AWB Limited have accelerated the release of its popular Basis Pool contract, allowing growers to take advantage of early marketing opportunities to assist with their price risk management.
Managing wheat price risk is now easier and more flexible for growers with the launch of AWB Limited’s 2002/2003 Basis Pool contract.
AWB riskassist General Manager Patrick O’Shannassy said growers have demanded earlier forward price risk management tools, so we have made a concerted effort to release the Basis Pool earlier than usual to meet their needs.
“The AWB Basis Pool provides the option of pricing wheat forward 18 months, and this gives growers more opportunity to capture a price for their wheat which suits their business and take control of their own pricing.”
Under the contract, growers can hedge wheat futures and foreign exchange risks, up to 18 months out from harvest, and still take advantage of the benefit of the premiums AWB achieves from wheat sales in the international market.
“Using AWB riskassist and Basis Pool, growers can plan to grow wheat next season with confidence because they will know they have hedged the major price risks they face a season in advance,” said Mr O’Shannassy.
“The extra flexibility can also mean opportunities to capture market peaks when pricing their grain,” Mr O’Shannassy said.
The Basis Pool contract provides growers with the opportunity to generate their own Pool return by separating the wheat hedging, foreign exchange hedging and physical components of their grain. Growers manage their hedge positions using Chicago Board of Trade wheat futures, and foreign exchange contracts and AWB manages the wheat basis for wheat through its National Pool marketing program.
In effect the growers’ hedging strategy determines the major part of their wheat price, and through the National Pool AWB delivers the premium over Chicago Futures achieved from the AWB National Pool sales program.
Australian growers will be able to execute all of their Basis Pool transactions with AWB, using AWB riskassist. AWB riskassist provides a complete risk management service, including market advice, wheat and currency futures execution and an innovative margin call management system in which AWB finances growers hedge positions for a fixed fee.
The Basis Pool contract is for a minimum 952 tonnes. Growers can deliver any variety grade of wheat, except durum, against the contract and receive the National Pool variety spreads and Golden Rewards premiums and discounts.
Growers who would like to know more about AWB’s Basis Pool, or AWB riskassist, should contact their local AWB Area Office.
For more information contact: Alana Wastle on (03) 9209 2555 or 0407 310 250.