AWB 2010-11 wheat pool: Milling wheat unchanged

by World Grain Staff
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MELBOURNE, AUSTRALIA — AWB’s 2010-11 season estimated pool returns (EPRs) for wheat are unchanged for milling wheat although Australian domestic prices have fallen relative to international wheat markets, the AWB said on Jan. 5.

AWB’s estimated pool return (EPR) for benchmark APW wheat in the eastern pool is steady on A$358 a tonne, while FED1 is up A$2 to A$269 a tonne and stockfeed SFW1 is down A$4 to A$279 a tonne. In AWB’s western pool ANW1 noodle wheat is A$510 a tonne, while APW wheat is A$370 a tonne (FOB, excl GST).

AWB General Manager Commodities Mitch Morison said Australian wheat values had declined in recent weeks as fine weather in south-eastern Australia had enabled the harvest to proceed strongly.

“Prior to Christmas the harvest delays had caused quite a run-up in Australian cash prices, to well above international values, but with growers now having much more grain available and aggressively pursuing sales, prices have come under pressure,” he said. “This harvest pressure particularly applies to stockfeed grades, as with the rapid progress of harvest in recent weeks the volume of feed wheat growers are seeking to sell has increased rapidly.

“This volatility is only evident in cash prices; one of the great advantages AWB’s pools is that with a focus on the much wider world market we manage around this situation, and look over a longer timeframe which is why our EPRs show only minor changes and provide growers with a strong marketing choice.

“Another feature of our pools is the way grade spreads move as the quality profile develops, evidenced this week as harvest receivals of FED1 are showing much better test weight than expected, allowing the EPR for this grade to lift closer to the higher-specification stockfeed grades such as SFW1.”

In response to grower interest, the eastern pool will also receiving FED2 wheat, where segregated, at GrainFlow and Viterra sites.

“Durum EPRs have softened due to weaker international interest for Australian durum, however we continue to field enquiries from African customers who are seeking supplies of lower quality grain, albeit at lower values,” Morison said. “Milling and stockfeed wheats are both in demand although the volume and logistics challenges for eastern Australia mean it is a very competitive market.”
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