March 1, 2004

Australia AWB Holds Estimated Returns On Benchmark Wheat

Australia's monopoly wheat exporter AWB Ltd. Monday held unchanged its estimate of returns from sales of its benchmark wheat type grown this crop year ending March 31, 2004.
 
As a result, AWB's benchmark new crop Australian Premium White type wheat of 10% protein remains estimated to return A$224 a metric ton, free on board and exclusive of a 10% goods and services tax.
 
The company also didn't change its estimate of returns for its other pools.
 
Sarah Scales, AWB's general manager of its national sales pool, said U.S. wheat futures rallied quite strongly late last week following confirmation of Chinese wheat purchases from the U.S.
 
The market is closely monitoring potential further demand from China, so supply issues will likely become major drivers for price in coming months.
 
"We are really heading into a weather market now, and price direction will be more influenced by weather conditions and the subsequent progress of Northern Hemisphere crops," she said in a statement.
 
"Given the particularly tight world stocks situation, we are moving into this sort of market earlier than in previous years, and values are likely to be more sensitive to any major development on the supply side in the coming months," she said.
 
AWB sells wheat collectively on behalf of growers through a pooling system and attempts to estimate average returns from sales spread across the marketing year, which started Oct. 1.
 
It deducts storage, handling, transportation and other costs before passing on returns to growers.
 
The company exports most wheat it receives from growers, making it a major global supplier, and also trades in the domestic market.
 
AWB will next update its estimates of pool returns March 15.