April 27, 2004

 

 

Australia AWB Lifts Estimated Returns On Benchmark Wheat
 

With regards to sales of its benchmark wheat type to be grown this crop year ending March 31, 2005, Australia's monopoly wheat exporter AWB Ltd. lifted its estimate of returns late on Monday.

 

As a result, AWB estimates its benchmark new crop Australian Premium White type wheat of 10% protein will return in a range of A$205 to A$215 a metric ton free on board, and exclusive of a 10% goods and services tax, up A$5 from a previous estimate.

 

The company did not adjust its estimate of returns from collective sales of old crop benchmark wheat, which remains at A$224/ton. Estimates for old crop durum grades were slightly lowered.

 

Australia's new wheat crop is usually planted in May and June. AWB issues early estimates of new crop returns to inform growers ahead of planting decisions.

 

Sarah Scales, AWB's general manager of its national sales pool, said U.S. wheat futures fell a little in the past two weeks, although AWB "had captured some good recent commodity hedging opportunities."

 

The new crop estimate of returns has also been positively influenced by a stronger U.S. dollar and a subsequent weakening of the Australian dollar, she said.

 

The global wheat market remains focused on the progress of northern hemisphere crops, particularly a U.S. corn crop now being planted.

 

Scales also said market fundamentals for durum and bread wheat remain vastly different.

 

"While we are still looking at a tight global stocks situation for bread wheat, the production outlook for durum wheat has lifted, with large stocks expected in key durum areas of Europe and North Africa," she said in a statement.

 

"At the same time, demand for old crop durum has also flattened, and this is reflected in the reduction of old season durum estimates," she added.

 

AWB sells wheat collectively through a pooling system on behalf of growers. It further attempts to estimate average returns from sales spread across the marketing year, which started Oct. 1.

 

Storage, handling, transportation and other costs are deducted before returns are passed to growers.

 

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

 

AWB will provide the next update on its estimates of pool returns on May 10.