Steady is good

The Eastern Market Indicator dropped 6¢ or 0.5% for the week, to close at 1285¢.

The AUD was slightly softer down to US$0.761 which saw the EMI in USD terms finish 6 cents weaker at 979¢ or 0.6% down on last week. In contrast, Fremantle, rose slightly for the week gaining 15¢, settling at 1313¢.

A general air of confidence prevailed, following the 130-cent lift for the EMI in January, which AWEX reported was the largest January rise in a decade; the steady result this week will be considered a good outcome.

Last week Mecardo reported that Fremantle selling last had lost much of the momentum and demand of earlier in the week and the market fell. This week Fremantle recovered that and posted 20 to 50 cent rises for its 18 to 21 MPG types.

Crossbred types continued recent upward movements with another rise, although the 32 MPG was marginally cheaper.

Cardings were cheaper in all centres, although it was only 3 cents lower in Melbourne, while Sydney was down 8 and Fremantle off 38 cents.

AWEX reported that 45,126 bales were offered, 5.4% withdrawn and 9.3% passed-in, resulting in 40,924 bales sold. This resulted in another weekly lift in sales, up 3,382 on last week. The last 4 weeks have averaged 41k bales per week, a good indicator of improving demand. The average clearance season to date continues to lift, the seasons average now up to 30,413 bales per week. Comparatively, last season the weekly average clearance was 26,500 bales.

This week on Mecardo,  Andrew Woods looked at seasonal patterns in the 21-micron category. There is a high negative correlation between supply and price for the 21-micron category in seasonal pattern terms. It is much less so in Australian dollar terms although, the correlation is quite marked in the spring and non-existent in the second half of the season. The seasonal price pattern in the 21 MPG looks to be primarily driven by supply, with demand a smaller secondary influence.