September 17, 2007

Australia's AWB expects record-high returns for upcoming wheat crop

Australian wheat exporter AWB Ltd. (AWB.AU) Monday (Sep 17) issued fresh record high estimates for pool returns for various grades of the crop to be harvested in the coming months, reflecting a strong global market, high prices and low world stocks.

The estimated gross return on new crop benchmark Australian Premium White grade of 10.5 percent protein was put at AUS$340 a tonne, FOB, up AUS$26 from a review two weeks ago and up from an unchanged estimated return from the 2006-07 crop of AUS$234.50.

The estimated gross return for new crop Australian Premium Durum was put at AUS$400/ton, up AUS$10 from two weeks ago, while Australian Prime Hard grade of 13 percent protein is estimated to return AUS$348/ton, FOB, up AUS$20 from two weeks ago, and new crop feed grade is estimated to return AUS$270/ton, up AUS$36.

All estimates of returns from the old crops were held unchanged.

"The...increase takes into account the appreciating (Australian) dollar over the last fortnight and reflects both the current high US wheat futures and the anticipated reduction in world wheat prices in mid-2008 due to a potential increase in wheat plantings in Northern Hemisphere crops," the company reported in a statement.

AWB, the top wheat 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 Oct. 1