June 12, 2007

Australia AWB hikes estimated returns on 2007/08 wheat exports
 

Australian wheat exporter AWB Ltd. Tuesday lifted its estimate of gross returns from pooled export sales for wheat grown this crop year ending Mar 31, 2008, following a significant rally in world wheat cash prices in the past two weeks.

As a result, estimated gross returns from new crop benchmark Australian Premium White grade of 10.5 percent protein rose A$15/tonne to A$250-260/tonne, free on board basis, from a previous review two weeks earlier.

The estimated return for this grade grown in the 2006/07 crop year ending Mar 31, 2007, was held unchanged at a gross A$192.00/tonne, FOB, while the estimated return for 2006/07 Australian Prime Hard grade of 13 percent protein was held at A$250.00/tonne, Feed grade was held at A$197.50/tonne, and Australian Premium Durum grade of 13 percent protein was held at A$258.00/tonne.

David Johnston, acting general manager of AWB's pooled wheat sales programme, said the rally in world wheat prices reflected falling output in Russia and Ukraine and a delayed harvest for US hard red winter wheat.

The latest US Department of Agriculture report indicates world wheat production will be lower than previously thought, tightening global stocks, he said in a statement.

A stronger Australian currency has partially offset the impact of the rise in world wheat prices on Australian growers, he said.

Pool estimates for 2005/06 and 2006/07 pools were not changed as they remain well advanced in their price programmes and so are less susceptible to international price movements, 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 Jun 25.

A$1=US$0.8421 (Jun 12)