AWB forecasts 2012-13 wheat pool pricing

by World Grain Staff
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MELBOURNE, AUSTRALIA — The Australian Wheat Board (AWB) on Aug. 2 released its first price estimates for the 2012-13 AWB Wheat Pools, with benchmark grade APW2 forecast at A$350 a tonne (FOB, excl GST) and noodle grade ANW1 at A$355 a tonne (FOB, excl GST) in the Western pool, APW1 at A$345 a tonne (FOB, excl GST) in the Eastern pool and APW1 at A$340 (FOB, excl GST) in the South Australian pool.

AWB also launched an early commitment premium (ECP) of A$15 a tonne to those farmers who make the early decision to contract into the 2012-13 AWB Wheat Pools, with the ECP contract available from Aug. 2 for a limited period.

AWB’s Richard Williams said the 2012-13 Estimated Pool Returns (EPR) are calculated with reference to the outlook for domestic and international market dynamics encompassing production, demand, stocks, price and currency.

“The current wheat market is characterized by high prices due to drought in the US corn belt and reduction in Black Sea crops,” Williams said.

With the global wheat supply and demand situation tightening we expect Australian wheat values to be well supported until we have a clearer picture of the actual production levels of Black Sea wheat crops, impact of Canadian deregulation on trade flows and production of our own crop.

“There still remains further risk in northern hemisphere spring wheat crops, and given a tight global balance sheet, harvest progress in winter wheat crops will be watched closely for any quality concerns.

“Australian weather during August and September will be critical for the global wheat market this season given reliance on Australia’s exportable surplus to meet global demand," he said.  

AWB will be offering an early commitment premium of A$15 a tonne to those farmers who make the earliest decision to sign up to AWB’s 2012-13 season wheat pools.

“The A$15 dollar a tonne premium represents the value we believe we can extract from our global footprint and insights, forward derivative and currency markets via structured hedge programs, and greater forward planning for logistics efficiency,” Williams said. “AWB’s relationship with Cargill has brought a renewed effort to open new markets and deliver premiums to Australian farmers.” 

“We will update our estimates regularly right through the production and marketing cycles of the 2012-13 season crop, which is generally a period of 18 months beginning today, so we are forecasting a long way forward,” Williams said.

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