MEDIA RELEASE: Grower demand for wheat pools on the rise following poor 2015-16 cash price
Australian wheat growers are turning to pool products to sell grain on the back of low cash prices they endured for the 15-16 Harvest.
AWB‘s early season pool which opens for contracting next week (June 20-24) is expecting a 25 per increase in tonnes from growers who are looking for cash alternatives for their 16-17 crop.
AWB portfolio manager Charlie Brown:
“We forecast 25 per cent growth in our early season pool this year, on the back of a challenging 15-16 price environment. Growers are seeking another way to market their grain because the price outlook has been and continues to be so disappointing,” he said.
Growers have spent six months holding onto grain waiting for a better price opportunity, then selling at the same price as six months ago, but with added storage costs.
“Holding and hoping was a failed selling strategy. They won’t put up with that pain again for this season,” Mr Brown said.
With Australian wheat stockpiles growing as global demand continues to be weak, early season pools are proving attractive to growers looking for pricing opportunities.
“An early pool gives growers exposure to two volatile offshore pricing periods plus also the whole price environment from when your crop is in the ground until six months after you have harvested,” Mr Brown said.
In the recent lower cash price environment, an early season pool offers growers exposure to opportunities in both the 15/16 and 16/17 northern hemisphere weather markets - plus the whole Australian season and still be finalised by the end of the financial year.
Growers are also looking for cash flow and payment advances, which can be critical to alleviate financial pressures for growers at this time of year.
“The interest in our early season pool Season Starter is also due to generally good crop conditions across the wheat belt and on the back of proven performance, having outperformed the average equivalent best cash bids for APW across the three seasons it has been offered,” Mr Brown said.
“A lot of growers tell me that it sure beats watching the market for 12 months themselves,” he said.
“It also gives the grower a benchmark price to compare to when selling their uncommitted grain post harvest."
Kate Adamson, AWB Marketing & Communications Manager 0400 017 617