May 2, 2011

AWB trims estimated returns on milling, feed wheat exports

In view of declining world wheat prices and a strong Australian dollar, Australian wheat exporter AWB Ltd. has cut its estimated returns on collective or pooled sales of most grades of wheat from the 2010-11 crop.

Global corn and wheat markets fell sharply last week on the back of improved weather conditions in key northern hemisphere production regions, AWB General Manager Commodities Mitch Morison said in a statement.

There are significant quantities of feed wheat available and despite a wide price spread to corn, "consumers aren't switching significant feed grain demand to wheat," he said.

The Australian currency hit fresh 29-year highs against the US unit last week, rising above US$1.09 after trading at US$0.81 in June 2010 and around parity for most of the calendar first quarter

AWB trimmed its estimated return on pooled sales of benchmark Australian Premium White grade wheat in the eastern pool by AUD10 (US$10.96) to AUD352 (US$386) a tonne, free on board, while Feed 1 grade also fell AUD10 to AUD267/tonne (US$293), free on board, from a previous review on April 12.

The estimated return for APW has posted spectacular gains since the first estimate of AUD244 (US$267) was issued during plantings in mid-May.