Wheat growers can once again generate their own pool return with the launch of the 2001/2002 AWB Basis Pool contract.
Basis Pool allows growers to take advantage of AWB’s Single Desk management while undertaking their own wheat futures and foreign exchange hedging.
Under the terms of the Basis Pool contract, growers can make their own wheat futures hedging decisions using Chicago Board of Trade wheat futures, and lock in their Australian dollar return by hedging the US/Australian dollar.
AWB Limited manages the basis – the premium for Australian physical wheat over Chicago wheat futures – as part of it normal National Pool sales program.
The combination of the grower’s futures and currency hedges, plus the AWB’s basis, generates the grower’s final return.
For the first time, Australian growers will be able to execute all of their Basis Pool transactions with AWB, using risk assist, AWB’s new risk management service. AWB risk assist provides a complete risk management service, including wheat and currency futures execution and an innovative margin call management system.
AWB risk assist General Manager Patrick O'Shannassy said the Basis Pool gave growers the most flexible and potentially rewarding method of pricing their grain.
“When you can separate all the components of a price – futures, currency and basis – you have a powerful tool at your disposal,” Mr O’Shannassy said.
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 risk assist, should contact their local AWB Area Office.
For more information contact: Peter McBride, AWB Limited, on 03 9209 2174 or 0417 662 451