April 24, 2006

 

Australia's AWB holds estimates on benchmark wheat returns

 

 

Australia's monopoly wheat exporter AWB Ltd Monday held its estimate of returns from sales of its benchmark wheat type that will be grown this coming crop year, ending Mar 31, 2007.

 

AWB estimates its new crop of benchmark Australian Premium White type wheat of 10 percent protein will have returns between A$200-A$210 a tonne (US$149.2 ¨C US$156.7), FOB, gross, unchanged from a review two weeks ago.

 

However, it cut an estimate of returns on its new crop of premium Durum grade by A$5 a tonne to A$220-A$230/tonne (US$164.2- US$171.6/tonne).

 

The company also held its estimate of returns on benchmark old crop wheat at A$189 a tonne (US$141.1).

 

AWB's old crop Australian Prime Hard grade of 13 percent protein still is estimated to return A$226.50 a tonne (US$169.0), while Australian premium Durum still is estimated to return A$235.50/tonnne ( US$175.8/tonne).

 

Sarah Scales, general manager of AWB's international unit, said the cut to its estimate for the new crop of Durum reflected the impact of a rise in the value of the Australian dollar and flat global Durum prices due to large inventories in Canada and the United States.

 

"The rising Australian dollar has largely canceled out any gains we might have seen in wheat futures for major Australian milling grades," she said in a statement.

 

Weather conditions will continue to prove critical for most of the northern hemisphere crop in coming weeks, so the global market will remain quite volatile, she said.

 

Scales also said AWB has almost completed sales from the 2004-05 pool with payments to participants expected to be made late next week.

 

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. It also trades in the domestic market.

 

AWB will next update its estimates of pool returns on May 8.