Growers using AWB Basis Pool for the 2004/05 season will benefit from a strong basis result for the first tranche announced today of 42 cents per bushel (c/bu)
AWB Limited General Manager Trading, Peter Geary, said the basis was a historically high result for the first tranche, and meant growers using the product were well placed to generate good final returns. The result delivers a first payment to growers of $86.10/t for benchmark APW (FOB, GST exclusive).
Mr Geary said AWB had been able to capture the benefits of a firming international basis for white wheat, amid a highly competitive international wheat market.
“This is an historically high basis result, and when you take into account the fact that Golden Reward payments for moisture, protein and screening are made on top of this, it is one of the best ever first tranche results,” Mr Geary said.
The first tranche result was based on Chicago Board of Trade settlement price of 292.50 c/bu, and an AUD/USD Hedge Settlement Rate for the first tranche of 0.7851.
To determine their Basis Pool returns so far, growers should include their individual wheat futures and currency hedging results. Mr Geary said for the 2004/05 Basis Pool, many growers had hedged early last year, and insulated their returns from the drop in commodity prices, and strengthening Australian dollar since then.
“With early hedging of currency and commodity, and the strong basis results for Australian wheat sales, Basis Pool growers have had the opportunity to really manage their risk exposure, and put themselves on track to generate strong returns,” he 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.
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. 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 $86.10 (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 55 per cent of the grade premiums and Golden Rewards increments in their payment, which is not included in the basis result.
The next payment tranches will occur in July and December this year.