MELBOURNE, AUSTRALIA —AWB will close its A$10 a tonne early commitment premium (ECP) for its 2010-11 season wheat pool in the Mackay, Gladstone, Brisbane and Newcastle port zones on Sept. 17, the company announced Sept. 13.
AWB General Manager Commodities Mitch Morison said with the spring outlook boosted by recent rains in eastern and southern Australia, wheat growers were showing increased enthusiasm for marketing and phone traffic was growing.
"There are always people who want to keep their options open on offers like this until the last minute, but that risks being unable to get through and missing A$10 a tonne; I’d encourage anyone who wants to collect our early commitment premium to call either their local AWB grain marketer or our grower services hotline without delay," Morison said. "The early commitment program is an important part of our pool management strategy, with substantial volumes already contracted.
"We are actively working to extract value from the market for that commitment, through early logistical planning, ability to sell into an inverted market and managing significant volatility in both foreign currency and wheat commodity markets.
"We have commenced physical pricing, building on the substantial requirement for Australian wheat to satisfy the global balance sheet. That said, we are avoiding aggressively hedging commodity price in this pool, as we see global wheat values well supported in the long term and are using options to create protection in the event of a retracement.
"Logistics on the east coast will be crucial this year, so every tonne we have committed early enables us to do more planning for shipping, rail and road capacity to generate optimal utilization of the network, thereby minimizing storage, handling and transport costs for pool participants."
AWB’s ECP offer remains open in all other port zones, however can close at any time as AWB reviews its progress against targeted volumes. Key features of the ECP offer are a A$10 a tonne premium to the final pool return, a maximum washout fee on contracts of A$30 a tonne and tolerance of +/-10% on contracted tonnage.
AWB encourages growers to check the AWB website and familiarize themselves with the terms and conditions for its 2010-11 season wheat pools, before entering into wheat supply contracts.