Market situation

Cereals

DG AGRI C 4 Civil Dialogue Group on Animal Products

Pig Meat

28 October 2015

copyright_purestock_thinkstockphotos_72969376_low

Exchange Rates

2

Euro – Dollar exchange rate

3

01/07/20141.3688

1.1373

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40

Spot, ECB reference

-16.9%

4

Euro – Argentine Peso and Brazilian Real

exchange rate

0.0

2.0

4.0

6.0

8.0

10.0

12.0

01/99 01/00 01/01 01/02 01/03 01/04 01/05 01/06 01/07 01/08 01/09 01/10 01/11 01/12 01/13 01/14 01/15

Exchange rate: ARG Peso/Euro, Spot, ECB reference and local market quotes

Exchange rate: BRA Real/Euro, Spot, ECB reference

20/10/2015: 1 EUR = 10.79 ARS = 4.39 BRL

Euro and Dollar – Russian Rouble exchange rate

5

RUB/USD

61.88RUB/EUR

70.22

25

35

45

55

65

75

85

01/13 03/13 05/13 07/13 09/13 11/13 01/14 03/14 05/14 07/14 09/14 11/14 01/15 03/15 05/15 07/15 09/15

Source: Thomson Reuters

Euro and Dollar - Ukraine Hryvnia exchange rate

6

UAH/USD

22.16UAH/EUR

24.05

7

12

17

22

27

32

37

01/13 03/13 05/13 07/13 09/13 11/13 01/14 03/14 05/14 07/14 09/14 11/14 01/15 03/15 05/15 07/15 09/15

Source: Thomson Reuters

7

Crude oil price ($/barrel)

20

40

60

80

100

120

140

160

2008 2009 2010 2011 2012 2013 2014 2015

CRUDE OIL FUTURES PRICE ($ PER BARREL), 1 MONTH FORWARD (FOB): BRENT BLEND (NORTH SEA) - UK

20/10/2015: 49

Cereals World Forecasts

8

9

World cereals: IGC

World Production

World Consumption

373404

366 361337

407445 456 (447)

159 172140 125

99121

143 145 (139)

1802 1800

1750

1850

1795

2006 2017 1996 (1988)

17311769

1785

18531818

1936

1979 1986 (1985)

1400

1450

1500

1550

1600

1650

1700

1750

1800

1850

1900

1950

2000

2050

2100

0

100

200

300

400

500

600

700

800

900

1000

2008 2009 2010 2011 2012 2013(est.) 2014(fcst.) 2015(proj.)

Mio tMio t

Source: IGC September report

World

Ending Stocks

of which

8 major exporters

10

World wheat: IGC

World Production

World Consumption

172

199 193 192171

188202 211 (206)

69 77 74 6851 55

65 71 (68)

685679

653

695

655

714720

727 (720)

645

652

657

697

677 696

707

719 (716)

570

590

610

630

650

670

690

710

730

0

100

200

300

400

500

2008 2009 2010 2011 2012 2013(est.) 2014(fcst.) 2015(proj.)

Mio tMio t

Source: IGC September report

World

Ending Stocks

of which

8 major exporters

11

IGC: Wheat production forecast

155

59 60

26 26 26

14 11

0

20

40

60

80

100

120

140

160

180

EU USA Russia Canada Australia Ukraine Kazakhstan Argentina

Mio t

All wheat

Source: IGC September report

2012 2013(est.) 2014(fcst.) 2015(proj.)

12

World maize: IGC World Production

World Consumption

150 148

131 130 131

178

203 199 (199)

43 4329 25 21

3144 41 (41)

800

820830

875

866

9971005

967 (968)

784

821

843875

863

950

980

970 (972)

500

600

700

800

900

1000

0

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013(est.) 2014(fcst.) 2015(proj.)

Mio t

Mio t

Source: IGC September report

World

Ending Stocks

of which US

13

IGC: maize production forecast

340

85

58

30 25

0

50

100

150

200

250

300

350

400

USA Brazil EU Argentine Ukraine

Mio t

Maize

Source: IGC September report

2012 2013(est.) 2014(fcst.) 2015(proj.)

14

World barley: IGC

World Production

World Consumption

34

40

27 2622

26 2630 (27)

13

18

108

5 6 6 6 (6)

155 150

122

134

129

145

141143 (140)

146145

136 135

133141 141 140 (139)

100

110

120

130

140

150

160

0

10

20

30

40

50

60

70

80

90

2008 2009 2010 2011 2012 2013(est.) 2014(fcst.) 2015(proj.)

Mio tMio t

Source: IGC September report

World

Ending Stocks

of which EU

Summary of IGC Report (24-09-2015) 2015/16 Estimates (1) - Total grains: due to higher wheat estimate production was raised for total grains, up by 8 Mt to 1,996 Mt (– 21 Mt or -1,0% from last year). - Wheat: projected output was increased again, by 7 Mt to 727 Mt, which would be the third consecutive record if realized. The increase is mainly due to higher EU estimate, which was raised by 3.6 Mt to 155.5 Mt, only fractionally below last year's record. The wheat crop projections were also increased for Russia (+ 1 Mt to 60 Mt) and Ukraine (+0.5 Mt to 25.5 Mt) as reported yields were better than anticipated. Harvest was also completed in China with production estimated at a record of 129 Mt (+1.5 Mt m/m; +2.2% y/y). Reflecting increased supply wheat consumption was raised by 3 Mt to 719 Mt, a new record. Also record for the ending stocks, which were increased by 5 Mt m/m to 211 Mt.

15

Summary of IGC Report (24-09-2015) 2015/16 Estimates (2) - Maize: harvest is now underway in the Northern hemisphere, while planting has started in South America. Production is now forecast at 967 Mt (- 1Mt m/m; - 38 Mt or – 3.8% y/y). The EU estimate was cut once again, down by 2.5 Mt to 57.6 Mt (-24% y/y) reflecting the effects of the drought. On the other hand small increases were made to the Chinese (+ 1Mt to a record of 227 Mt) and Ukrainian crops (+0.5 Mt to 24.5 Mt). Maize use estimate was reduced by 2 Mt to 970 Mt mainly due to lower feed use in the EU (-3 Mt to 50 Mt m/m; - 10 Mt y/y). World feed use is seen at 560 Mt (-1.8% y/y), which would account for 57% of overall consumption. Ending stocks are now put at 199 Mt (- 4 Mt y/y). - Barley: world production is now estimated at 143 Mt (+2% y/y) following small increases for EU (60 Mt), Russia (17.5 Mt), Ukraine (8.2 Mt) and Canada (7 Mt). World barley consumtpion was raised by 1 Mt again to 140 Mt (- 1 Mt y/y).

16

EU Balance Sheets and Forecasts

17

2014/2015 Marketing Year

Cereals

18

19

EU-28 Cereals balance sheet:Marketing year: 2014/2015

Common (Mio t)

wheat Barley Durum Maize Rye Sorghum Oats Triticale Others EUR 28

Beginning stocks (01.07.2014) 9,1 7,2 0,3 15,3 1,1 0,2 0,6 0,6 0,3 34,7

Usable product ion 148,7 60,2 7,6 77,9 8,7 0,8 7,7 13,0 4,5 329,2

Import 2,9 0,1 2,8 9,4 0,1 0,1 0,0 0,0 0,1 15,6

TOTAL AVAILABILITIES 160,7 67,5 10,7 102,6 9,9 1,1 8,3 13,6 5,0 379,4

USE

- Human 48,0 0,4 8,1 5,0 3,0 0,2 1,1 0,1 0,0 65,7

- Seed 4,7 2,3 0,4 0,5 0,5 0,0 0,5 0,5 0,3 9,6

- Industrial 10,5 9,3 0,1 10,0 1,5 0,0 0,1 0,6 0,1 32,1

of which alcohol 12,6

o.w. bioethanol/biofuel 4,4 0,7 4,7 0,8 0,5 11,0

- Animal feed 52,4 35,9 0,1 60,0 3,5 0,6 4,9 11,3 3,3 172,0

TOTAL USE 115,5 47,8 8,7 75,4 8,5 0,8 6,6 12,4 3,7 279,5

Losses (excl on-farm) 0,9 0,4 0,1 0,6 0,1 0,0 0,1 0,1 0,0 2,2

Solde disponible 44,3 19,3 2,0 26,6 1,3 0,3 1,7 1,1 1,2 97,6

Export 33,3 12,7 1,2 4,0 0,2 0,0 0,2 0,0 0,0 51,7

Ending stocks (30.06.2015) 11,0 6,6 0,8 22,6 1,1 0,3 1,4 1,1 1,2 46,1

Sep-15

EU BALANCE SHEET 2014/2015

• EU Production at record level (including soft wheat and maize)

• + Mainly yield effect

• + higher percentage of feed wheat

• Record EU trade for wheat, barley and maize

• + EU 1st world exporter of soft wheat

• Strong recovery in stocks

2015/2016 Marketing Year

Cereals

21

22

EU 28- 2015 Production Forecasts

EU EVOL CEREALS USABLE PRODUCTIONS

2013/2014 2014/2015 2015/2016 2015/2016 %change

Mio t Aug fcst Sept fcst 2014/2015

TOTAL 304,8 329,2 296,6 301,9 -8,3

Soft wheat 135,1 148,7 140,7 144,6 -2,8

Durum wheat 8,0 7,6 7,9 8,0 5,3

Barley 60,6 60,2 57,2 59,0 -2,0

Maize 66,8 77,9 58,7 58,4 -25,0

Rye 10,1 8,7 8,1 8,1 -6,9

Oats 8,3 7,7 7,5 7,4 -3,9

Sources : DG AGRI -C4

EU-28 Cereals balance sheet:Marketing year: 2015/2016

Common (Mio t)

wheat Barley Durum Maize Rye Sorghum Oats Triticale Others EUR 28

Beginning stocks (01.07.2015) 11,0 6,6 0,8 22,6 1,1 0,3 1,4 1,1 1,2 46,1

Usable product ion 144,6 59,0 8,0 58,4 8,1 0,6 7,4 11,5 4,3 301,9

Import 3,0 0,3 1,8 11,0 0,1 0,2 0,0 0,0 0,1 16,6

TOTAL AVAILABILITIES 158,6 65,8 10,6 92,1 9,3 1,2 8,9 12,6 5,6 364,6

USE

- Human 48,0 0,4 8,1 5,0 3,0 0,2 1,2 0,1 0,0 65,8

- Seed 4,7 2,3 0,4 0,5 0,5 0,0 0,5 0,5 0,3 9,6

- Industrial 10,6 9,3 0,1 10,0 1,5 0,0 0,1 0,6 0,1 32,3

of which alcohol 12,8

o.w. bioethanol/biofuel 4,5 0,7 4,7 0,8 0,5 11,2

- Animal feed 52,0 35,6 0,1 62,3 3,4 0,7 4,8 11,0 3,2 173,1

TOTAL USE 115,3 47,5 8,7 77,8 8,4 0,9 6,5 12,1 3,6 280,8

Losses (excl on-farm) 0,9 0,4 0,1 0,6 0,1 0,0 0,1 0,1 0,0 2,2

Solde disponible 42,4 17,9 1,9 13,7 0,9 0,3 2,3 0,4 1,9 81,6

Export 27,9 9,0 1,2 3,0 0,2 0,0 0,2 0,0 0,0 41,5

Ending stocks (31.08.2015) 127,4 52,5 7,5 16,1 7,8 0,8 7,8 10,4 4,8 235,0

Ending stocks (30.06.2016) 14,5 8,9 0,6 10,7 0,7 0,3 2,1 0,4 1,9 40,1

Sep-15

EU BALANCE SHEET 2015/2016

• Good level of harvest : higher percentage of milling wheat

• Lower feed grain

• Good quality

• Comfortable availabilities

• Slight increase in use for animal feed

• Decrease in stocks

Cereals Prices

25

26

World cereal prices ($/t)

160

180

200

220

240

260

280

300

$ /

to

nn

e

Wheat - Black Sea Milling $ 199

Wheat - US SRW Gulf $ 212

Wheat - FR Cl. 1 Rouen $ 192

Maize - FR Bordeaux $ 171

Maize - US 3YC Gulf $ 177

Barley-FR Dlvd Rouen feed $ 179

27

US CME SRW wheat futures

181

185

194

175

180

185

190

195

200

205

210

0

20

40

60

80

100

120

140

07/10/15 11/10/15 15/10/15 19/10/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 136 to

nnes)

Chicago (CME) SRW futures

Last 14 days

160

180

200

220

240

260

280

300

320

340

0

50

100

150

200

250

300

350

400

07/13 01/14 07/14 01/15 07/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 136 to

nnes)

Chicago (CME) SRW futures

Daily volume

DEC 2015 (R)

MAY 2016 (R)

DEC 2016 (R)

28

US KCBT HRW wheat futures

175

184

199

170

175

180

185

190

195

200

205

210

215

0

5

10

15

20

25

30

35

07/10/15 11/10/15 15/10/15 19/10/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 136 to

nnes) Last 14 days

160

180

200

220

240

260

280

300

320

0

20

40

60

80

100

07/13 01/14 07/14 01/15 07/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 136 to

nnes)

Kansas (KCBT) HRW Futures

Daily Volume

DEC 2015 (R)

MAY 2016 (R)

DEC 2016 (R)

29

EU Milling Wheat Futures

176

184

188

170

175

180

185

190

195

200

0

10

20

30

40

50

60

70

07/10/15 13/10/15 19/10/15

€/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 50 to

nnes)

Last 14 days

160

180

200

220

0

20

40

60

80

100

120

07/13 01/14 07/14 01/15 07/15

€/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 50 to

nnes)

Euronext - NYSE (MATIF Paris) milling w heat futures

Daily Volume

DEC 2015 (R)

MAY 2016 (R)

DEC 2016 (R)

30

World maize export prices (fob, US$ per tonne)

125

175

225

275

325

qu

ota

tio

n in

€o

r $

/ t

on

ne

Black Sea Feed - $ 167

US 3YC Gulf - $ 177

AR Feed Up River - $ 162

BR Feed Paranagua - $ 165

31

CME maize futures

148

155

159

145

150

155

160

165

170

0

50

100

150

200

250

300

350

400

450

07/10/15 11/10/15 15/10/15 19/10/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 127 to

nnes)

Chicago (CME) Maize futures

Last 14 days

125

150

175

200

225

250

275

0

160

320

480

640

800

960

11/12 05/13 11/13 05/14 11/14 05/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 127 to

nnes)

Chicago (CME) Maize futures

Daily volume

DEC 2015 (R)

MAY 2016 (R)

DEC 2016 (R)

32

EU maize futures

161

174

180

155

160

165

170

175

180

185

0

1

2

3

4

5

6

07/10/15 13/10/15 19/10/15

€/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 50 to

nnes)

Euronext - NYSE (MATIF, Paris) maize futures

Last 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 daysLast 14 days

120

140

160

180

200

220

0

2

4

6

8

10

11/13 02/14 05/14 08/14 11/14 02/15 05/15 08/15

€/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 50 to

nnes)

Euronext - NYSE (MATIF, Paris) maize futures

Daily Volume

NOV 2015 (R)

MAR 2016 (R)

NOV 2016 (R)

EU Maize import commitments 2015/16

33

Weekly volume(current MY)

2014/2015

0

1

2

3

4

5

6

7

8

9

10

0

50

100

150

200

250

300

350

400

450

500

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53

To

tal f

or

MY

-m

io to

nnes

We

ek

ly v

olu

me -

' 000 to

nn

es

Week

2015/16 - 2.3 mio t. Trim avg 5MY

34

● Imports: 4.2 mio t (4.5 mio t last year; 2.5 mio t two years ago) 1268 thousand tons soft wheat 425 thousand tons durum wheat 2.3 mio t maize 213 000 tons barley

● Exports: 12 mio t (12.4 mio t last year; 13.8 mio t two years ago) 6.9 mio t soft wheat 4.1 mio t barley 406 thousand tons durum wheat 527 thousand tons maize

● So far, the EU is a net cereal exporter of 7.8 mio t,

against 7.9 mio t last year and 11.3 mio t two years ago.

EU Commitments 2015/2016 (16 weeks)

Oilseeds

Forecasts and prices

35

36

World soya: USDA

World Production

World Consumption

43

60

70

5457

63

78

85 (85)

4 4 6 5 4 35

12 (12)

212

261 264

240

269

283

319 320 (320)

221

238

252

258

261275

298310 (310)

40

95

150

206

261

316

0

25

50

75

100

125

2008 2009 2010 2011 2012 2013 2014 est. 2015 proj.

Mio t

Mio t

Source: USDA October report

World

Ending Stocks

of which US

37

USDA: soybeans production forecast

106100

57

12

20

20

40

60

80

100

120

USA Brazil Argentine China EU

Mio t

Soybeans

Source: USDA October report

2009 2010 2011 2012 2013 2014 est. 2015 proj.

38

EU 28- 2015 Production Forecasts

EU EVOL Oilseeds and Protein crops Production

2013 2014 2015 2015 % change

Mio t Aug fcst Sept fcst 2014/2015

Rapeseed 20,90 24,28 20,81 21,08 -13,2

Sunflower 9,06 9,07 7,70 7,67 -15,5

Soja 1,07 1,85 1,97 1,97 6,6

Linseed 0,14 0,14 0,13 0,13 -11,9

TOTAL 31,17 35,35 30,60 30,84 -12,7

Field peas 1,23 1,28 1,58 1,61 25,8

Broad beans 1,02 1,29 1,20 1,20 -6,6

Sweet lupins 0,13 0,13 0,14 0,14 8,5

TOTAL 2,38 2,70 2,92 2,95 9,5

Sources : DG AGRI - C4

Soybeans export prices $/ton (fob)

39

300

350

400

450

500

550

600

05/2014 07/2014 09/2014 11/2014 01/2015 03/2015 05/2015 07/2015 09/2015

$ /

to

nn

e

US 2Y Gulf - $ 363

Ukraine - $ 358

Brazil Paranagua - $ 366

Argentina Up River - $ 359

40

CME soya futures

329

331

332

332

320

324

328

332

336

340

0

50

100

150

200

250

300

350

400

450

07/10/15 14/10/15

$/t

Da

ily

tra

de

d v

olu

me

(1

00

0 c

on

tra

cts

of

13

6 t)

Chicago (CME) soybeans futures

Last 14 days

300

350

400

450

500

550

600

0

100

200

300

400

500

600

11/11 05/12 11/12 05/13 11/13 05/14 11/14 05/15

$/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 136 t)

Chicago (CME) soybeans futures

Daily volume

NOV 2015 (R)

JAN 2016 (R)

MAR 2016 (R)

NOV 2016 (R)

41

NYSE Euronext rapeseed futures

379

355358

345

350

355

360

365

370

375

380

385

0

2

4

6

8

10

12

14

16

18

07/10/15 13/10/15 19/10/15

€/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 50 t)

Paris (NYSE) rapeseed futures

Last 14 days

300

320

340

360

380

400

420

440

0

5

10

15

20

25

05/13 08/13 11/13 02/14 05/14 08/14 11/14 02/15 05/15 08/15

€/t

Daily

tra

ded v

olu

me (

1000 c

ontr

acts

of 50 t)

Paris (NYSE) rapeseed futures

Daily Volume

NOV 2015 (R)

AUG 2016 (R)

NOV 2016 (R)

Conclusions

- 2015/16 crop year: 3rd consecutive record wheat crop

soybeans also record

Smaller maize crop, however ample supply due to stocks

- Cereals & soybean prices likely to remain low

- Some switch to feed wheat from maize

- Strong US dollar hampers competitiveness for US exports

- RUS/UKR possibly record wheat exports

42

Thank you for your attention!

Balance sheet updates & market presentation

available:

http://ec.europa.eu/agriculture/cereals/balance-sheets/index_en.htm

copyright_borojoint_thinkstockphotos_135155824_low