AWB has made a number of adjustments to base rates and Golden Rewards estimates for the 2004/05 National Pool, on the back of a weaker international wheat market.
While the EPRs for the majority of grades in the 2004/05 Number 1 Pool remain unchanged, AWB has lowered estimates for APH, ASWN and APN by $2 per tonne. It has also reduced the Estimated Pool Return (EPR) for most pay grades in the more exposed number 2 Pool by between $3 and $5/t. There is no change to EPRs for the 2003/04 Pool.
A reduction in the international premiums for hard wheat have also prompted adjustments to Golden Rewards protein increments for the 2004/05 Pools (both Number 1 and Number 2), with premiums for protein above 12% being reduced for the hard wheat grades APH, AH and AUH.
General Manager AWB International, Sarah Scales, said the wheat market had been forced downward by strong global supplies and high stock levels.
“A feature of the international market recently has been the presence of high quantities of aggressively priced wheat, particularly from suppliers such as Argentina and Russia,” Ms Scales said.
Another factor market has been the move by the European Union to reintroduce restitutions for wheat exports, which are a form of export subsidy. While this decision itself has not prompted significant drop in the market at this stage, it does add more pressure to prices, which are already at low levels.
“A combination of these factors helped force futures values to new contract lows in Chicago last week,” Ms Scales said.
The changes to the APH base rate, and to Golden Rewards protein increments for the hard wheat grades, follows an easing of international prices for high protein wheat, and a big crop of high protein wheat in Australia this year.
“International premiums for hard wheat rallied last year following frost in Canada and some concern about short supplies. The market is now more comfortable with the levels of supply, and those premiums have now come off as a result,” Ms Scales said.
The drop for noodle prices follows the large crop in WA, which has eroded the premiums on offer for the ASWN and APN pay grade.
The next Pool Update will be Monday 14th February 2005.