April 20, 2012

Cargill's AWB sells wheat for livestock to Middle East, Thailand

In the past month, Australia-based wheat exporter AWB Ltd., a unit of Cargill Inc., has sold various grades of milling and feed wheat for livestock to Sudan, United Arab Emirates, Qatar, Yemen and Thailand, it said Thursday (Apr 19).

AWB's Richard Williams said pricing and sales of Australian wheat are progressing well in what is a challenging global market, reflecting large Australian inventories and favourable seasonal conditions for Northern Hemisphere crops, which are pressuring Australian wheat values.

"Positive growing conditions in the Northern Hemisphere for wheat and corn crops continue to weigh heavily on international wheat prices, and as long as the weather conditions remain favourable, the ability of grain markets to rally at this point seems limited," he said in a statement.

Williams was commenting as AWB made its first payments, totalling AUD110 million (US$114 million), to growers who consigned wheat to AWB's collective sales pools for wheat from the 2011-12 crop, a distribution that represents 22-27% of current estimated pool returns.

The distribution reflects the level of actual wheat shipments, most of which have gone to customers in Africa, the Middle East and throughout the Asian and Pacific regions, he said without providing further details.

The company held unchanged its estimated returns on pooled sales of benchmark Australian Premium White grade wheat of 10.5% protein in the eastern pool at AUD258 (US$267) a tonne, free on board, while the estimated return on Australian Prime Hard grade one was unchanged at AUD360 (US$372) per tonne.