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Special One Grain | Growing together since 1987.

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E-mail: admin@specialonegrain.com.au
 
Special One Grain / Pools  / 2016/17 ACTIVELY MANAGED BARLEY PROGRAM

2016/17 ACTIVELY MANAGED BARLEY PROGRAM

 CODE: 16AMBAR  BARLEY – ACTIVELY MANAGED

OVERVIEW

Barley is currently amongst the cheapest of feed grains in the world. At the same time, Australian barley values are on par with that of the Black Sea, being the cheapest origin in the world.

Hence, the barley price has significantly more upside potential than down. The key to pricing consideration continues to be the grower’s ability to hold barley and NOT sell at harvest.

The Actively Managed Barley Program will aim to take the harvest pressure off barley prices whilst providing growers with immediate cash flow. The strategy will be to hold the majority of the barley to participate in market movements post harvest and to arbitrage the market where possible.

The Actively Managed Barley Program will apply a limited hedge program to protect against further falls in prices despite the current lows.

 


OBJECTIVES

To maximise returns whilst limiting downside risk, outperforming the average cash price over the marketing window.

 


APPROVED RECEIVAL POINTS

Graincorp and AWB Grainflow sites in NSW, QLD and VIC.

 


DELIVERY WINDOW

November 2016 to January 2017

 


MARKETING WINDOW

November 2016 to September 2017

 


POOL FINALISATION

24th of November 2017

 


PAYMENT

Harvest or Deferred Payment

 


SPECIAL FEATURES

  1. Marketing team with extensive experience in hedging domestic and international markets.
  2. Marketing team to use full range of tools to maximise returns whilst limiting downside risk with timing of hedges and sales.

 


OTHER KEY FEATURES

  • Robust, disciplined management process
  • Fixed payment dates
  • Flexible payment alternatives for cash flow management
  • Benchmarking performance against objectives
  • Monthly updates
  • Equity Statements online
  • Online local site estimate and cash flow calculator

 


BENCHMARKING

Special One Grain has a rigorous standard for managed programs and will benchmark performance against comparable cash prices. Monthly reports will be provided to all participants in compliance with GTA code of conduct.

 


MANAGEMENT PARAMETERS

Based on their market analysis, the management team will operate within the following parameters:

  • Grain will only be hedged once it has been physically received. The sales program will be targeting the second and third quarter of 2017 where chances of market rallies are highest. The management team has the discretion to hedge a portion of the pool however the intention is to limit the hedged portion to a maximum of 50% of the total tonnage to maintain maximum exposure to global and domestic markets.

 


PAYMENT ALTERNATIVES

Growers delivering to an approved bulk handler can choose between harvest or deferred payment terms.

 

HARVEST PAYMENT 14 days end of week of delivery 70% of estimated FOB return
Less 100% of estimated costs
21st July 2017 80% of estimated FOB return
Less previous payments
Less 100% of estimated costs
24th November 2017 100% return of final costs
DEFERRED PAYMENT 14 days end of week of delivery $10/mt
21st July 2017 70% of estimated FOB return
Less previous payments
Less 100% of estimated costs
124th November 2017 100% of final FOB return
Less previous payments
Less 100% of final costs

 


FEES AND DEDUCTIONS

Returns are quoted gross including costs at a FOB level and net of costs at Port Terminal Basis.

Management feed are set at a flat rate of $6.75/mt.

 


FURTHER INFORMATION & DISCLAIMER

This information is not exhaustive and should be read in conjunction with the following documents:

2016/17 Standard Pool Management Terms and Conditions and Schedules
2016/17 Pool Location Differentials
Cash Prices
Pool Updates

The information in this document is not financial advice or market advice, a risk management recommendation or strategy. Growers should consider seeking independent advice to assess the appropriateness or otherwise of this marketing program for their personal circumstances.

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