Wk 13/16: 29/09/2016 The AWEX EMI posted a small recovery, rising 3c to close the week at 1,290c at auction sales in Australia this week.

With just 34,000 bales on offer this week, it was the finer fleece types that stole the show, posting increases of 30-50c at closing. Conversely the 0.5% increase in the AUD put further downward pressure on the medium merino types which resulted in falls ranging from 5-25c, with the greatest losses posted in the Southern markets, (in a week where the Victorians moved their sale forward to accommodate the AFL Grand Final Public Holiday, thankfully there is a Victorian side in the GF).

Up until early September, all merino MPG’s shared market trends of the week. However in the recent four weeks the superfine/fine and medium MPG’s have diverged, resulting in a firming of the finer MPGS over the past month, whilst losses approaching 100c have been posted the medium categories in the same time frame. It was hard to find any negative signs for this week’s skirting selection, with very strong support driving these types up to 20c dearer this week. This trend was shared by the 28 and coarser crossbred categories which are now showing strong signs of a recovery from its August/September price slump.

Cardings were well supported and posted solid rises ranging from 1-7c.

Mike Avery from Southern Aurora Wool reports “a mixed bag for both the forwards and the spot auction”. Following a week where we saw the largest falls for three months, the market looked to find a level. Buyers put a floor in the Forwards early in the week bidding the 21.0 contract around cash (1,380) out to the end of the year and 1,330 to 1,350 for the New Year. This failed to attract much interest from growers with the peak forward levels of 1,420 to 1,450 pre-Christmas and 1,400 in the New Year still fresh in their minds.

Current Forward levels indicate that buyers are looking for confirmation of support around the spot cash levels. Demand signals remain muted which could translate to further volatility as we move into the higher supply period. This volatility has been evident not only in market direction but between micron groups. The question for growers and exporters alike moving through this potentially volatile period is how to judge the value of certainty over the fear of missed opportunity.”  A big thanks to Mike giving up his time to attend the  Moses & Son Henty Field Days stand to impart his knowledge to the large number of producers that attended.

Next week Australia offers 39,197 bales and with more rain across the western, southern and eastern states the prolonging shearing and deliveries of the clip. The promise of serious offerings seems to be getting pushed further and further towards November. ~ Marty Moses

market-report-s13 (PDF)