Wheat growers using AWB Basis Pool will receive an excellent result for the third and final tranche of the 2002/03 Basis Pool.
AWB Limited Group General Manager Trading Peter Geary said AWB had delivered a basis of 78 US cents per bushel (c/bu) for the third tranche of the AWB Basis Pool contract. The result puts the final weighted average basis for the life of the Pool at 30.25c/bu for the APW benchmark grade.
The basis represents the average premium achieved by AWB for its international wheat sales above Chicago wheat futures. The result means AWB will be making a third tranche payment to growers of $35.72 per tonne for benchmark APW wheat (10% protein, 5% screenings, 12.5% moisture), taking total payments for APW to $202.23 per tonne.
AWB’s third tranche payment is calculated using a December Chicago Board of Trade futures settlement rate of 388.25 cents per bushel, and an AUD/USD currency hedge settlement rate of 0.7195 cents.
“For growers to determine their own final AWB Basis Pool returns, they should include their individual wheat futures and currency hedging results,” Mr Geary said.
“The final tranche is an excellent result, reflective of strong sales from the 2002/03 Pool in the second half of the year, and a rally in the US basis which has also been captured by AWB National Pool. The returns have also been supported by the recommencement of wheat shipments to Iraq during that period,” Mr Geary said.
Mr Geary said a significant proportion of the overall basis has been paid to growers in Golden Rewards quality payments, which includes moisture for the first time this season, along with protein and screenings.
“For the 2002/03 National Pool, where the crop profile was one of high protein with low moisture, growers will be receiving a larger proportion of their returns from the cash component rather than through the declared basis,” Mr Geary said.
Growers in the 2002/03 AWB Basis Pool have on average received about $10 per tonne in additional quality payments, compared to the 2001/02 contract, which is not reflected in the declared basis. The total basis achieved for the 2002/03 contract, including quality payments, makes it one of the highest Basis Pool results ever.
AWB Basis Pool gives growers the opportunity to access the benefits of the active management of AWB National Pool and the Single Desk system, and at the same time choose the timing of their wheat futures and currency hedging.
AWB RiskAssist offers a complete service to complement the Basis Pool, including futures brokerage, foreign exchange risk management, financing of hedge positions and balanced grain marketing advice.
The 2003/04 and 2004/05 Basis Pool contracts are now open, and growers wanting to generate their own returns through AWB Basis Pool should contact their local AWB area office.
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