Wk 22 01/12/2016. The AWEX EMI continued its bullish run at Auction Sales in Australia this week closing at 1378c and posting a new 5 year high. Currency exchange remained relatively stable this week which saw the EMI rise to 1021 (+ 17c) in USD.

The hero of the week was once again the Superfine and fine merino’s, posting up to 60c on top of the previous substantial rises, whilst the medium categories posting a meagre 5c rise. The recent renewed urgency to price basis from 18-21 micron reached the 300c mark, which must be encouraging signs given the 21MPG sits at the 97% band.

Skirtings followed the leader, posting similar rises to their fleece counterparts, with the best style and specified lots at time selling to extreme levels. Despite some irregularity in the merino cardings sector they also posted rises across all centres, however the northern MC indicator was the star performer, adding 21c for the week and within 8c of its 10- year high. And last but not least, the Crossbreds generally saw a better tone in the market this week after a prolonged downward spiral.

The word in the rooms is that the market for unclassed and unskirted crossbred lots have evaporated, in addition the market is experiencing larger numbers of crossbreds as shearing is finally catching up. This is supported by AWTA November bales sampled numbers being up by 21%, bringing the July to November bales sampled numbers to 152mkg +1.6%.

Next week’s national offering has increased 22% since last estimate. The increase is a predictable reaction to the positive market performance over the past fortnight. I believe this increase in selection will mean a slightly tougher market environment for next week’s offering especially any lots showing high VM or low staple strength and or cast qualities.

Forward markets opened with a wait and see approach after last week’s market spike. The previous trend was validated by late Tuesday and by Wednesday the Forwards were inching forward once again. Trades for 19 micron December 14th delivery hit 1625c whilst February ’17 traded 1585c and June ‘17 1555c. The 21 micron contracts for December 14th traded at 1420c whilst February ’17 achieved 1415 and June hit 1400c. These forward prices are extremely profitable, with a relatively flat forward curve and the increasing liquidity is extremely encouraging. Fingers crossed that this market can hold within few percent of the current levels heading into the break. ~ Marty Moses

market-report (PDF)

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