AUSTRALIAN WEEKLY MARKET REPORT

Comment

The market reacted strongly upward this week following a more optimistic outlook for the start to 2023. The rate that the market improved would certainly have caught most, if not all, by surprise. All merino types and descriptions were in demand. There was some cautious optimism to start the week with most of the attention focused on the increased volume for sale in the lead up to the Christmas recess. We were focused on supply, but it was the unexpected demand that dictated terms this week. The volume listed for the final two weeks was expected to put some pressure on the market. The result has been the complete opposite. It is worth noting that the types most impacted this week were lots with average quality Chinese specification. The best non mulesed descriptions for Italian customers were less affected.

AWEX Eastern Indicator compared with 02/12/2022

Eastern Indicator

Close: 1278

Change in % +4.4

Authentico Index Values

15 Micron

Close: 3428

Change in %: +3.4

16 Micron

Close: 2794

Change in %: +1.1

17 Micron

Close: 2392

Change in %: -0.5

18 Micron

Close: 2050

Change in %: +2.7

19 Micron

Close: 1809

Change in %:  +3.1

Authentico Indicator

Close: 2416

Change in %: +1.5

Forecast

Indent operators and some degree of market speculation has driven prices this week. A slightly more positive dialogue with regards to Covid restrictions coming out of China would have helped confidence. This, along with some currency fluctuations as a result of changing interest rates kick started the week.

Historically, we have to go back to 2009 before we find the last year that had a cheaper market in January. With the exception of January 2014 and 2015, which were firm, all other years have started with a dearer market in the first month. Maybe some speculation of a similar trend in 2023 influenced interest this week. No doubt though, we will continue with some volatility in the short to medium term before supply and demand start to stabilise into the New Year.

Nearly 50,000 bales are scheduled to be offered next week.

Auction offering – current week

Market	Sale	Offered	Sold	Passed In
North	S 23	10889	10185	6.5%
South	M 23	21155	19653	7.1%
West	F 23	6892	6374	7.5%

Auction offering – next week

Market	Sale	Sale days	Volume
North	S 24	T – W	14488
South	M 24	T – W – T	26543
West	F 24	T – W	8772

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