Wk 44 28/04/2016. The AWEX EMI recovered some of the past fortnight’s losses closing on 1,241c up 24c.
The catalyst for the upward swing was the low inflation figures early in the week which sent the AUD into a 2% tail spin. The AUD fell from 77.64c to 75.77c with a slight rebound towards the close of the market. This reignited the exporter interest immediately, which kept upward pressure on the Merino MPG’s which rose by 30-50c clean by the close of market.
The increase offering of wool types with high VM content elevated the FNF wools, whilst the lower specified and heavy VM types were irregular throughout the week.
Skirtings under 3% VM followed the fleece trend whist the high VM lots experienced irregular support. Crossbred and carding indices remaining relatively static this week with the exception of the MC indices in Fremantle (+11c).
Whilst there was some evidence of a tail off towards the end of the closing day in Melbourne on the poorer types, the Futures products painted a better picture of June and July interest, especially with the expectation of lower offerings to come over that time.
The highlight of the week was the support for well grown prem shorn medium Merino fleece types (20µ, 67mm), with isolated lots making 20c over the full length fleece quotes.
Forward Selling opportunities for Spring are now 1,300-1,315c range for 21µ. At 1,300c or above which is a historically low Spring forward market discount (3-4%) I would be considering selling contracts for 20-50% of the clip.
Next week’s auctions sales offer 38,451 bales. I believe the AWEX EMI should be able to retain within 5-10c of the current levels if currency remains stable. Given the following offerings being 35,340 and 37,600 bales and the expected drop off in offerings due to low held stocks and projected reduced wool production forecast. ~ Marty Moses