MELBOURNE, AUSTRALIA — The Australian Wheat Board (AWB) said on Sept. 12 that it will be offering A$10 a tonne early commitment premium pool (ECP) contracts to enable farmers to capture additional benefit from AWB’s 2012-13 season wheat pools, with the ECP contract available from Sept. 12 for a limited period.
AWB will also offer for the first time the AWB Production Advance program which will provide cash advances to farmers who commit grain to the AWB pool prior to harvest.
AWB’s Richard Williams said this is the second in our series of ECP pool contracts, after farmers showed good support for our first contract.
“In recent years farmers have appreciated the opportunity to lock in premiums and they know their commitment of tonnage benefits the pool management program: the early contracting of wheat enables our sales, commodity hedging and currency management activities to commence, which overall provides greater opportunity to the pools,” Williams said. “Following feedback from our farmer customers we have also launched a new pool payment product – AWB Production Advance – which provides cash flow prior to harvest to farmers who have committed to either of our early commitment premium programs.
“The AWB Production Advance program provides eligible farmers with access to cash of up to A$80 a tonne prior to harvest.”
AWB has updated its 2012-13 wheat pools estimated pool returns (EPRs) and provided further EPRs on a range of wheat grades.
Benchmark grade APW2 is A$360 a tonne (FOB, excl GST) and noodle grade ANW1 at A$365 a tonne (FOB, excl GST) in the Western pool, APW1 at A$355 a tonne (FOB, excl GST) in the Eastern pool and APW1 at A$350 (FOB, excl GST) in the South Australian pool.
“Overall wheat prices remain relatively high due to continued dryness in parts of Australia’s wheat belt, recent flooding in Argentina’s grain province, smaller crops in the Black Sea region and the impact of the US drought on corn production,” Williams said. “Globally wheat prices are being supported by feed grains due to the reduction in the US corn crop. However milling wheat prices have come under pressure due to an expected good quality Canadian crop and better than expected hard and spring wheat protein crops in the U.S.
“While there is a relatively tight global wheat balance sheet we expect milling wheat prices to remain relatively narrow to feed wheat prices in the coming months.
“The market is closely watching the Australian wheat crop prospects as continued dryness across parts of the wheat belt is less than ideal and a reduction in the crop would be supportive for domestic wheat prices.”
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