A decline in world wheat prices driven by Northern Hemisphere grain supply and demand factors has led to a downward revision of equity estimates for several varietal grades in the 2001/2002 National Pool.
While the estimates for most new crop grades were reduced $3 per tonne, the 2001/2002 Feed wheat pool estimate was increased $5, and the 2000/2001 Soft, Noodle and Durum 1 and Durum 2 pools were increased.
National Pool manager David Johnson said an easing of concerns regarding corn and soybean crops in the US and wheat production in the Europe had lead to a setback in the market after a three week rally.
“The fact US corn and soybean areas have managed to avoid the intense heat and dry many have forecast has been a disappointment to market bulls. On the other hand, wheat farmers in Europe have enjoyed a break from previously wet conditions and harvest has progressed well there, Mr Johnson said.
“The market is also still concerned about the slow pace of exports out of the United States. The result of all this has been a US 30cents a bushel fall on the Chicago spot wheat contract and a resultant weakening of international wheat prices.
”Despite this, the National Pool is well set up to capture value adding opportunities through hedging and forward sales of new crop wheat, and we still expect very strong return for growers compared to previous years,” Mr Johnson said.
The benchmark APW grade for 2001/2002 is now estimated to return $242 per tonne (FOB, GST exclusive), down from the previous estimate of $245. Other grades reduced include Prime Hard, Hard, AGP, Soft, and Noodle. ASW was reduced by $1 per tonne. New season Durum pool estimates were unchanged.
Mr Johnson said the weakening market had little effect on old crop estimates.
“Our old crop marketing program is nearing completion and we are pleased to be able to pass on a $3 per tonne increase in the 2000/2001 Soft pool, and $2 per tonne increases for old crop Noodle, Durum 1 and Durum 2 grades.
Sales from the high screenings grain segregated in Western Australia last harvest have been realised, and that pool’s estimate has increased $10 per tonne.
Changes to the Golden Rewards Protein scales for the 2000/2001 Soft varietal pool are detailed in the table below. The protein discounts for the Soft varietial pool have been increased by 12 cents per 1.0% of protein between 8% and 11% protein. The discount is now 82 cents per 0.1% of protein above 8% to 11%.
AWB (International) Limited’s pool estimates are released fortnightly. The next update will be released on Monday 20th August 2001 at 5pm EST.