February 13, 2006

 

Australia's AWB expects higher wheat prices in 2006-07
 

 

Australia's monopoly wheat exporter AWB Monday said the price for its benchmark wheat grown next crop year will rise from current levels.

 

AWB forecasts its benchmark new crop Australian Premium White type wheat of 10 percent protein grown next crop year will provide gross returns in the range of A$195-A$205 (US$143.8- US$151.2) a tonne, compared with a current estimate for the 2005-06 crop of A$192 (US$141) a tonne and an opening estimate for the 2005-06 crop a year ago that was A$25 (US$18.4) less.

 

David Johnson, manager of AWB's national sales pool, said the new crop estimates have benefited from reduced global stocks of hard wheat.

 

The market is looking very attractive with concerns over winter kill from extreme cold in Europe, Russia and Ukraine, he said.

 

In addition, all indications are pointing to a smaller crop in the US, with dry weather conditions for the southern wheat belt, he said in a statement.

 

The size and quality of northern hemisphere crops will remain key factors influencing price direction, he added.

 

AWB issued the forecast to enable growers to make important cropping decisions for the coming growing season, which usually starts in May, he said.

 

AWB sells wheat collectively on behalf of growers through a pooling system and attempts to estimate average returns from sales of all the wheat, which can take 18 months or more from harvest.

 

It deducts storage, handling, transportation and other costs before passing on returns to growers.

 

The company exports most of the wheat it receives from growers, making it a major global supplier.