MELBOURNE, AUSTRALIA — AWB announced on Sept. 7 that it has increased its estimated pool returns (EPRs) for the company’s 2009-10 wheat pools, capturing gains from the rising world wheat market many months after the crop was harvested.

The company also raised its forecast wheat pool returns for the 2010-11 season for the third month in a row, this time by a range of A$9 to A$22 a tonne depending on the quality.

It’s the second time in two months that AWB has raised its EPR for last season’s wheat and this latest revision would compute to A$23 million in increased grower equity.

Noodle wheat in AWB’s western pool is the standout performer, rising $18 a tonne to a new EPR for ANW1 of $268. Benchmark APW wheat grades are up by $6, with APW in the western pool now at $253 a tonne, and $251 a tonne (FOB, excl GST) in the eastern pool.

AWB General Manager Commodities Mitch Morison, said AWB had worked and reworked its marketing and hedging programs steadily over the period since harvest to generate improved value for its grower clients.

"Growers who commit grain to AWB’s pools expect us to work for their best advantage; it’s what they contract us to do for them and with over 2.7 million tonnes in our 2009-10 wheat pools it’s very important," Morison said. "Our early sales plan focused on selling the grades with the most relative value, which meant we held undervalued grades such as ANW and priced them later in the year when they represented stronger value.

"Similarly our sales program for ASW was relatively light in the early part of the year, especially from eastern Australia where we felt there should be greater potential for this grain. Then as crop problems emerged in the Black Sea region and there was less competition for lower grades, ASW from Australia became more valuable, so we’ve worked with that increased demand to push our ASW performance higher.

"Weather damage during the European harvest this year has caused buyers to seek out high protein in the later part of the 2009-10 campaign, which again we have been able to meet through our containerized export program for AH13 and AH14.

For 2010-11, AWB’s estimated pool return (EPR) for benchmark grade APW wheat in the Western Pool is now $353 a tonne, up $14, ANW1 noodle wheat is now $373 a tonne, up $19, and APW wheat in the Eastern Pool is up $12, to a new EPR of $345 a tonne (FOB, excl GST).

Morison is currently visiting customers in Asia and said the upward trend in prices was a very positive situation for Australian growers.

"The earliest part of the Australian winter crop harvest has commenced in central Queensland, which means the first of this season’s grain will soon be available," Morison said. "Production prospects in the rest of the wheatbelt from Queensland right around to South Australia have just received a boost from recent rains. Notwithstanding the unfortunate people suffering from localized flooding in some areas, it’s a great start to the spring growth period and the timing couldn’t have been much better from the market’s perspective.

"The market is aware that weather damage in northern Europe has reduced the supply of higher quality milling wheat in that region and drought has cut crops in Russia, Ukraine and Kazakhstan to the point that exports through the Black Sea will be very limited. This means there is very strong interest for Australian wheat, both to make up for the lost volume in the global trade and supply higher quality needs."