AWB has announced the second tranche for the 2004/05 AWB Basis Pool, with a basis result of 20.50 US cents per bushel (c/bu) and a second payment to growers using the product of $50.50 per tonne for benchmark APW (FOB, GST exclusive).
AWB Limited General Manager Trading, Peter Geary, said the result was down from the first tranche announced in March, reflecting a weakening international basis. He said the weighted average basis result to date of 32.33 c/bu represented a solid result for growers using the product, but as they are based on final return estimates, these results could fluctuate prior to finalisation of the 2004/05 AWB Basis Pool in December.
Mr Geary said AWB had captured the benefits of a firming international basis for wheat in the first tranche, but had faced a softer basis environment for the second tranche period. He said this was due to good global supplies of US soft wheat, and a rally in US wheat futures which reduced basis levels for US soft wheat.
The second tranche result was based on Chicago Board of Trade settlement price of 336 c/bu, and an AUD/USD Hedge Settlement Rate of 0.7782.
To determine their AWB Basis Pool returns so far, growers should include their individual wheat futures and currency hedging results. Mr Geary said tranche results reflected the actual futures and foreign exchange values on June 22, but many growers had seized opportunities to hedge currency and commodity prices early, insulating their returns from commodity price volatility and from the stronger Australian dollar.
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.
AWB RiskAssist provides an all-encompassing service to support the AWB Basis Pool, including wheat futures and currency component execution, financing of hedge positions and balanced advice on hedging with futures and options. Growers wanting information on their risk management options, particularly following the recent rally in US wheat futures, should contact their regional offices, or the AWB RiskAssist client service line on 1300 666 011.
The payment of $50.50 (FOB, GST exclusive) for APW 10 per cent protein, 5 per cent screenings and 12.5% moisture, will be made next week. It takes the total paid over the two tranches to $136.60/t. Growers will receive 30% per cent of the grade premiums and Golden Rewards increments in their payment, which is not included in the basis result. This will take the total paid to 85% for the 2004/05 AWB Basis Pool.
The final payment tranche will occur in December.
Media contact Ryan McKinlay on (03) 9209 2324 or 0408 347 282.