Week 52: 29/06/2017 The AWEX EMI fell 26c to close the week on 1507c at auction sales in Australia this week. In the last sale for this financial year, there were a number of factors contributing to the market sentiment. The first possibility is the unfavourable currency exchange rate with the AUD gaining 1c against the USD with the EMI falling only a mere 4c. The second may be the announcement of next week’s sale (the first of the 17-18 fiscal year of 51,718 bales).
Despite these factors, the losses recorded were relatively evenly spread across the merino MPG’s between 30 and 45c in the northern markets and 33 to 75c in the southern markets, as the centre realigned from last week’s result.
In the fleece categories, FNF (Low VM) lots were keenly sought after as were the best style and specified lots. Discounts for poor style, high VM and poorly specified once again increased on last week’s levels. Skirtings were well supported for the week and the best lots saw slight increases on last week’s bullish levels.
Crossbred prices were in conflict with the 26-28 lots closing slightly cheaper and the 30 micron and coarser lots gaining some ground whilst merino cardings remained relatively unchanged with the exception of the MCI in the south which fell 18c.
Michael Avery from Southern Aurora reports the forward markets finished the financial year with a whimper. Record levels paid last week did little to attract interest from growers. Only 15t traded in the new season albeit at historically good prices. In the 21.0 micron August traded at 1490 and September 1430.
Exporters were hesitant to get aggressive further out as demand in the spring is being constricted by the current price spot price. Bidding remained over 1400c through to end October on the 21 micron all week, even as the spot auction fell 30 to 50 cents to the close. This drew scant interest from growers. We expect exporter interest to be maintained around the 1450 to 1470 level in August. This is about 5% under cash (1545). This shows a degree of confidence that the fall in prices this week at auction (around 2.5%) will steady and hopefully bring demand. Concern for the spring centres around the demand being sufficient to maintain prices at historical highs when faced with the seasonally increased supply.
Regardless of the slight fall for the week the EMI closed the season just 2.8% below the season and all-time high. The table and graph attached depict the interesting story of the individual MPG’s. – Marty Moses
Market Report (PDF)