AWB (International) Limited has reduced the 2001/02 National Pool estimates for its main milling wheat grades this week, on the back of weakening futures markets and a stronger Australian dollar.
AWB (International) Limited’s General Manager, Sarah Scales said US futures markets had reacted negatively to an increase in US corn production and world wheat ending stocks forecast by the United States Department of Agriculture.
Ms Scales said a stronger US basis had offset some of the market fall, but the weaker prices for the main US competitor grades, particularly high protein, and the firmer currency had contributed to a downward revision of between $2 and $5 per tonne.
“The US futures price for Hard Red Winter wheat – the competitor for most of our middle to high protein wheats – has fallen dramatically over recent weeks,” she said.
Prime Hard estimates from AWB (International) were reduced by $4.50/t to $280.50/t (fob, GST exclusive), while benchmark APW was reduced by $3/t to $246/t (fob, GST exclusive). The forecasted feed wheat price has been dropped by $10/t.
However, a tighter global supply and demand outlook for soft wheat has seen 2001/02 estimates for Australian soft increase relative to the higher protein wheats.
As a result, new season soft estimates have increased $4/t to $260.50 (GST exclusive).
Australia’s lower protein milling and offgrades (ASW and AGP) have also benefited from the strong US soft markets, but still face strong competition from the likes of Argentina and eastern Europe, who continue to price aggressively to traditional markets.
The weaker market for higher protein wheat has also resulted in a changes to Golden Rewards protein scales for the 2001/02 Pool, with premiums for protein between 11.5 and 13pc being reduced.
Estimates for the 2000/01 National Pool remained unchanged
According to Ms Scales it remained “business as usual” for the world wheat market, with little noticeable change in buying habits as a result of the volatile world events.
AWB (International) Limited’s pool estimates are released fortnightly. The next update will be released on Monday 29th October 2001 at 5pm EST.
For more information please contact Ryan McKinlay, AWB Limited, on 03 9209 2324, or 0408 347 282.