Growers using the AWB Basis Pool for the 2003/04 season will benefit from a strong third and final tranche basis of US 57 cents per bushel (c/bu).
AWB General Manager Trading, Peter Geary, said the strong result continued the trend of increasing basis levels over the course of the three tranches for the 2003/04 AWB Basis Pool contract, delivering an overall weighted average basis for the contract of 20 c/bu.
Mr Geary said the third tranche result was based on a Chicago Board of Trade settlement price of 299.25 c/bu, and an AUD/USD Hedge Settlement Rate of 0.7875 cents.
“To determine individual payments, growers must take into account their own currency and wheat futures hedging results, as well as their Golden Reward quality payments for protein, screenings and moisture,” Mr Geary said
“This final result has continued the trend of a strengthening basis throughout the life of this contract. Early in the season, large global supplies of white wheat meant white wheat basis was trading at a discount to US red wheat placing pressure on the March basis. Despite this, AWB has been able to deliver a sound basis result for the first tranche, and has captured the benefits of a firming international basis for the July and December tranches, achieving a strong overall result,” Mr Geary said.
Mr Geary said many growers had hedged their foreign exchange component early, putting them on track for strong currency results and overall returns. Those growers who had also taken futures hedging opportunities prior to their recent decline were also well poised for good returns.
“A number of growers using AWB RiskAssist who did take futures and currency hedging opportunities early are now on track to achieve a Basis Pool return for APW of $230 - $240 per tonne (FOB GST Exclusive),” Mr Geary said.
AWB RiskAssist provides an all-encompassing service to support the Basis Pool, including wheat futures and currency component execution, financing of hedge positions and balanced advice on hedging with futures and options.
The final remaining equity payment of $24.93 (FOB, GST exclusive) for APW 10 per cent protein, 5 per cent screenings and 12.5% moisture plus varietal grade premiums and Golden Rewards increments in their payment (which are not included in the basis result) will be made prior to December 10, 2004.
For the current harvest the 2004/05 Basis Pool remains open for a limited tonnage, growers who wish to participate should call their local Grain Marketer as soon as possible as it is subject to close at any time.
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