Wheat By Luke Mason 10 November 2018

Global situation Burdensome global stocks but mainly low quality Large feed grain stocks – US Corn & South American corn production rebound Milling wheat demand hand to mouth amidst tightening supplies of 12.5 pro & higher Quality disasters in all major origins Acreage reductions necessary for next year, happened in US but Russian acreage is higher

Low grade Wheat Supply Ukraine was the early market driver HRW low protein year abundant Russian Feed Wheat Sprouting 6 – 8 MMT Canadian Feed Wheat Durum weather damaged circa 4MMT? Australia Low Pro Likely ASW and lower surplus to be above 18 MMT Argentina 10.5 Pro 3 - 4 MMT

Global Stocks

Global S&D highlights Australia's production reached 35mmt, with 22mmt exports expected Argentina's wheat production at 14.7mmt , while exports higher by +400kmt at 8.5mmt US - Record C/O at 1.186bbu Higher demand yoy from India will lead to an additional +1.5mmt of wheat trade Russia's crop at 71mmt. C/O are record high at close to 15mmt

World Milling Wheat FOB Comparisons

Summary India demand supportive Ukraine exports well ahead of pace Huge wheat stocks globally of low quality wheat Big US corn stocks and competition from Blacksea, Argentina Asian feed wheat demand slow Tight origin price spreads likely to remain amidst stiff competition at destinations

Australia CROP Estimates REGION PRODUCTION QLD 2,374,445 NSW 11,512,955 VICTORIA 4,874,237 SOUTH AUSTRALIA 6,502,337 WESTERN AUSTRALIA 10,127,536 TOTAL 35,391,510

Australia CROP quality CQ - predominantly H2 & APH2 with smaller quantities of lower grades SQ - APW1 & H2 dominant grades probably 60% NNSW - H2/APW1/ASW dominant grades - 20/30/30 with 20 % lower grades SNSW - APW1/ASW1 dominant grades - 30/40 with 10% H2 and 20% lower grades Vic - similar to SNSW.

Australia CROP average protein levels REGION (ASW) PROTEIN LEVELS WESTERN AUSTRALIA 8.9 SOUTH AUSTRALIA 9.3 VICTORIA NEW SOUTH WALES 9.2 REGION (APW) PROTEIN LEVELS WESTERN AUSTRALIA 10.6 SOUTH AUSTRALIA 10.7 VICTORIA NEW SOUTH WALES 10.8

Australia Wheat s&d