May 14, 2007

 

Australia AWB holds estimated returns on wheat exports
 

 

Australian wheat exporter AWB Ltd. Monday held unchanged its estimate of gross returns from pooled export sales of all grades of wheat grown in the crop year ending Mar 31.

 

As a result, the benchmark Australian Premium White grade of 10.5 percent protein is still estimated to return a gross A$234.50/tonne (about US$195.35/tonne), FOB, unchanged from a review two weeks ago.

 

The Australian Prime Hard grade of 13 percent protein was also held at A$250.00/tonne, as was Feed grade at A$197.50/tonne and Australian Premium Durum grade of 13 percent protein at A$258.00/tonne.

 

The forecast range for Australian Premium White grade grown this crop year was held in a range A$230-240/tonne.

 

David Johnston, acting general manager of AWB's pooled wheat sales programme, said a world supply-and-demand report issued by the US Department of Agriculture on Friday showed that despite an expected increase in world wheat production in 2007/08, the global balance sheet will tighten again with stocks seen to fall further.

 

"This will be the lowest level since 1981/82, and stocks for 2006/07 are already forecast to be tight," he said in a statement.

 

The global market is already being driven by production risk in Europe, the former Soviet Union and Australia, with more rain needed in all these regions to assure crop size, he said.

 

Poor US weather, slower-than-average corn plantings and below-average crop condition for some grades of US wheat are also supporting the market, he said.

 

AWB, the majority exporter from Australia, pools returns from its export wheat sales and deducts costs before paying producers. Sales from a pool can continue for more than 18 months after harvest, depending on production and demand.

 

The next pool estimate update is scheduled for May 28.