AWB will be offering an early commitment premium of A$15 a tonne to farmers who make the early decision to sign up to AWB’s 2011-12 season wheat pools, with the new contract available from July 11.
AWB also released its first estimates of wheat pool returns for the 2011-12 season, with benchmark grade APW2 wheat forecast at A$305 a tonne (FOB, Excl GST) and ANW1 noodle wheat at A$325 a tonne (FOB, Excl GST) in the Western Pool, APW1 wheat at A$290 a tonne (FOB, Excl GST) in the Eastern Pool and APW1 wheat at A$295 a tonne (FOB, Excl GST) in the South Australian Pool.
AWB’s Jon White said the estimated pool returns announced are reflective of Australian wheat values today combined with a forward outlook on wheat prices.
“With crop sowing programs completed across Australia’s wheat belt, farmers are now turning their mind to marketing this year’s crop, so estimates are timely at this stage,” White said.
AWB calculates its pool estimates with reference to international and domestic stock, production and price levels and its expectations around how the Australian dollar will perform, all of which impact grower returns.
“When we look at the market today, world wheat production and consumption are forecasted slightly higher than last year. However, the recent return of Russian export wheat is impacting world wheat prices,” White said.
“Concerns regarding the Northern Hemisphere wheat crop have dissipated and wheat production forecasts for the E.U. and Russia have increased along with an improving planting outlook for Canadian and U.S. These factors are increasing world export and trade supply without corresponding importer demand placing pressure on wheat prices. For the balance of 2011, the currency outlook for the Australian dollar remains supportive, which will continue to weigh heavily on Australian wheat prices.”
Regarding the 2011-12 wheat pools, AWB has acted on farmer feedback and has reintroduced the increment based quality payment system — Golden Rewards — for bin grades APW and better and continues to offer an ECP of A$15 a tonne to those farmers who commit early to the 2011-12 Pools Trust.