December 5, 2005

 

Australia's AWB holds estimated returns on benchmark wheat

 

 

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

 

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

 

At the same time, AWB lifted its estimate for harder wheats by A$1-3/tonne, and lifted its estimates for three durum grades by A$2/tonne.

 

AWB's new crop Australian Prime Hard grade of 13 percent protein is estimated to return A$228.50/tonne, up A$3/tonne, while estimated returns for Australian premium Durum rose A$2/tonne to A$234.50/tonne.

 

Changes to the estimates reflected the impact of an increase in the value of the Australian currency and a widening global price spread between hard and soft wheats, said Sarah Scales, general manager of AWB's international unit.

 

There is increasing global demand for high protein hard wheat, she said in a statement.

 

She told of a strong sales programme for the old crop that, along with currency hedging, has protected and enhanced the value of the old crop sales pools.

 

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.

 

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

 

The company exports most wheat it receives from growers, making it a major global supplier. It also trades in the domestic market.

 

AWB would next update its estimates of pool returns Dec 12.