AWB (International) Limited (AWBI) has made one change in its National Pool update today, lowering the estimate for new season Prime Hard (APH).
AWBI General Manager Sarah Scales said 2001/02 APH base estimates had been reduced by $2 per tonne, with the APH protein scales being adjusted slightly.
National Pool estimates for 2001/02 APH are now $278.50/t (FOB, GST exclusive), while benchmark APW remains at $247/t.
Ms Scales said the key feature of the international wheat market during the past week had been the increase in Chicago Board of Trade (CBOT) wheat futures, where the nearby March contract reached three-year highs.
However, she said the increase in CBOT values alone did not mean an automatic increase in AWBI Pool estimates, as the wheat traded on that market – US soft red winter (SRW) – was not a major competitor for Australian wheat.
“Soft red winter wheat is a relatively minor part of world wheat trade, accounting for about five million tonnes of the average 100 million tonnes of wheat exported around the world each year,” Ms Scales said.
“The National Pool will only rally to the extent that prices for competitor grades for Australian wheat increase. Last week’s rallies on Chicago will be supportive for the National Pool, but Pool prices would not track the CBOT one for one.”
“A bigger factor for AWBI, and the National Pool, are hard red winter (HRW) wheat prices, and at the moment, the Kansas City Board of Trade (which is where HRW is traded) has not rallied to the same extent as Chicago.”
Ms Scales said while CBOT March contracts had gained 16 cents per bushel last week, KCBT had only gained just over 6c/bu, and was now trading at a 16c/bu discount to CBOT. The FOB US Gulf prices for each grade are now approaching parity
“These movements are really a reflection of the high stocks and slow US export pace for HRW, and the extremely tight balance sheet of SRW,” Ms Scales said.
The next Pool Update will be January 21, 2002, at 5pm.