Wk 30 25/01/2017. The AWEX EMI could not sustain its bullish run, closing on 1412c – down 22 c for the week at auction sales in Australia. The largest percentage of the downward correction took place on the opening day (Tuesday EMI -21c) and with the new market levels established, there was generally wider support for Wednesday’s offering.
Despite the meagre 1.5% downward movement, an above average 13% of the weekly offering was passed in, with the majority of the passed in lots being poorer style and specified lots which have been very well supported in the previous two sales.
The MPG movements were varied across the merino categories, with 5-10c falls from 16-17 MPG 20-25 on the 17.5-19 MPG’s and 30-48c falls on the 19.5 and coarser MPG’s. I am watching the basis between the 18 and 21 MPG widen week by week, which now rests on a basis of 475c.
Skirtings suffered a similar first sale day experience, however the best style and specified lots posted small gains on the last day of selling, whilst the low style and poorly specified lots continued to cheapen.
Cardings suffered small losses across all centres – falling between -1c to -13c for the week, and the poor old coarse crossbred MPG’s continued to erode their previous price levels by 20c, with no good news in sight.
Michael Avery reports another volatile week in the forwards markets as the physical auction took its expected correction. Fine wools continued to dominate interest, whilst prices in the 21.0 were more subdued. The 21.0 index has dipped 55 cents in the last two weeks and growers looking to hedge above 1400 into the latter part of the season finding demand hard to come by. Pleasingly, some buying demand has returned on the Crossbreds with 28.0 trading close to cash from March to June.
The key factors that may affect the market remain: supply, currency and continued demand; with the expected Chinese pause in trading activity for their lunar New Year this coming week. The next three week sale roster projects offerings of 42000-43000 bales, down considerably on the opening two weeks of sales in 2017. ~ Marty Moses
Market Report (PDF)