Dear AACL Grower,

Welcome to Issue 17 of AACL's Grain Co-Production Updates.

GRAIN MARKETING UPDATE

ABARE confirmed what we all knew was true - the Aussie crop for this season will be a big one.  They pegged wheat production at 28.3 Mmt of which 21.6 Mmt will be exported into a world market gradually increasing wheat stocks.

This Friday will see the USDA release its World Agricultural Supply Demand Estimate (WASDE) and the market is predicting a lift in world and US wheat stocks, in particular in Australia and Canada.  This is in contrast to the corn market where in spite of a slight increase in stocks, will remain in historically short supply (see Figure 1 below). 

Egypt bought wheat this week in its routine tender from Argentina and Ukraine. 
Prices paid were between USD220 and USD222 FOB Argentina.

FIGURE 1: WORLD STOCKS
Source: USDA WASDE Report, November 2011

QUALITY OPTIMISATION - WA GROWERS ONLY

AACL, like all WA grain growers, is able to Quality Optimise (QO) loads delivered to CBH which meet the QO requirements.  We are currently assessing the most effective way to utilise QO within our system and will advise contracted growers of the outcome in the coming weeks.

2011 SEASON POOL ESTIMATES

Below are the current Pool estimates (FOB) for the 2011 / 2012 season. Wheat and Barley remain unchanged, while Canola fell $5/t across all port zones.

                                   WA Ports           East Coast Ports
                                   (Kwinana)            (Port Kembla)
Wheat - APW               $272                        $275
Barley - Feed                $236                        $214
Canola - Non GM          $581                        $512

Estimates on grade spreads are available via this link under Grain Marketing Downloads.  AACL aims to advise growers of updated estimates on a fortnightly basis.

Pool estimates provided do not contain spreads for malt barley. However, AACL expects the premium will be $5/t across all malting varieties due to the local and international supply-demand picture.

Grain quality and market volatility may affect the Pool estimates in the short-term and as a result, harvest distributions may not be based on the current estimate. AACL will release estimates for harvest distributions within the coming month.

AACL is expecting to pay growers a 70% distribution, 30 days from receipt of the Harvest Declaration. This will be followed up with another 10 – 20% distribution during April with the Pool to be finalised by June 2012.  Please be aware the above is subject to global grain marketing conditions and therefore may change.

AACL FREIGHT RATES

AACL approved delivery sites and applicable freight rates are as per this link under Grain Marketing Downloads.

Peter McEwen
CHIEF EXECUTIVE OFFICER
AACL Pty Ltd