August 5, 2008

Quality issues help support wheat prices  

Global wheat prices are holding firm as a result of quality issues in some Northern Hemisphere crops, David Johnson, general manager of Australian exporter AWB Ltd. (AWB.AU), said Monday (Aug 4, 2008)

"Wheat quality continues to deteriorate in the Ukraine and there is some concern regarding quality with the Russian wheat harvest," he said in a statement.

Johnson was commenting as AWB held unchanged its estimate of returns from collective export sales pools for a crop harvested late in 2007. Most of the wheat consigned by growers to the pool has been priced and allocated to international markets.

AWB estimates the gross return on its number 1 pool for 2007 benchmark Australian Premium White grade of 10.5 percent protein was unchanged at AUS$418 per tonne, FOB, while Australian Prime Hard grade of 13 percent protein was held at AUS$433/tonne, Australian Premium Durum was held unchanged at AUS$587/tonne as was Feed grade, at AUS$350/tonne.

Despite reduced estimated returns on 2007 crop benchmark wheat from AUS$444/tonne on March 17, the price remains well above a mid-November level of A$385/tonne.

AWB, the majority exporter of Australia's 2007 wheat harvest, pools returns from its collective export wheat sales and deducts costs before paying growers.

The next pool estimate update is scheduled for August 18.