AWB today announced the first estimated price range for the 2004/05 AWB National Pool, with an Estimated Pool Return (EPR) for the benchmark Australian Premium White wheat (APW) pay grade of between $190 - $200 per tonne (FOB GST exclusive), and an EPR for durum pay grade APDR of $220 - $230/t (FOB GST exclusive).
General Manager AWB National Pool, Sarah Scales, said the opening estimate reflected the outlook for a competitive wheat market in the year ahead, combined with a strengthening Australian dollar.
“Clearly a key driver for prices will be the Australian currency versus the US, with the appreciation of the Australian dollar by about 30% since this time last year,” Ms Scales said.
“We are only in the very early stages of the Pool life and the strong Australian currency is a key influence in our opening estimate,” Ms Scales said.
Ms Scales said the world wheat market remained particularly volatile, with expectations for a large new season world crop, and some optimism on the demand front.
“World wheat stocks are now at the lowest level for about 30 years, which has provided some underlying support for the wheat market,” Ms Scales said.
“However, the size and quality of the northern hemisphere crops will remain important for price direction. All indications are pointing to a large crop in both the EU and US with good conditions prevailing. That crop is now in its dormancy stages, and how it comes out of dormancy over the next few months will be important.
“On the demand side we have seen China re-enter the market last year with a one million tonne purchases of Australian wheat, and China now remains a swing factor for world trade.
“There are some expectations that China may require more imports, and if this eventuates, this will be positive for world trade. Also positive for prices has been the emergence of demand from the sub-continent, whose reduced domestic crop has prompted countries such as Pakistan to move from net exporters, to net importers this season,” Ms Scales said.
Ms Scales said AWB issued its APW estimate to enable growers to make important cropping and varietal decisions for the coming winter season. APW is AWB’s benchmark wheat pay grade, as it is the largest binning line and varietal pool in Australia.
“Obviously this is only an estimate and is subject to changes in the marketplace, but it is made on our best forecasts,” said Ms Scales.
A full range of Estimate Pool Returns for each AWB National Pool pay grade will be released in the coming months.
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