WEEKLY MARKET REPORT

Week Ending 9^th September, 2011

Northern Micron Indices Comparison: Source of information: AWEX

MARKET RECOVERS SOME LOST GROUND

Our prediction of a dearer market rang true as the past two weeks of consolidation led to a solid basis for a reasonable volume of wool to be traded. Most exporters booked up wool late last week and early this week and this, coupled with the falling exchange rate, augured well for a rise in the market. The market was off to a flying start on Wednesday as most indicators recorded 10 to 35 cent gains. The finer indicators (finer than 17.5) failed to fire to finish in buyers’ favour. The rises weren’t as pronounced on the final day of trading with gains of up to 10 cents. Most notable was the shrinking discounts for VM and colour and cott. Some of our fleece lots with colour and soft cott made up to 20 cents clean more than same micron lots with the only fault being VM. One buyer we spoke to thought the discounts for VM in the 2 to 5 % range had halved with big volumes of these types being booked up over the past few days. This week’s rising market saw us sell every lot, our first 100% clearance. 57% of our fleece lots made over 1000 cents with the average greasy price for fleece wool in Sydney this week at 1079 c/kg. This compares favourably with Melbourne - their fleece price was 896 cents - despite the Sydney offering just 0.9 micron finer than Melbourne’s selection. The highlight was the 25 micron indicator in Melbourne climbing a massive 82 cents.

The good gains weren’t confined to the fleece room as skirtings pushed higher on both days. By the close of trade all types and VM levels looked to be 30 to 40 cents up on last week. We had three lots that made over 1000 cents with two lots of Nyngan BKN averaging 610 cents with LKS from Yeoval making 513 cents - a great result! Cardings also pushed higher as the MCI lifted by 26 cents. Locks and Crutchings added 20 to 30 cents while Stains performed the best in this sector with 35 to 40 cent rises. Crossbreds took a breather this week and remained virtually unchanged bar the finer end with 25s mentioned earlier and 26 microns posting a 25 cent rise.

The cycle of upward prices looks to have started again as the EMI added 24 cents to sit at 1294 cents. This rise follows on from the poor start to the resumption of sales after the July recess. The opening two weeks saw the EMI fall 98 cents with the next three sales (including this week) claw back 31 cents. Next week’s action moves to Newcastle as they host their first sale of this season. 15,000 bales are rostered with a sprinkling of superfine clips on offer to test demand for this sector of the market. Growers should notice a big difference in prices as some of these types have nearly doubled in value in 12 months. Our new wool store is nearing completion as the shed is practically finished and the office is being built at a rapid rate. Photos are on the website to check progress of construction.     

AgRisk FDIC Indicative Quotes 09/09/11

MAJOR AUCTION BUYERS (Bales)

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

Eastern 1294 cents (é24) compared with 02/09/11                                                1.0598 ê 0.0099 compared with 02/09/11

Northern Market Indicators (AUD cents/kg clean)

Northern 1344 cents (é25) compared with 02/09/11

WEEKLY MARKET REPORT

Week Ending 2^nd September, 2011

Northern Micron Indices Comparison: Source of information: AWEX

DEARER AND GAINING MOMENTUM

Last week’s market gave us some good signals that, for the time being, the market had bottomed out. Coming off last week’s stable market we did actually see a little improvement this week as the EMI lifted by 6 cents to sit at 1270c/kg. Most indicators moved ahead by single figures with 21s up by 10 cents. A few indicators did lose some ground, with 18.5 and 19s back 5 and 22 microns down 11 cents. The market started on a positive note with prices edging higher - more so in Melbourne on the back of a superior offering out of Launceston and western Victoria with some “spinners” types quoted 90 cents up on the previous week’s sale in Melbourne. In fact, price difference between some 40 and 43 Nkt strength lots finer than 18.5 micron was out to 150 cents! This trend continued on the second day when we sold. Again the market improved with some of our lots under 18 micron making 40 cents better than the indicators. One buyer, New England Wool, a noted super-fine buyer of FNF types, has had to loosen his specifications to fill orders buying fleece types up to 2% VM as very few lots now contain under 1% of burr with this situation not really expected to improve as we move into Spring shearing. Normally, catalogues would be full of FNF fleece lots, but since the wet summer and big season earlier in the year, a higher % of wool is carrying more VM leaving less freer types in the catalogues. This week’s highlight was the sale of 3 bales from the Picker family at Bigga. The bales, assessed as 1PPs, averaged 13.7 micron and made from 3,560c/kg to 3,200 cents. Reasonable money we might think when compared to a 20 micron lot that is making around 900 cents, but this sector of the market has actually collapsed. Three years ago a 13.9 micron lot of theirs made 23,000 cents and a bale of 13.6 bought 30,000 cents!   

Merino skirtings were also well supported as all VM ranges benefited from keener competition across the board. By week’s end most types had recorded gains of up to 10 to 20 cents. Cardings made subtle gains with the best performer being stains, posting a 10 cent rise. Movement in the Crossbred sector was limited as medium types finished in buyers’ favour with the broader lots (30 to 32 microns) unchanged. Some finer types did increase in value as 24s and 25s  looked 10 to 15 cents better than last week.

Just a reminder that three Flystrike and Lice Management days will be held in the third week of September in the Western Division. Louth on 20^th, Cobar 21^st and Nyngan 22^nd. Book your spot by calling Trangie Ag Research Station on 6880 8000 (Trudie Atkinson). 38,000 bales are catalogued next week with a solid to dearer market forecast.

AgRisk FDIC Indicative Quotes 02/09/11

MAJOR AUCTION BUYERS (Bales)

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

Eastern 1270 cents (é6) compared with 24/08/11                                  1.0697 é 0.0208 compared with 24/08/11

Northern Market Indicators (AUD cents/kg clean)

 Northern 1319 cents (é4) compared with 24/08/11

WEEKLY MARKET REPORT

Week Ending 19^th August, 2011

Northern Micron Indices Comparison: Source of information: AWEX

BAD START CONTINUES

Hopes of a stable market were gone as early as Tuesday as all the talk was cheaper. Despite shrinking quantities over the next three weeks to a national weekly average of 42,000 bales and a relatively steady exchange rate, the market took another hit (albeit not as big as the previous week). The opening day saw losses of 30 to 40 cents for 18 micron and finer and the 20 micron indicator. All other indicators lost 10 to 20 cents bar 19s which posted a modest 2 cent gain. Thursday saw losses mainly in the finer types and broader end. 18.5 and finer again suffered from a lack of demand, shedding 40 to 60 cents. 19 to 21 micron were in buyers’ favour with 22 and 23s averaging a 15 cent fall. The 39 cent fall that the AWEX EMI suffered this week followed on from last week’s 59 cent drop to see the indicator on 1263 cents - its lowest point for 6 months. The 2 week fall of 98 cents is the biggest fortnightly fall in almost three years. Buyers are reporting difficult trading conditions for types under 18.5 micron, with virtually nothing sold regardless of vm. The falls of 60 to 90 cents in these categories this week is an indication of this lackluster sector of the market. The middle micron lots may be closing in a level of stability as falls of up to 15 cents (20s lost 44 cents) were met with some relief! 22s and broader lost 35 to 40 cents - a sign that these reached unsustainable levels before the July recess.

Skirtings suffered the same fate as the fleece room with opening day losses 20 to 30 cents with emphasis on the finer end of the offering. Buyer support was keener early on the final day but did wane towards the end of the day to leave all descriptions in buyers’ favour. Cardings continued their fall from grace as locks fell 40 to 50 cents with crutchings and stains giving up 30 to 40 cents. Cardings in the West seem to be doing a lot better as their MCI is 772 with the Northern MCI now down to 702 cents (a drop of nearly 100 cents since sale 01). Crossbreds couldn’t add to last week’s gains and slipped 5 to 10 in the 28 to 30 micron range with 26s losing 35 cents.

Uncertainty is still gripping not only the wool market, but global financial markets. The threat of a Northern Hemisphere recession is more likely than not. The big overnight losses in the US to see the Dow Jones slip to under 11,000 is a blow to any confidence that may have existed. This, coupled with ongoing debt troubles in Europe, have economists and, more importantly, consumers around the world nervous about their spending habits. If people stop spending demand will certainly fall away and, with it, wool prices. Mills are cautious about their buying patterns and nothing will change in the immediate future given the economic conditions faced by many countries north of the Equator. Lack of supply is in our favour with no real movement either way soon. Next week’s national offering is under 40,000 with Don Macdonald& Co first up on Tuesday.    

AgRisk FDIC Indicative Quotes 19/08/11

MAJOR AUCTION BUYERS (Bales)

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

 Eastern 1263 cents (ê39) compared with 11/08/11                                               1.0491 é 0.0217 compared with 11/08/11

 Northern Market Indicators (AUD cents/kg clean)

 Northern 1312 cents (ê37) compared with 11/08/11

WEEKLY MARKET REPORT

Week Ending 12^th August, 2011

Northern Micron Indices Comparison: Source of information: AWEX

OFF TO A BAD START

Wool sales resumed this week after the annual three week winter recess with a reduction in prices across the board. With economic uncertainty gripping the Northern Hemisphere, an 11 % move in the exchange rate within a week and the second largest offering since January, the market was always going to be put under pressure. From the opening lot on Tuesday losses were widespread with all indicators shedding 50 to 65 cents, except 22s and 23s, dropping 35 to 45 cents. Types with heavier burr, colour and cott recorded losses of up to 100 cents, but by the close of trade increases were being found in some microns. This slightly better tone continued on through to Wednesday when we sold with most indicators posting a 5 to 10 cent gain. Luck was on our side as, by Thursday, the tone had slipped and the market retreated by another 10 to 40 cents across the board. By week’s end 17 and finer fell by 120 cents and more with 17.5 to 22 micron giving up 65 to 90 cents and 23 and 24s dropping 45 cents.

Skirtings followed a similar pattern to the fleece room as medium types lost 30 cents with the finer pieces and bellies giving up 60 to 80 cents. The firm to dearer tone that we experienced on the Wednesday couldn’t be sustained on Thursday as an increase in 6% vm and higher early in the day was negated as all descriptions closed 10 to 20 cents lower. As was the case with the other sectors of the merino market, cardings also took a hit. The 50 to 80 cent fall on the opening day for all types was negated slightly on Wednesday as gains of 10 cents were recorded. Any momentum from the previous day was well and truly gone by Thursday as falls of 10 to 20 cents were the order of the day. The currency sensitive crossbred sector bucked the falling trend to post 5 to 20 cent gains. After 15 to 20 cent falls on Tuesday the market recovered to give this week’s market some good news.

A disappointing start to this series of sales as the 59 cent fall in the EMI was the largest weekly fall in 10 months.19% of the offering was passed in, the highest pass in rate since April 2010. Deepening concerns over economic stability in Europe and the USA teetering on the brink of bankruptcy coupled with their downgrading to AA+ of their credit rating, has made for an uncertain and nervous few weeks for global stock markets as the reality of another recession looms large. The inability of some countries to repay mountainous amounts of debt to the World Bank has the ability to rattle consumer confidence in our most important wool consuming markets. If the drop in demand comes, this has the potential to hurt the wool market and force prices down. The supply situation will not change dramatically as reports of poor lambings are common-place, thus keeping pressure on the ability to increase numbers any time soon. National offerings drop to 47,800 next week with Don Macdonald cataloguing 1500 bales late on Thursday. Fingers crossed that the market can stay somewhere at these levels.

AgRisk FDIC Indicative Quotes 12/08/11scriptions

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1302 cents (ê59) compared with 13/07/11                                                1.0274 ê 0.0357 compared with 13/07/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1349 cents (ê61) compared with 13/07/11

WEEKLY MARKET REPORT

Week Ending 15^th July 2011

Northern Micron Indices Comparison: Source of information: AWEX

WE’RE NOT DONE YET!

A reasonable finish to wool sales as fears of another tough week had abated by the end of selling on the second day. Talk of a 30 to 40 cent fall rang true from the opening lot on Tuesday, but buyers seemed to warm to the task as a recovery of some sort had been staged when we sold midway through the day. Even though the market was cheaper, the outcome was far better than what was predicted earlier in the day. 20 to 22s only lost 5 to 10 cents, except for 21s which posted a 3 cent gain. Finer types varied with some better 17 to 17.5s pushed higher by Italian orders. However, the lower style and tender lots dragged 16.5s back 60 cents; 17, 18.5 and 19s  slipped an average of 15 cents and the 18 and 23 micron indicators losing 25 to 35 cents. The recovery kept going on Wednesday as 18 and finer were unchanged with all other indicators 5 to 15 cents higher. Even with the EMI recording only a 2 cent rise it was a great way to go into the three week winter recess. As the table above illustrates, all medium micron lots staged a recovery with 17, 18.5 and 23s down 10 to 15 with 18 and 16.5 microns hardest hit. We still had buyers booking up passed in lots on Friday morning - a good sign of genuine enquiry with talk of plenty of wool booked up for August and September shipment. This augers well for a good start to sales which will recommence on Wednesday 10^th August providing no economic bad news comes out of the Northern Hemisphere in the next three weeks that may dampen demand.

Skirtings held their ground on the opening day bar the lots carrying heavy cott and colour again not well sought after. The final day’s offering came under renewed buyer pressure with light vm types under 5% 10 to 20 dearer with the straight burrier types closing 10 cents dearer. Cardings had an up and down week as fine locks less than 19.5 micron lost 20 cents only to claw back 10 cents on the final day of sales. Stains and crutchings also added 10 cents to last week’s quotes, this despite buyers having to contend with the largest weekly offering of cardings in Sydney for 9 years (3100 bales-15% of the week’s offering). Crossbreds also had a good week with 28 and 32 micron indicators up by 5 to 15 cents while 26 and 30 microns fell up to 5 cents.

A well earned rest now for buyers and brokers alike as we move into the annual three week winter recess. For us here at Don Macdonald & Co it has been an extremely hectic period since our first sale in early May. In the eleven weeks till this week’s sale we’ve offered over 11,500 bales to the trade with a clearance of 92%. The next six months and indeed beyond hold much hope for a sustained wool market at these levels or, dare we say, even higher?  Supply is still extremely low and demand is good - a situation that won’t change in the for-seeable future. Let’s hope badly needed rain comes before our next report on 12^th August.                                                            AgRisk FDIC Indicative Quotes 15/07/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1361 cents (é2) compared with 07/07/11                         1.0631 ê 0.0111 compared with 07/07/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1410 cents (é1) compared with 07/07/11

WEEKLY MARKET REPORT

Week Ending 8^th July 2011

Northern Micron Indices Comparison: Source of information: AWEX

SEASON OPENS ON A SOFTER NOTE

The new season started as the last season ended - trending downward. Reasons for the fall varied from too much wool in the opening two weeks of the season to worries about the economic problems in Europe and North America and Chinese mills unwilling to book up wool at these levels. The talk of a 20 to 30 cent fall from the outset rang true from the opening lot on Wednesday as 15 to 30 cent falls were recorded for most indicators. Other indicators such as 17.5, 18 and 19 suffered heavier losses of 35 to 45 cents even though the FNF and “Best Topmaker” style lots were dearer with 17s also in sellers’ favour. Despite this fall early in the day, the market did in fact improve as the day went on. Thursday’s offering met with similar buying patterns for the finer indicators as 17.5 to 18.5 fell 10 to 29 cents, but the better lots posted good gains. Medium types were solid with 21s adding 14 cents to their overnight values. One highlight came out of Melbourne on Wednesday with an 11.4 micron bale of shedded and coated wool from 2 year old wethers making 200,000 cents (highest price in 3 years). This bale, measuring 66mm & 41nkt was bought by G Schneider Australia for their Italian client, Lora Piana to be woven into cloth at their mill in Milan.

Unlike previous weeks, skirtings failed to maintain their good levels and followed the pattern of falling prices in the fleece room. Most descriptions opened up around 30 cents cheaper with most emphasis on 5%vm and lower. The heavier vm lots also came under pressure to fall by 50 cents. On our day’s sale (Thursday), most types remained unchanged except some short burrier types quoted cheaper by 10 to 20 cents and the usual discounts for lots with colour and cott. Cardings started the new season with a 20 to 30 cent fall for all types and vm levels on the opening day and remained at these rates on Thursday. An increased volume of Crossbreds saw all descriptions ease on both days bar the finer indicators (25 and 26s) which gained 10 to 15 cents while 28 to 32 micron lots dipped by 30 cents.

Even with the market falling, value/bale is still very good. This week’s catalogue was our biggest to date with 1962 bales offered with 1834 bales sold averaging $1460/bale. Our biggest buyer was Williams Wool buying 366 bales costing $501,244 at an average of $1370/bale with a total of 27 buyers operating on our catalogue. Next week will see Don Macdonald & Co offer 1670 bales second up on Tuesday in the final sale before the three week winter recess. A finish to the market at these levels may be the best the outcome we can hope for as a national catalogue of 59,000 bales is on offer, the largest weekly offering since mid January.     

AgRisk FDIC Indicative Quotes 08/07/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1359 cents (ê40) compared with 30/06/11                                                1.0742 ê 0.0005 compared with 30/06/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1409 cents (ê46) compared with 30/06/11

WEEKLY MARKET REPORT

Week Ending 1^st July 2011

Northern Micron Indices Comparison: Source of information: AWEX

THE CORRECTION WE HAD TO HAVE?

A reality check this week as the talk of a correction over the past few weeks came to fruition and put everyone out of their misery as the EMI gave up 27 cents to finish the season at 1409 cents. This week’s falls snapped a fifteen day rising streak with both days suffering double digit losses. The national offering of 31,300 bales was the second smallest three-centre catalogue in 12 months. The middle microns took the brunt of the falls as 19.5 to 21s slumped 70 to 85 cents. Finer categories (18.5 and 19) and 22 and 23s were back 25 to 45 cents. Superfine indicators bucked the falling trend and posted modest gains of 5 to 20 cents on the back of a good selection and renewed Italian interest. As is nearly always the case off types with heavy cott, colour and high vm were discounted greatly with the odd lot almost neglected. The reasons for this week’s falls vary from the anticipated correction discussed earlier to the rising AUD$ to larger than expected quantities over the next two weeks before the annual 3 week winter recess. It seems now that the buyer who was holding stock in China may have got his wish of a cheaper market as they had not booked up a bale for over four weeks and virtually been on the sidelines for the past fortnight. Hopefully this week’s fall allows mills to purchase some stock and stabilise the market. A rise in currency will nearly always be used as a reason for a falling market.

The skirting market was not affected nearly as much as the downward trend of the fleece room. Types containing vm levels under 5% came under renewed pressure and lifted in value by as much as 30 cents with the emphasis being on the “better” style pieces and bellies. Again, high vm lots with colour, cott and jowl were discounted heavily. After a solid opening session, cardings lost ground on the final day as fine locks and crutchings surrendered 15 to 20 cents with stains unchanged. Crossbred types bucked the falling trend adding up to 5 cents to last week’s values.

A terrific year for the wool market! A rise of just over 500 cents, (898 to1409) and most of that since November 2010. This equates to a 57% increase, outdoing the 45% rise in 1988. In US cents terms, the rise is a staggering 97.9% - 765 to 1514 cents. Just two weeks ago the rise hit 99.5 %. Incredible numbers considering the AUD$ recorded a rise of 22% (85 to 107) in 12 months. Good news, construction has finally started on our new wool store, with photos of a very relieved manager and wool store manager on our web site (www.macwool.com.au and go to ‘Weekly Market Report’). Predictions for next week look tough, but a stable market would be a good outcome.

AgRisk FDIC Indicative Quotes 01/07/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1409 cents (ê27) compared with 24/06/11                               1.0747 é 0.0199 compared with 24/06/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1455 cents (ê36) compared with 24/06/11

WEEKLY MARKET REPORT

Week Ending 24^th June 2011

Northern Micron Indices Comparison: Source of information: AWEX

A TOUCH HIGHER AGAIN

The market rose fractionally again to defy most pundits’ predictions of a softer trend. A 6 cent rise in Sydney and Melbourne equated to a 5 cent rise for the EMI to 1,436 cents. The market split in two directions as 19.5 and finer fell up to 18 cents while the broader types from 20 microns out continued their great run to add 5 to 15 cents. The rise of 6 cents in Sydney did surprise us as only very few FNF lots seemed to hold their ground on the opening day, with burrier fleece lots looking cheaper. Although AWEX could not find any cheaper lots in their quotes and left all indicators unchanged, bar 22s - up 1 cent and 18s back 9! The second day saw most movements as falls of 7 to 18 cents for 19 and 19.5 were negated by good increases for middle micron lots. The market in Melbourne was even more erratic as an excellent selection of sub 17 micron types saw an 88 cent rise for 16.5s with 18.5 dropping 29 cents. Their indicators moved in two directions as finer lots under 18 lifted; 18.5 to 19.5 fell 15 to 25 cents; with 20s and broader gaining up to 20 cents.

Skirtings also tracked the fleece room’s direction as the better style and good colour lots under 4% vm were keenly sought after and increased in value to the tune of 20 cents. The burrier pieces and bellies carrying over 8% vm tended to sell in buyers’ favour with the odd lot dearer that contained little cott, jowl and colour. Once again, the small selection that did contain heavy cott and jowl were discounted again with only very little interest in these lots. Cardings posted solid gains for the third week in a row. Locks and stains recorded 20 cent rises while crutchings were quoted up by 10 cents. The MCI has now added 89 cents in the past four weeks after hitting a low of 742 cents in late May - a great recovery! Crossbreds also added to their values with an average rise of 13 cents. The sudden drop off in supply over the past few weeks has certainly helped their cause.

For the second week in a row, Don Macdonald & Co. has dominated offerings in Sydney. After having the second biggest catalogue last week behind Landmark, this week’s 1462 bale catalogue was the largest, a great achievement since our first sale in early May. The market, despite talk of a cheaper trend and Chinese bids at 20 to 30 cents below the market, continues to break records. This week’s 22,000 bale national offering is the smallest two centre sale in 2 years with the last three weeks averaging just 23,600 across the country. Fremantle sells again next week with the last sale of the financial year to be held followed by two sales in the first two weeks of July before the three week recess with national offerings to average 33,000 bales. With futures trading higher (coupled with small quantities) it’s hard to see the market not remaining at these levels or, dare we say, even better.                   

AgRisk FDIC Indicative Quotes 17/06/11,

MAJOR AUCTION BUYERS (Bales)

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

         Eastern 1436 cents (é3) compared with 17/06/11                              1.0548 ê 0.0026 compared with 10/06/11

        Northern Market Indicators (AUD cents/kg clean)

         Northern 1491 cents (é3) compared with 17/06/11

WEEKLY MARKET REPORT

Week Ending 17^th June 2011

Northern Micron Indices Comparison: Source of information: AWEX

A GOOD MARKET, BUT HAS IT PEAKED?

A modest lift of 11 cents to see the AWEX   EMI finish the week at 1,431 cents was another great result for the wool market. Even with Fremantle selling this week , their catalogue of only 4,600 bales (with a national total of just 26,000 bales) this was the smallest  three centre  sale ever recorded in AWEX’s history stretching back to July, 1995. With the 2 daily increases this week, that bought the consecutive daily rises to 13, also an AWEX record. It was a market that was split in two as 19 to 23 micron put on 5 to 20 cents on the  opening day only to keep falling early on Thursday then recover some lost ground late on the final day. Just two categories managed double digit rises for the week - 21s up 16 and 22s were 12 cents dearer. The other middle micron indicators of 19 to 20 and 23 added up to 7 cents. As has been the case for a few weeks now, finer lots struggled to find any direction with the better style lots dearer and poorer style lots pushing these indicators down 5 to 10 cents. With this week’s subtle rises some MPGs are at record or near record levels. The 22 micron indicator at an average of 1,456 has never been higher, overtaking the 1988 record. 23s are also closing in on a record now at 1,318 cents - just 20 cents from their spike of 2002.  Finer microns, even at these good levels, are still a long way from their peaks of 1988.

Skirtings also had a mixed week with the better style lots (containing little vm) up to 8% lifting 10 to 20 cents on the opening day with lots containing colour and cott and higher degrees of burr irregular on the final day. Cardings continued their recovery as the MCI broke through the 800 cent barrier (812 cents, up 42), again as all descriptions bar heavy vm (15%>) added around 40 cents to last week’s values. Crossbreds improved along with most sectors of the market as all types and microns were around 20 cents to the good by the end of the week. This was a great result for one of our crossbred growers who had accumulated over 200 bales over the past few years and sold every bale with a100% clearance of all our crossbred wool on offer - an achievement that is rare in any section of the catalogue.

Even with the market rising, buyers were very cautious about any further improvements in the short term. Viterra, who have made a habit of finishing in the top three buyers week in week out, did not buy a bale of fleece on Thursday, citing plenty of stock in the pipeline as the reason for not buying. This stock reportedly, offered out to processors at 20 to 30 cents under current rates was not booked up, thus hinting at a correction over the next few weeks. Even with national totals under 30,000 bales for the next three weeks this lack of wool may not be enough to stop a correction.

AgRisk FDIC Indicative Quotes 17/06/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1431 cents (é11) compared with 10/06/11                                                1.0574 ê 0.0060 compared with 10/06/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1485 cents (é10) compared with 10/06/11

WEEKLY MARKET REPORT

Week ending 10^th June 2011

Northern Micron Indices Comparison: Source of information: AWEX

ANOTHER CRACKER

History was made this week as the EMI broke through the 1,400 cent barrier. With just 22,800 bales on offer on the Eastern seaboard with no sale in Fremantle, this week’s offering was the smallest in 2 years. The EMI continued further into uncharted territory as a 1.5% (22 cent) rise saw the EMI go to 1,420 cents. Again, as has been the case for a few weeks, the 19.5 to 23 micron categories led the charge recording rises of 35 to 60 cents and 19s up by just 8 cents. The fine wool sector of 18.5 and finer had mixed results as a 15 cent fall for 18 to 18.5  were somewhat negated by the odd specialty lot dearer  as the quantity of these types dwindles. The fickle marketing of superfine wool was no more evident than in Melbourne this week as three lots under 13 micron were all passed in for 8,000 and 9,000 cents! The strength of the market can bee seen in fleece prices as we sold just 10 lots for under 900 cents with 12 lots making 900 to 1,000 and all other 53  lots realising over 1,000 cents. In the six weeks since Easter, indicators have gained 80 cents for 20 and 24 microns,  130 cents for 19 and 23, 100 dearer for 21s with 19.5 up 175 and the stand out performer being 22 microns, climbing a massive 220 cents - incredible gains! Finer indicators in comparison are around 30 to 70 cents better.

Skirtings had a mixed week as the better style low vm lots under 5% tended dearer with a poorer selection of burrier types over 6% with an increased amount of cott and colour 20 cents lower on the opening day. All types closed fully firm on the final day.  Hopefully this may see the last of big volumes of inferior skirtings. Cardings continued their recovery as the MCI added 23 cents to its value with Locks putting on 35 cents to their value, stains up by 10 cents and crutchings 10 to 20 higher than last week’s quotes. The very small offering of Crossbreds left all indicators unchanged but crossbred lambs did seem to lift in value as some passed in lots from 2 weeks ago made some good gains.

So where to from here? It is hard to see when the market will peak as everyone with an opinion has a different number in mind which varies by hundreds of cents with buyers holding stock tipping further rises and buyers caught short with no stock talking it down. One thing for certain is that the volume is low and for the next 3 weeks national offerings are under 30,000 each week which will keep pressure on to fill orders. Next week will see Don Macdonald & Co offer their biggest catalogue to date with 1340 bales on offer early next Thursday - after NSW equal the State of Origin series at 1 all on Wednesday night!

AgRisk FDIC Indicative Quotes 10/06/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1420 cents (é22) compared with 03/06/11                                                1.0580 ê 0.0038 compared with 03/06/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1475 cents (é19) compared with 03/06/11