The majority of AWB 2011/12 season estimated pool returns (EPRs) have decreased by $2 - $8 a tonne as large Australian wheat stocks continue to put pressure on price.

AWB’s 2011/12 EPRs for APW wheat is now $263 a tonne and ANW noodle wheat is $276 a tonne in the WA Pool, APW is now $257 a tonne in the SA Pool and $258 a tonne in the Eastern Pool (FOB, excl GST).  

AWB’s Richard Williams said: “The Australian wheat basis remains relatively low due to the recent record Australian wheat crop however Australia is exporting at record pace to reduce large stocks.”

“Recently AWB’s marketing and technical managers visited key customers throughout Asia and while some raised concerns over the variability of the weather affected harvest in parts of the country, demand for Australian wheat continues to be solid,” Mr Williams.

“In the past month we have made key sales to China, Indonesia, Kuwait, Malaysia, New Zealand and Vietnam of various grades of milling and feed wheat. 

“Demand for lower grade wheats remains very solid, particularly in China, as customers substitute US corn for feed wheat due to the higher price of corn. 

“Currently wheat futures and the foreign exchange rate are having a relatively limited impact at this point on the price of Australian wheat.  We expect that this situation will change in time as the record export pace significantly reduces large stocks of Australian wheat.  

“In the second half of the year we expect appreciation in Australian basis in the eastern states and SA, while Western Australian wheat prices are likely to remain under pressure due to the size and the reduced quality profile of the wheat crop in WA.

“While Northern hemisphere weather is providing some support to global wheat values the weight of wheat stocks in Australia has meant prices remain extremely slow to respond. 

“The market continues to watch wheat crop conditions in key regions for wheat, particularly the EU and Russia as the development of yield expectation in these crops is critical for wheat price direction going forward.

“We continue to actively manage our FX and commodity hedge programs to add value and protect farmers’ returns in the AWB wheat pool,” Mr Williams said. 

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