AWB wheat pool premium contract to close

by World Grain Staff
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MELBOURNE, AUSTRALIA — The Australian Wheat Board (AWB) said on Sept. 29 that it has reduced its estimated pool returns (EPRs) by between A$3 and A$15 per tonne for all wheat grades in its 2011-12 AWB pools, on the back of heavy falls in U.S. wheat futures over the past three weeks.

AWB’s 2011-12 EPRs for APW wheat is now A$296 a tonne and ANW noodle wheat is A$316 a tonne in the Western Pool. APW is A$292 a tonne in both the South Australian and Eastern Pools (FOB, excl. GST).

“Our wheat pool prices have reduced on the back of recent falls in U.S. wheat futures, however we have been able to offset the full impact of this fall due to our commodity hedging program that we commenced on the back of our early commitment contracts and also as a result of a softening Australian dollar,” AWB’s Jon White said,

On Sept. 30, AWB will close the second 2011-12 season wheat pool early commitment contracts in all remaining port zones. This contract offers farmers a A$10 a tonne premium above the final 2011-12 pool return, however farmers must commit by Sept. 30.

“With the recent softening in the Australian dollar we have also begun focusing on strategies that will support our estimated returns,” White said. “Since our last pool update in early September, the Australian dollar has fallen approximately 10% against the U.S. dollar however U.S. wheat futures have dropped approximately $50 a tonne which is impacting prices.

“We see wheat markets remaining volatile leading into harvest as international wheat prices continue to follow the U.S. corn market and the macro global economic sentiment remains uncertain. The Australian dollar will also likely continue to trade on the basis of daily positive/negative news due largely to outcomes of decisions on European debt reforms and whether or not the U.S. will announce a third round of quantitative easing,” he said.
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