Such strategies will increase your price risk significantly, for the following reasons;
- AU$ appreciation from US$0.63 lows
- US$250/mt = Every 1c movement in the AUD/USD = $5.49/mt movement
- USD$280mt = Every 1c movement in the AUD/USD = $6.15/mt movement
- USD$350mt = Every 1c movement in the AUD/USD = $7.69/mt movement
- Northern Hemisphere production impacts
- ~90% of the world’s exportable wheat is harvested between June-September, which historically creates price pressure
- Missing pre-harvest opportunities
- Domestic opportunities
- Export opportunities
- DCT opportunities (Deliver Container Terminal)
- ASX shorts
- Missing post-harvest domestic opportunities
- Domestic demand
- Malt premiums
- Protein wheat
- DCT
- Exports shorts
- Domestic demand
- Missing early season valuable export capacity
- Australia’s competitive advantage as an exporter is that we can export in the first half of the calendar year, before the Northern Hemisphere begins harvest, which represent ~90% of the words exportable wheat
- Increased cost of storage and handling in eastern Australia
- Interest cost on of funding (Cash rate has increased 4.25% over the past 18 months
Flexi Grain’s program provides mitigation strategies against this risk for Growers.
Our management programs carefully consider and manage the risk associated with carrying grain. While providing growers with flexible payment options and the ability to defer up to 100% of their income into the new financial year.
Contact your Regional Manager today to learn more about the program and grain price risk mitigation.
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