutive days of falls where the EMI lost 132 cents with the losses in US cents/kg amounting to 264 cents.

Merino skirtings have, in most cases, mirrored the fleece wool with big losses on the opening day to the tune of 60 to 80 cents with emphasis on finer, low VM types with broader burry lots actually coming under buyer pressure. All descriptions and types remained solid to dearer on the final day except for heavy colour and cott which are still out of favour with most traders. Cardings rose with the rest of the market as the MCI added 8 cents to its value as stains were 30 cents up while fine locks jumped 20 cents with all other locks and crutchings solid. Crossbreds remained firm except the finer types under 28 micron cheaper by 10 cents.

Another historic day here at Don Macdonald & Co as we bid farewell to our temporary location at Troy Crossing with all wool store staff and machinery now at our new spot in West Dubbo. Only the key admin staff and the author of this report remain on the old site with the final move of staff and office equipment to take effect this afternoon. All phone, email and fax numbers remain the same and everyone is more than welcome to call in at any stage to have a look at our brand new state-of-the-art facility. Hopefully the market has bottomed out and we can look forward to improving wool prices, especially in the fine wool sector. A national catalogue of 43,000 bales is on offer next week with the mood of a few buyers we spoke to this morning

Agrisk FDIC Indicative Quotes 07/10/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1164 cents (ê 29) compared with 30/09/11                               0.9641 ê 0.0154 compared with 30/09/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1198 cents (ê 40) compared with 30/09/11

WEEKLY MARKET REPORT

Week Ending 30^th September, 2011

Northern Micron Indices Comparison: Source of information: AWEX

STOCK MARKETS RECOVER – WOOL MARKET KEEPS FALLING

The wool market lurches from bad to worse as the EMI slips under 1200 cents for the first time since January of this year. A 42 cent fall now has the EMI on 1193 cents. All three centres recorded double digit falls on both selling days. Any sentiment of positive note has all but gone from the market as buyers struggle to sell any quantity of any type, especially in the fine sector.  Only the Crossbreds and Cardings escaped with prices in tact this week. Heavy uncertainty over Europe’s ability to ride out the current financial crises and avoid an almost certain slip back into recession is weighing heavily on confidence and direction of stock markets as the yoyo effect is a daily ritual with any sort of good or bad news driving the markets up or down. No sector of the fleece market escaped the negative tone as 18 and finer fell 105 to 140 cents - this despite a mini recovery on Thursday of 17 and finer. This recovery was partly a result of a clip of ours under 18 microns all selling above their indicator level. New England Wool bought all but 3 bales of fleece (32 bales) ranging in price from 1230 to 1520 cents and also secured the BKN, all for processing in Biella, Italy. Well done to this grower on a clip equal to anything to come out of a super-fine area. All other indicators fell from 30 to 50 cents for 19.5 to 23s and 65 to 80 cents for 18.5 to 19, again discounts for heavy colour and cott were the order of the day with some lots attracting ‘NO BID”.

Once again, skirtings were hit hard with most types feeling the effects of buyer neglect. Fine lots lost 70 to 80 cents, while 20 micron and broader fell by 40 cents, with the burrier end of the types (8 VM +) least affected. Cardings, as mentioned, remained fairly static with fine locks 20 down on the first day and stains 10 dearer on the final day with some burry bellies and carbonising pieces looking cheaper. Crossbreds moved very little as 28s lost 10 cents with all other types remaining unchanged from the previous week under a smaller offering than the past four weeks.

A tough few weeks for the market as mills and traders are not likely to commit themselves to buying wool unless they have solid commitments at the other end. Most business has ground to a halt with little prospect of orders being booked up over the next few weeks. Medium wools might be close to the bottom, but unfortunately fine types may suffer more losses as one buyer said they “cannot sell a kilo” of 18 or finer into China with only the better style clips, as was the case this week, being sought after by Italy. A quick look at the table above does tell us the market is in far better shape than 12 months ago but, going forward, the light at the end of the tunnel is small but hopeful of a turn-around in the markets fortunes sooner rather than later. Next week sees a national catalogue of 48,000 bales with little hope of a dearer market, but at least it’s rained across a wide area! And – dare we say it – Go Manly and Geelong! in this weekend’s Grand Finals (the opinion of the author of this report do not necessarily reflect those of his colleagues!)

Agrisk FDIC Indicative Quotes 30/09/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1193 cents (ê42) compared with 23/09/11                                0.9795 ê 0.0220 compared with 23/09/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1238 cents (ê48) compared with 23/09/11

WEEKLY MARKET REPORT

Week Ending 23^rd September, 2011

Northern Micron Indices Comparison: Source of information: AWEX

EVERYTHING FALLING – OH DEAR!

Another bad week for the wool market as global concerns over the Northern Hemisphere economic downturn send stock markets into meltdown and all and sundry awaiting news of several European countries preparing to default on their $billion loans. Only a bail-out from France and Germany will save the countries in strife with these two economies already stretched to their borrowing limits. Even the currency fall to 97 US cents overnight may not be enough to correct the slide in the wool market. All segments of the processing chain are reporting cautious buying patterns with a lot of traders now adopting a ‘wait and see’ approach. The uncertainty could dampen demand to the point of potentially big falls in the market. As this week’s falls indicate, buyers are in no hurry to book wool up or buy “stock” with most reporting “no direction” as to what to do in regards to buying wool at a certain price level or their ability to on-sell their purchases at profitable margins. As a result the market got progressively cheaper as the week went on with some of the finer indicators in free fall. After the market was flooded with too much of the same type in Newcastle, buyers virtually had no orders for 19 micron and finer. This ridiculous situation of Newcastle holding just three sales between September and November and one in February just to appease some New England wool growers and Brokers has to be looked at. Surely a more even spread of types through more orderly marketing over a few weeks is the way to go, not expect buyers to absorb too much or the 1 type for 1 sale in every 4 weeks! Last time we checked the buyer was still our customer! The finer end of the market (18 and lower) took the biggest hit as falls of 115 to 145 cents were recorded. 18.5 to 19.5 and 23s lost 50 to 75 cents with the remaining fleece indicators averaging 30 cent falls. Discounts for VM, colour and cott grew, with some doubling from two week ago. The EMI, now at 1235 cents has lost 59 cents in the last three sales since its mini-recovery a month ago. We are at the lowest point for eight months.

Skirtings held their levels early in the week only to weaken late in the sale. Initially, fine pieces and bellies lost 10 to 20 cents with the broader types giving up the same amount on Thursday. Lots with heavy cott, colour and jowl were discounted - double the rate of a few weeks ago. Cardings gave up last week’s positive moves as all types fell by 20 to 30 cents, which saw a 19 cent fall in the MCI after last sale’s 20 cent rise. Crossbreds weren’t immune to the sour market as losses of up to 15 cents were recorded.

Well done to the Duncan family from Louth and Steven Carter from Nyngan who were the first clients to deliver wool to the new wool-store. As this report is written the core machine is on its way over there and should be operational by next Thursday. The address of the new wool-store is 2L Richardson Rd, West Dubbo (in behind Metalcorp and Sam’s Hire). A smaller offering of 43,000 bales will probably not be enough to stop the falling trend next week.           

AgRisk FDIC Indicative Quotes 23/09/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1235 cents (ê39) compared with 16/09/11                                1.0015 ê 0.0196 compared with 16/09/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1286 cents (ê39) compared with 16/09/11

WEEKLY MARKET REPORT

Week Ending 16^th September, 2011

Northern Micron Indices Comparison: Source of information: AWEX

A DISAPPOINTING DROP

What goes up must come down! An unfortunate saying, but one that has rung true for this week’s wool market. After a good rise and the forecast of better things to come the previous week, the market gave up most of last week’s gains despite the superior offering listed for the first Newcastle sale of the season. The Newcastle catalogue was one of the best in years with 76% of the adult fleece selection 40nkt or better and 24% appraised as “spinners” style. A sharp fall in futures late on Monday afternoon set the tone for the week as the market fell progressively over the three days. The excellent types and the falling exchange rate (4 cent fall) could not prevent the sliding trend, with only the spinners and better style lots attracting Italian interests to post 100 cent increases. Apart from these types all other indicators lost 25 to 70 cents. The national offering of over 52,000 bales scheduled for next week seems to have scared some buyers into thinking that there is plenty of wool around, thus no need to rush in and “panic buy”. Just three lots made over 3,000 cents with a top price of 3,270 for a 14.6 micron lot.

The attractive offering of skirtings also commanded good buyer interest as the stylish, low VM lots made significant gains with all other types closing the week where they started. Cardings continued to claw back the August losses to see the MCI add 20 cents to its value to be at 751 cents by the close of trade. The rises were from 15 to 30 cents across the board regardless of style or VM. One carding buyer we spoke to commented on a few lots of crutchings that made over 850 cents greasy, yielding over 70% and FNF going into “open-top” fleece orders and locks being purchased for the same order making over 600 cents; incredible money! The very small but select crossbred catalogue (6.7% of the Newcastle sale, compared with the previous 5 week average of 14.6%) added up to 20 cents to their previous week’s quotes.

A significant week for us here at Don Macdonald & Co as we warmly welcome Ian Sharp on board. Ian will be our Sydney based Technical Manager and Auctioneer as well as area rep looking after clients from Cooma to Bourke. He brings with him 37 years of invaluable experience. His enthusiasm and keenness will rub off on all of us as he comes off his enforced 3 month hiatus. We wish him all the best. This week also marks the start of operations in our new wool-store. We have now relocated 1000 bales to the new site and receivals as from next Thursday will be directed there. The address is Richardson Rd, West Dubbo. Turn off the highway at Metalcorp and it’s the big shed on the left after Sam’s Loos!               

AgRisk FDIC Indicative Quotes 09/09/11

MAJOR AUCTION BUYERS (Bales)

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

 Eastern 1274 cents (ê20) compared with 09/09/11                              1.0211 ê 0.0387 compared with 09/09/11

 Northern Market Indicators (AUD cents/kg clean)

 Northern 1325 cents (ê19) compared with 09/09/11