Wk 10 8/09/2016.  The AWEX EMI moved 15c lower closing on 1305c at Auction sales in Australia this week. The negative weekly movement was directly related to the surging value of the AUD with the USD, which appreciated by 1.37c. The currency disruption consequently resulted in the EMI appreciating 7c in US currency terms and now 1002 US cents (a 15 month high).

After a weaker opening on Tuesday for the NZ offering, the Australian catalogue of 41,832 bales was greeted with most MPG’s falling between 10-25c, this trend abated on Thursday with only small negative movements experienced. Exporters reported business was a little harder to execute, as the rising currency exchange seemed to interrupt the attention of the processors.

Despite this, the market for the fine and superfine, best style and measured lots continued to attract strong competition. The discount grew for the lots displaying lower staple strength and the broader microns. Skirtings displayed a more consistent level when compared with last week, however the offering had its first taste of muddy bellies in the catalogues which initially had difficulty finding a price level.

Comeback and broader crossbred MPG’s posted polar opposite results, with the 25 & 26 MPG’s remaining fully firm whilst the 28-30 MPG’s lost between 20-40c. Cardings were generally 5-10c weaker across the centres. Next week 38,231 bales are being offered

The forward markets reacted quickly to the rising AUD, with bidders thinning-out very early in the week, breaking of a period of strong support for the past fortnight. The initial result was a 30c drop in the bids and predictably very few trade executed. By the end of the week there was some renewed interest at this lower level as the buyers and sellers processed the underlying strengths, weaknesses and risks of this market. ~ Marty Moses

Market Report S10