November 28, 2005

Australia AWB holds estimated returns on benchmark wheat

Australia's monopoly wheat exporter AWB Ltd. (AWB.AU) Monday held unchanged an estimate of returns from sales of its benchmark wheat type grown this crop year ending March 31, 2006.

As a result, AWB estimates its benchmark new crop Australian Premium White type wheat of 10 percent protein would return a gross A$191 a tonne, free on board, unchanged from the previous review a week ago.

The company also held unchanged its estimates for all other grades of wheat.

The unchanged estimate reflected market conditions over the past week, with wheat futures slightly lower and the Australian currency trading in a narrow range, said Sarah Scales, general manager of AWB's international unit.

AWB sells wheat collectively on behalf of growers through a pooling system and estimates average returns from sales of all the wheat, which can take 18 months or more after harvest.

It deducts storage, handling, transportation and other costs before passing on returns to growers.

Stripping of new wheat crops has been gathering pace in northern areas, despite interruptions from rain, and usually finishes near the south coast around year-end, though late plantings particularly in south-eastern Australia could push the end of this harvest into the new year.

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

AWB would next update its estimates of pool returns Dec 5.