November 21, 2005

 

Australia's AWB trims estimated returns on benchmark wheat

 

 

Australia's monopoly wheat exporter AWB Ltd. (AWB.AU) Monday trimmed an estimate of returns from sales of its benchmark wheat type grown this crop year ending March 31, 2006.

 

As a result, AWB estimated its benchmark new crop Australian Premium White type wheat of 10 percent protein would return a gross A$191/tonne, free on board, down A$2/tonne from the company's previous review a week ago.

 

At the same time, the company lifted its estimate for hard wheats by the same amount, reflecting a widening of a price spread premium for higher protein wheats above 10 percent protein level, said Sarah Scales, general manager of AWB's international unit.

 

AWB's new crop Australian Prime Hard grade of 13 percent protein was estimated to return A$225.50/tonne on the back of increased global demand for premium hard wheats, she said in a statement.

 

The company also lifted its estimates for two durum grades by A$1/tonne, with the top grade now estimated to return A$232.50/tonne, which Scales said reflected a firm global market for the pasta-making wheat grade.

 

AWB sold wheat collectively on behalf of growers through a pooling system and attempted to estimate average returns from sales of all the wheat, which could take 18 months or more from harvest.

 

It deducted storage, handling, transportation and other costs before passing on returns to growers.

 

Stripping of new wheat crops usually finishes near the south coast around year-end, though late plantings particularly in south-eastern Australia could push the end of this harvest into the new year.

 

The company exported most wheat it received from growers, making it a major global supplier. It also traded in the domestic market.

 

AWB would next update its estimates of pool returns Nov 28.