Dear

Welcome to Issue 14 of AACL's Grain Co-Production Updates.

2011 Grain Co-Production Offers - Still Open

AACL Pty Ltd (AACL) is still generating payment offers for wheat and barley Grain Co-Production (GCP) contracts for the 2011 season. Capital for 2011 is guaranteed via the 3 year funding and marketing agreement with Glencore Grain Pty Ltd (Glencore).

Many farmers have now received their final seeding payments. Any remaining seeding payments will be finalised once all of the required paperwork is returned to AACL. For further details regarding outstanding paperwork, please contact your Regional Area Manager.

Grain Marketing - Update

MARKET UPDATE - 2011 SEASON

International grain values have dropped substantially over the course of the last 6 weeks. Bearish news in the recent 30 June USDA report added further weight to the market, suggesting both higher corn areas planted and corn stocks than previous estimates which has resulted in decreased corn and wheat values.

The Australian dollar remains relatively high compared to the US dollar while local grain prices have fallen among thin demand for old season crop.

2010 SEASON - JULY DISTRIBUTION

As previously advised, AACL was aiming to make a further distribution for the 2010 season on 25 July and 25 October 2011 depending on market conditions. However, due to possessing up to 40% of unsold stock and market movements since the last distribution in April, AACL will not be in a position to make a July distribution.

AACL will undertake regular reviews of market conditions over coming weeks; however it is strongly recommended that you review your own cash flow position. 

AACL 2010 SEASON NOMINATED GCP GRAIN PRICE ESTIMATES - FOB

On 21 April, AACL made a distribution of up to 80% to farmers that qualified for a bonus from the 2010 season's crop. The distribution was made on estimated GCP prices which have now changed due to the downturn in market conditions. Updated estimates can be viewed via the links below. 

                                            WA     SA       VIC     NSW
Wheat - APW                   329     313     275     328  (Port Kembla only)
Barley - Feed                   270     222     230     230
Canola - Non GM            610     610     610     610

• Click here to view the current 2010 Estimated GCP Price (updated 6 July 2011).

NEW SEASON POOL ESTIMATES

At this time, AACL is not able to provide an update and will endeavour to produce an estimate in early August.

Agronomy Update - 2011 Season

SEEDING UPDATE

Sowing of contracted crops is now complete and Seeding Declarations have been returned in the majority of cases. Please note that final seeding payments cannot be processed until a Seeding Declaration has been returned and changes identified and updated.

CROP INSURANCE

Crops are insured under the terms of AACL’s Crop Insurance Policy. Details of the Policy and a Certificate of Currency will be forwarded by email in late August. Any questions or claims should be discussed with your Regional Area Manager or Grower Services.

FARMER REPORTS

Farmer reports are required to be completed by each contracted farmer in August and October. These reports are provided by email and are simple to complete online. They require you to give your assessment of expected yields for contracted crops as well as provide information on any issues that are likely to, or will impact on, the contracted crops.

POST EMERGENT CROP INSPECTIONS

Contracted crop inspections will commence in late July and you will be provided with the opportunity to discuss your availability to review the crop's performance and yield expectations. If you have any questions regarding this process please contact Troy Bungey, National Grain Production Manager, on 0429 103 077.

AACL Holdings Limited - ASX Announcement

29 JUN 2011: AACL TO RAISE A$2.7 MILLION VIA PLACEMENT TO GLENCORE AND FULLY UNDERWRITTEN RIGHTS ISSUE

AACL is pleased to announce an A$2.7 million capital raising by way of a combined A$0.5 million share placement with Glencore Grain Pty Ltd (Glencore) and a renounceable rights issue, fully underwritten by Glencore, to raise an additional A$2.2 million.

The announcement can be read in full here and media surrounding this announcement can be read here.

Should you have any other questions in regards to this email, please contact your Regional Area Manager or Grower Services on 13 000 GRAIN (47246).

Yours sincerely

Simon Foley
GENERAL MANAGER - PRODUCT SERVICES
AACL Pty Ltd