September 23, 2008

Australian agribusiness AWB Ltd. (AWB.AU) unveiled its first estimate of prices for pooled sales of wheat from a harvest in coming months.

AWB said late Monday it estimates gross return on sales from its pool based in Western Australia for benchmark Australian Premium White grade of 10.5 percent protein at AUS$359 a tonne, FOB, the same estimate as noodle wheat, while the benchmark grade for the Eastern Australian pool is estimated to return AUS$356/tonne gross.

AWB's current estimate for the benchmark grade for pool sales of wheat from the 2007 harvest is AUS$418 a tonne. This pool has not been finalized yet.

Net prices paid to growers reflect deductions for costs such as storage, handling, transport, insurance, and selling costs.

Pool returns reflect estimated sales achieved, current international prices, US futures, value of the Australian dollar, and the impact of currency and commodity hedging programs, Mitch Morison, general manager of AWB's Australian commodity division, said in a statement.

AWB offers an early commitment premium of AUS$10/tonne for growers who commit their wheat to AWB's pools before Oct. 10.

Morison said he expects ongoing volatility for pool return estimates and grade spreads in the new Australian export marketing environment.