March 26, 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 for all grades of wheat grown this crop year ending Mar 31, but lowered its estimate for estimated returns from the next crop.

As a result, benchmark Australian Premium White grade of 10.5 percent protein grown this crop year ending Mar 31 is now estimated to return a gross A$237.50/tonne (about US$191.13/tonne), FOB, unchanged from a review 13 days ago.

Australian Prime Hard grade of 13 percent protein was also unchanged at A$253.00/tonne, as was Feed grade at A$200.50/tonne. Australian Premium Durum grade of 13 percent protein was held unchanged at A$261.00/tonne.

The forecast range for Australian Premium White grade grown next crop year was cut A$5/tonne to a range of A$240-250/tonne.

David Johnston, acting general manager of AWB's collective export sales pool, attributed the downgrade in estimated returns for the next crop to a recent rally in the Australian currency against the US dollar.

Looking ahead, Johnson said the market eagerly awaits the issue Friday by the US Department of Agriculture of a monthly report that contains the first forecasts for 2007-08 US corn acreage and a review of corn stocks.

"Wheat crops continue to develop well in the northern hemisphere with the US Hard Red Wheat, European Union and Black Sea crops progressing well, which is placing further pressure on pricing," he said in a statement.

AWB pools returns from its export wheat sales and deducts costs before paying producers. Sales from a pool can continue for up to 18 months after harvest, depending on production and demand.

Johnston said the 2005-06 pool would be extended into 2007 to enable AWB to manage supply, given the limited amount of low protein wheat and Australian Hard grade available for key markets.

The next pool estimate update is scheduled for Mar 26.