AWB, the Australian group which last month highlighted signs of stabilising wheat prices, has cut its forecast for farmers' returns from the grain for the third time in six weeks.

The grain handler, Australia's former wheat export monopoly, said that farmers to the east of the country should expect to receive Aus$263 a tonne from its benchmark wheat pool, while those on the west should get Aus$255 a tonne.

The figures fall below the range of Aus$265-275 a tonne proposed a month ago, and put Western Australian farmers on course to receive at least Aus$50 a tonne less than the level AWB initially outlined in June.

Currency effect

AWB, which on August 31 noted signs of nerves among grain buyers, blamed the latest revision on currency movements as well as further falls in wheat prices, which have set two-year lows in Chicago.

"Grower returns will be set by export prices, so the strong Australian dollar is not helpful," AWB General Manager Commodities, Mitch Morison said.

"The commodity itself trades in US dollars and world prices have fallen, which means Australian farmers see a double effect."

'Particularly difficult year'

Nonetheless, the downgrade appears not have deterred Australian farmers from signing up for AWB wheat pools, with phones "ringing off the wall" after the launch on Monday of a programme offering a Aus$10-a-tonne premium for farmers who commit wheat early.

"The offer is supposed to last five weeks, but there has been so much interest we will be lucky if it lasts this week," AWB spokesman Ian Desborough told Agrimoney.com.

Nearly half the "significant" tonnage available under the programme had been filled.

He said the level of interest reflected farmers' keenness to diversify sales strategy in what looked like would be a "particularly difficult year for marketing grain".

East vs west

The announcements co-incided with the launch by exchange operator ASX of a West Australian wheat contract, which stood at Aus$205 per tonne for January delivery in late deals, with 250 lots traded.

Australian milling wheat for January stood at Aus$217 a tonne, with 751 lots traded.

Mr Desborough attributed the discount on AWB's west Australia contract to the worse prospects for eastern crops, which have suffered some dry weather damage, coupled with the stronger domestic demand in the east.