April 23, 2012

AWB to remunerate US$113 million in 2011-12 wheat payments

The Australian Wheat Board (AWB) on April 19 said that it will make its first distribution of AUD110 million (US$113 million) net payment to pool participants in its 2011-12 season wheat pools.

AWB's Richard Williams said the 2011-12 wheat pools pricing and sales programme was progressing well in a challenging market due to large Australian wheat stocks and good weather conditions in the Northern Hemisphere continuing to place pressure on Australian wheat values.

"The large Australia wheat crop is being exporting at record pace with good demand for Australian wheat however prices are being pressured in some areas," Williams said.

The first distribution represents between 22% and 27% of the current estimated pool returns (EPRs) across all pools with 100% of early commitment premiums, 24% of quality payments, 100% of receival fees and 28% of estimated upcountry, freight and port costs applied to this payment.

"This distribution is reflective of the level of physical shipping from our pools with the majority of pooled wheat sold making its way to customers in Africa, Middle East and throughout the Asian and pacific regions," Williams said.

The majority of AWB 2011-12 season EPRs have remain unchanged however some higher protein grades have decrease AUD4 (US$4.12) to AUD$9 (US$9.26) a tonne due to a large supply of Australian protein wheat and ideal growing conditions in the US which could result in record yields.

AWB's 2011-12 EPRs for APW wheat remains at AUD263 (US$271) a tonne and ANW noodle wheat is AUD276 (US$284) a tonne in the WA Pool, APW is AUD257 (US$265) a tonne in the SA Pool and AUD258 (US$266) a tonne in the Eastern Pool (FOB, excl GST).

"Positive growing conditions in the Northern Hemisphere for wheat and corn crops continue to weigh heavily on international wheat prices and as long as the weather conditions remain favourable the ability of grain markets to rally at this point seems limited," Williams said. "Overall Australian wheat prices are holding up relative to US wheat values.

"In the past month we have made key sales to Sudan, Thailand, UAE, Qatar and Yemen of various grades of milling and feed wheat."