Growers using AWB Basis Pool for the 2002/03 season will receive a first payment of $112.63, following the announcement today of the first tranche result for the 2002/03 contract.
AWB Limited General Manager Trading, Peter Geary, said the basis of 19 US cents per bushel reflected the average premium achieved by AWB for international wheat sales to date over Chicago wheat futures.
"Market conditions in the past six months have been very difficult, with highly volatile Chicago Board of Trade futures, lower domestic US values relative to Chicago and slow world demand for wheat which has capped export prices," Mr Geary said.
"We have seen supply problems in the US force US futures to rally higher, but at the same time, increases in the supplies of non-traditional exporters has meant world prices have not rallied to the same extent. The end result has been a fall in world basis levels relative to Chicago futures.
"Also, for the first time, this season growers will receive a moisture payment through Golden Rewards to more accurately reflect the quality of their deliveries. In the past low moisture was factored in as an inherent component of their basis payment, so this has also had a significant impact on this year’s basis number relative to last year," Mr Geary said.
For growers to determine their Basis Pool returns so far, they should include their individual wheat futures and currency hedging results.
The AWB Basis Pool gives growers the opportunity to access the benefits of AWB’s management of the Single Desk, and at the same time choose the timing of their wheat futures and currency hedging. This means that growers are effectively generating their own pool return.
AWB riskassist provides an all-encompassing service to support the Basis Pool, including wheat futures and currency components execution, financing of hedge positions and balanced advice on hedging with futures and options.
This season demonstrated the benefit of implementing minimum price strategies designed by AWB riskassist, which tailored these strategies to meet the client’s price objectives and their individual budget requirements.
To calculate the first tranche payment of the 2002/03 Basis Pool AWB will use the Chicago Board of Trade SRW settlement price from February 26th of US319.75 cents per bushel, and the AUD/USD Hedge Settlement rate of 60.78 cents.
The payment of A$112.63/t (FOB, GST exclusive) for APW 10 per cent protein, 5 per cent screenings and 12.5% moisture, will be made next week. Growers will get 55 per cent of the grade premiums and Golden Rewards increments in their payment.
The next payment tranches will occur in July and December this year.
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