WEEKLY MARKET REPORT

Week ending 3^rd June 2011

Northern Micron Indices Comparison: Source of information: AWEX

ARE WE HEADING FOR 1500?

It was a case of deja vu as the market was almost a carbon copy of last week. This was also the case in the fortnight before as two weeks of excellent gains earlier in May have now been followed up by two weeks of good gains. The EMI posted a 14 cent rise to sit at 1398 cents (tantalisingly close to the magical 1400 cent level). Finer indicators struggled to take any direction and finished basically unchanged except for 18 and 18.5 which were in buyers’ favour. The better style finer lots in Sydney and an excellent selection of Launceston stored wool saw these types close up to 30 cents higher due to Italian mills chasing these lots. Most of this week’s gains came from the middle microns where 19s lifted by 10 cents and 19.5 to 24s rose 15 to 25 cents regardless of style and, to a certain exten,t vm.  All descriptions sold to stronger competition under pressure from a supply squeeze that won’t go away any time soon. Medium wool seems to be the star of the show lately as 21s with mid to high 60s yield up to 4% vm are making in the low 900s - an incredible number! Also helping the market is the improving selection, clips are not as cotted or contain less colour as was the case a few weeks ago.

Once again skirtings followed the lead of the fleece room as the few lots of low vm types, especially in Melbourne, added up to 60 cents (most likely the Launceston wools). The burrier pieces and bellies in Sydney weren’t to be out-done as these lots now containing a lot less cott and colour than three weeks ago were pushed 20 cents higher. It may well seem that the worst of the selection is behind us and blending of good and inferior types is easier again as it was pre Easter. Cardings snapped a six week losing streak to push the MCI up 5 cents as locks and crutchings added 10 cents with stains unchanged. Crossbreds had a mixed week as losses on Wednesday did regain some ground on Thursday to finish the sale up to 5 cents cheaper.

Buyers purchasing strategies seem to have changed at the moment. The age old practice of booking up wool then beating each other up to buy at the right price has now been replaced with a” buy today and offer out tonight” pattern that is working to all parties’ expectations. With supply still the dictating factor, the selection on the improve and June futures trading at 1480 cents, 40 above the market, we could well see the EMI climb above 1400 cents. Don Macdonald & Co. will offer 870 bales first up on Thursday as part of just 22,000 bales between Sydney and Melbourne with Fremantle having a week’s recess.                     

AgRisk FDIC Indicative Quotes 03/06/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1398 cents (é14) compared with 26/05/11                            1.0618 é 0.0034 compared with 26/05/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1456 cents (é12) compared with 26/05/11

WEEKLY MARKET REPORT

Week ending 27^th May 2011

Northern Micron Indices Comparison: Source of information: AWEX

CLOSING IN ON A RECORD HIGH

Another rise in the wool market this week, albeit a small one, as the EMI added 20 cents compared to last week’s 40 cent jump. The EMI now is at 1384 cents, just a hair’s breadth away from the late March high of 1388 cents. For the first time since 1988 all three selling centres have 21 microns above 1400 cents clean - a great statistic.  AWEX failed to find any increases in the finer microns to leave 18.5 and finer unchanged. The medium types added to their values of previous weeks with 19, 19.5 and 23s gaining around 10 cents with 20 to 22 microns posting gains of 20 to 30 cents. With the national weekly offering now well under 40,000 bales for the foreseeable future, pressure was on buyers as competition for the “straight’” types (of which volumes have shrunk) heats up as cott and coloured types still outweigh the better lots on offer - although the degree of faults seems to be less and less as the weeks go by as sheep being shorn now aren’t as cotty or coloured as clips shorn pre Easter. Sheep shorn now weren’t as badly affected  by water due to their shorter staple length late last year as were sheep with longer wool that were shorn earlier this year.

Skirtings followed the lead of the fleece room as low vm and better style types were 50 to 60 cents higher with higher vm pieces adding up to 30 cents mainly due to a lower prevalence of cott, colour and jowl in clips now on offer. Oddments, however, bucked the rising trend after a modest gain on the opening day, lost 14 cents on Thursday and now a run of 6 weeks of losses in a row after reaching a high of 850 cents in early April. Crossbreds, like merino fleece and skirtings, also had a positive tone recording 15 to 25 cent rises by the close of sales on Thursday.

Even though the market was a bit subdued when compared to the two previous weeks, futures trading at 1440 cents for June coupled with an improving selection  and weekly offerings  averaging  just 31,000 bales for the next 3 weeks and with a relatively stable $AUD we could see the EMI crack the 1400 cent barrier. This would be an incredible achievement if this milestone were reached. Certainly the lack of supply will dictate market movement more than any other factor.  Next week will see Don MacDonald & Company offer 820 bales with 36,000 on offer nationally.

AgRisk FDIC Indicative Quotes 27/05/11

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1384 cents (é20) compared with 19/05/11                            1.0584 ê 0.0077 compared with 19/05/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1444 cents (é15) compared with 19/05/11

WEEKLY MARKET REPORT

Week ending 20^th May 2011

Northern Micron Indices Comparison: Source of information: AWEX

MARKET CONTINUES THE  RECOVERY

Another good week for the market as looming tight supplies and a relatively stable exchange rate contributed to the AWEX EMI adding 41 cents to sit at 1364 cents. Only the finer end, under 17 micron and Merino Cardings saw little movement or a cheaper trend. The EMI is fast approaching the peak of mid-March of 1388 cents with 19 to 22 micron indicators  now at their highest level and finer types not far off their peaks of the Newcastle sale held in early March. Rises of 30 to 90 cents across all indicators had buyers scurrying to secure quantity with the price gap between good lots and cotted and coloured fleece lines widening with the odd line of better style fleece up to 100 cents dearer.  It was pleasing however to see well grown bright burry wools also rally in line with the F/NF types.

 History was made on Thursday as we sold the highest price lot in Australia, Luke sold his highest priced lot ever (Don’s now envious that he didn’t attend the sale) and more than likely, the highest priced 20.3 micron ever sold at auction anywhere around the globe. This 201 kg bale made 6,200 cents greasy or 9,524 cents clean. The bale was generously purchased by Modiano Australia. The wool was sourced from rams sold by Tony and Penny Inder at their Avondale ram sale, gratefully donated by the ram buyers.  Tony shore the rams himself and all proceeds ($12,462) will go to REDEKITE, an organisation supporting children through cancer. This is held in conjunction with the Ballimore Head Shave to be held this Sunday at the Ballimore Pub. More info is at swalker@redkite.org.au or inder13@ipstarmail.com.au 

Merino skirting’s had a mixed week with lots containing low vm and little cot and colour maintaining good to dearer levels, and as has been the case for a good while, lots with heavy cot and colour easing in price.  Carding’s lost ground on both days with the MCI dropping 20 cents, the 5^th weekly drop in a row contributing to the highest pass in rate of this section of the market in 7 months. Crossbreds lifted in value with the finer end (26 to 28’s) up by 20 cents and the 30 and 32 micron indicators 10 to 15 dearer.   

In other news Don Macdonald & Co are pleased to announce that Ian Sharp (formerly Elders NSW Technical Manager) will be joining the team adding considerable knowledge and experience built from almost 40 years as a wool broker. Ian will be based at our Yennora office, valuing and auctioneering.

Don Macdonald & Co will offer 792 bales next Thursday with 33,495 to be offered nationally.

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1364 cents (é41) compared with 12/05/11                            1.0661 ê 0.0118 compared with 12/05/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1429 cents (é45) compared with 12/05/11

Week ending 13^th May  2011

Northern Micron Indices Comparison: Source of information: AWEX

MARKET STAGES A RECOVERY

The recovery of last Thursday kept going as the market has clawed back some of the ground lost before Easter. The EMI added 17 cents to now sit at 1327 cents. Predictions of a cheaper market by as much 40 cents for “off style” types early in the week were off the mark.  The change in sentiment actually came from the annual IWTO conference being held in Hangzhou, China. At the dinner held on Tuesday night, hosted by the Chinese Wool and Textile Association, reference to supply of wool staying at these levels (or even slightly lower) led to a stampede of delegates to ring their agents to book up wool post–haste. This frenzy of business led to the market  adding 10 to 25 cents for all indicators out to 23 micron on Wednesday - this despite the exchange rate climbing from under 107 cents last Friday to over 108 cents early this week. Thursday’s market continued to rise to the tune of 10 to 20 cents for 19.5 and broader while finer types held their ground. As is always the case, discounts for colour, cott and vm shrunk noticeably which benefitted us greatly as just 6 out of 88 fleece lots were under 2% vm with a good number of lots containing reasonable amounts of cot and colour of which most cleared to the trade. By week’s end rises of 15 to 45 cents were the norm for most indicators leaving the EMI 51.2% higher than the same week 12 months ago. The highlight of the week was the sale of 2 bales of 1PP a/c The Wool Factory from Horsham in Victoria, with both bales achieving a price of 20,000 cents. One of their other bales bought 15,000 cents with the 3 bales averaging 12.1 micron, 0.1 vm, 75%, 76mm and 40nkt. G Schneider secured these 3 bales, with one bid apparently, for knitting and weaving in Biealla, Italy.

Skirtings had mixed results with the heavy-fault and cotted types continuing to slip in price while selected lots of finer types with low vm gained as much as 50 cents. Some lots with slight cot and heavy vm, up to 15% sold to a dearer trend as well. Cardings hung on well until late on Thursday when locks and stains lost 10 cents. Crossbreds struggled to move in any direction with the exception of some better style 29 and 30 micron lots which were quoted 10 cents up on last week’s levels.

Predictions of a solid market for the immediate future seems to be the talk on the showfloor as weekly quantities fall to around 40,000 bales, with Fremantle starting a series of one day sales this week. As one buyer said this morning, lack of supply will keep pressure on buyers not currency movements. One can only hope this will be the case for sometime. The national offering is 40,000 next week with our catalogue numbering 700 bales with an unchanged to dearer market anticipated.

Agrisk – CBA Wool Futures Mid-Point Quotes 06/05/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1323 cents (é17) compared with 05/05/11                            1.0618 ê 0.0118 compared with 05/05/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1384 cents (é15) compared with 05/05/11

WEEKLY MARKET REPORT

Week Ending 6^th May  2011

Northern Micron Indices Comparison: Source of information: AWEX

THE BEGINNING OF A NEW ERA

Wool sales resumed this week after a short recess and the highlight for us was offering the first catalogue under the Don Macdonald & Co banner. Sydney held a two day sale offering a total of 12,756 bales with our sale being on Wednesday with 597 bales for sale. The market understandably opened cheaper against a dollar which was close to 5 cents higher than the pre-Easter sale and Melbourne on Tuesday saw falls of 30-40 cents for the medium types and up to 50 cents for the finer end. Sydney opened unchanged on Melbourne and firmed as the day progressed which was good for us as we sold late on the day. The dollar eased further as the week went on and Thursday responded positively with some categories posting gains above the previous sale close.

Our sale was well attended by growers and friends with the added interest of a bottle of Penfolds Grange Hermitage being offered to the buyer of the top price for the catalogue. Of the possible two lots which we would have expected to make top price, the first lot sold 140 cents clean above the next lot of similar micron for the day. The second lot, belonging to KN & MM Foran, Gilgandra, sold after intense competition to Scott Sealey of Viterra - 100 cents above the best quote for any 17.0 micron  ranging lot for the week. The premium paid for these two lots amounted to close to $3000. The $520 paid for the Grange turned out to be a good investment.

The sale averaged $1460 a bale across all types with the only lines to struggle being either poorly prepared clips or cast lines showing heavy colour and cott. As the weeks progress and weekly offerings reduce we expect that competition for supply should keep the market on a firm footing.

Next week there will be about 10,500 bales in Sydney with Don Macdonald & Co offering close to 900 bales.

Agrisk – CBA Wool Futures Mid-Point Quotes 06/05/2011

MAJOR AUCTION BUYERS (Bales)

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

                Eastern 1306 cents (-19) compared with 22/04/11                              1.073 ↑ 0.021 compared with 22/04/11

                Northern Market Indicators (AUD cents/kg clean)

                Northern 1369 cents (-19) compared with 22/04/11