AWB’s 2009/10 estimated pool returns (EPRs) for wheat have been revised downward, on the back of a weakening world market and a stronger Australian dollar.

Benchmark APW grade wheat in the eastern pool has been reduced by $8 a tonne to a new EPR of $246 a tonne, while the western pool is down $3 a tonne to a new EPR of $246 a tonne (FOB, excl GST).

AWB General Manager Commodities, Mitch Morison, said the world wheat market had built up stocks well in excess of demand over the past two years and as northern hemisphere crops advanced from winter into spring it looked like another big crop would be produced in 2010, all of which was negative for prices.

“It’s not a good price environment; the reality is the world is awash with wheat, which means it is a buyers’ market. All of AWB’s customer relationships and experience as a supplier of quality wheat are important and valuable, however it is an intensely competitive situation.

“Strong Chinese demand for commodities is also driving sea freight rates higher, with greater competition for vessels meaning it will be even more expensive to ship Australian wheat to Asia.

“Our pool changes reflect prices from Western Australia holding up slightly better than those from further east and the freight situation is one of the contributing factors.

“The export trade out of Western Australia is committed to forward sales and has booked a significant level of shipping capacity under the take or pay arrangements operating there. The export pace from eastern Australia is much slower and when you add in the appreciation of the Australian dollar the reasons for pressure on our eastern pool EPRs become clear.

“AWB’s physical sales are supported by derivative and currency hedge programs that are reducing the impact of deteriorating market conditions. To put this in context, since our last pool update the raw market fall on foreign exchange and US futures equates to $19 a tonne, with limited Australian basis movement. Our pools are not fully priced however, which is why our EPRs still show some change,” Mr Morison said.

Media Inquiries:  Ian Desborough 03 9209 2335 or 0418 853 881

EASTERN POOL - Estimated Pool Return 2009/10 AWB Pool ($/t FOB, excluding GST):
Pool Pay Grade Base Rate	Estimated Pool Return	Change
APH1 (14% protein)	$271	Down    $8
APH2 (13% protein)	$266	Down    $8
AH14 (14% protein)	$266	Down    $8
AH1 (13% protein)	$263	Down    $8
AH2 (11.5% protein)	$257	Down    $8
H2G (11.5% protein)	$257	Down    $8
AUH2 (Flat protein)	$242	Down    $8
APW1 (10.5% protein)	$246	Down    $8
ASW1 (Flat protein)	$231	Down    $13
SFE1 (Flat protein)	$266	Down    $8
SFE2 (Flat protein)	$256	Down    $8
AGP1 (Flat protein)	$231	Down    $8
HPS1 (Flat protein)	$226	Down    $8
FED1 (Flat protein)	$206	Down    $8
AUW1 (Flat protein)	$206	Down    $8
SFW1 (Flat protein)	$226	Down    $8
GPSF (Flat protein)	$206	Down    $8
AH9 (Flat protein)	$226	Down    $8
DR1 (Flat protein)	$261	Down    $9
DR2 (Flat protein)	$251	Down    $9
DR3 (Flat protein)	$241	Down    $9
WESTERN POOL - Estimated Pool Return 2009/10 AWB Pool ($/t FOB, excluding GST):
Pool Pay Grade Base Rate	Estimated Pool Return	Change
AH1 (13% protein)	$269	Down    $3
AH2 (11.5% protein)	$264	Down    $3
BR1 (12% protein)	$267	Down    $3
ER1 (12% protein)	$267	Down    $3
AUH2 (Flat protein)	$240	Down    $3
APW2 (10% protein)	$246	Down    $3
ANW1 (Flat protein)	$241	Down    $3
ANW2 (Flat protein)	$231	Down    $3
APWT (10% protein)	$246	Down    $3
ASW1 (Flat protein)	$236	Down    $3
AGP1 (Flat protein)	$231	Down    $3
AUW1 (Flat protein)	$196	Down    $3
SFT1 (Flat protein)	$271	Down    $3
SFT3 (Flat protein)	$251	Down    $3
FED1 (Flat protein)	$196	Down    $3
DR1 (Flat protein)	$260	Unchanged
DR2 (Flat protein)	$240	Unchanged

View all 2010 mediareleases