Australia
June 15, 2015
AWB today launched its 2015 Season Starter™ to assist Australian wheat growers with maximising the financial benefits of their wheat crop.
Portfolio Manager Charlie Brown said: “The Season Starter™ is an actively managed program designed for growers who want to market their wheat early in the season in order to take advantage of the pricing opportunities at that time.”
“Over the past two years the Season Starter™ has on average achieved better financial returns than the average cash bid and with guaranteed minimum returns (GMR), capped costs and features to assist with cash flow it is the ideal product to manage price risk for a portion of a grower’s crop,” Mr Brown said.
The estimated returns for the 2015 AWB Season Starter™ are APW2 $300 a tonne (Free in Store, GST exclusive) in the Western Australian Region, APW1 wheat at $320 a tonne (Port, GST exclusive) in the North Eastern Region, $305 a tonne (Port, GST exclusive) in the South Eastern Region and APW1 wheat at $285 a tonne (Port, GST exclusive) in the South Australian Region.
AWB calculates its estimated returns by taking into account export and domestic values and the forward pricing structure of the global wheat and Australian dollar markets.
“Currently international wheat values remain under pressure with high global supplies and limited customer demand and this paints a bearish outlook for global wheat prices through 2015 and into 2016,” Mr Brown said.
“However there is some support coming from concerns regarding weather and crop conditions in US, France, Russia and Australia and recently a large speculative short position in the US wheat futures market has added volatility to the global market.
“The Season Starter™ has the ability to capture early season prices as we actively hedge from the time of contracting and look to add value across the season in both the domestic and export markets.
“With independent forecasters anticipating an average Australian wheat crop despite an El Nino weather pattern, ample global wheat supplies and a continuing volatile Australian dollar it is expected that we will experience a volatile domestic wheat market over the coming 12 months.
“It’s fair to expect some price pressure on the domestic wheat market once the size of the Australian crop is known,” Mr Brown said.
Following the success of the program over the last two seasons and feedback from farmers we have made some minor adjustment to the 2015 Season Starter™ to enhance the product.
“To assist growers to compare products all estimated returns for the Season Starter™ will be quoted on a port equivalent basis (FIS in WA), the range of payment and finance options has been expanded and the Production Advance™ is now $100 per tonne giving growers access to cash prior to harvest,” Mr Brown said.
Contracting into this program is open for one week only.
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AWB 2013/14 Season Starter™ Estimated Returns ($/t Port, GST exclusive)
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APW grade
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Estimated Return
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North Eastern
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$320
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South Eastern
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$305
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South Australia
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$285
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Western Australia
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$300
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2015/16 Season Starter™ estimated returns and the GMR for acceptable wheat grades can be found on the AWB website. Port differentials will apply to each of the Season Starter regions and are available at www.awb.com.au/Season Starter.
Further product information including terms & conditions are available on the: www.awb.com.au
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