Growers using AWB Basis Pool for the 2003/04 season will receive a second tranche basis result of US 20 cents per bushel (c/bu).
AWB General Manager Trading, Peter Geary, said the second tranche would deliver a payment of $58.51/t for benchmark APW, and was a good result in what had been a volatile and weakening international grain market.
Mr Geary said the second tranche result was based on a Chicago Board of Trade settlement price of 345.25 c/bu, and an AUD/USD Hedge Settlement Rate of 68.81 cents.
“With the second tranche, Basis Pool growers have now received 85% of their contract payment, which provides them cashflow and increased price certainty,” Mr Geary said.
The AWB Basis Pool gives growers the opportunity to choose the timing of their wheat futures and currency hedging, allowing them to effectively generate their own pool return.
“To determine their individual payment growers have to take into account their own currency and wheat futures hedging results, as well as their Golden Reward quality payments on moisture, screenings and protein,” 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 about $230 - $240 per tonne (FOB),” 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 payment of $58.51 (FOB, GST exclusive) for APW 10 per cent protein, 5 per cent screenings and 12.5% moisture, will be made this week. Growers will receive 30% per cent of the grade premiums and Golden Rewards increments in their payment, which are not included in the basis result.
The third and final tranche payment will occur in December this year.