Increase to lower wheat grade pool returns

Lower wheat grades' Estimated Pool Returns (EPRs) for the AWB 2012/13 Wheat Pools have increased while milling wheat grades remain unchanged, according to grain marketer AWB.

"With the bulk of the 2012/13 Wheat Pool volumes sold the majority of EPRs remain unchanged however lower grades have increased due to tightening domestic supplies due to strong export and domestic demand," said AWB trading and risk management head Josh Martin in a statement. "We continue to sell the remainder of pool wheat domestically and throughout the life of the pool have targeted key customers in Asia, Middle East and East Africa.

"We are on track for another strong financial distribution in September and a financial top up later this month on the back of a strong export campaign in the first half of the year and as previously announced the Pool will be finalised by the end of November 2013, three months ahead of schedule."

Benchmark grade APW2 remains at $331 a tonne (FOB, excl GST) and noodle grade ANW1 is $381 a tonne (FOB, excl GST) in the Western pool, APW1 is at $333 a tonne (FOB, excl GST) in the Eastern pool and APW1 is at $325 a tonne (FOB, excl GST) in the SA pool.

"The latest US Department of Agriculture report forecasted a reduction in both corn and soybean yields," Mr Martin said. "While global wheat production was increased this was offset with an increase in global wheat demand.

"The market is closely watching the US weather in the next two - three weeks.

"This period will be critical for corn yields and we anticipate US wheat futures will remain under pressure if no adverse weather occurs.

"In addition US wheat futures and global wheat prices have softened from Northern Hemisphere pre harvest values on the back of farmer selling in the Black Sea and Europe, which have produced good crops."

AWB will launch its Early Commitment Premium contracts for the AWB 2013/14 Harvest Pools next week.