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MARKET DEVELOPMENTS
The most recent significant appreciation of soybean and soya meal futures is apparently overdone. We would not be surprised to see a setback on the CBOT soon, triggered by profittaking. Good to excellent ratings of the US soybean crop declined sizably by 4 percentage points in the latest week and by 10 percentage points in the past 4 weeks, but nationwide conditions are currently still much better than last year. Soybean crop conditions have deteriorated significantly below average, however, with good to excellent ratings reported at only 39% in Iowa as of Sept 1 (vs. 58% average), at only 52% in Minnesota (68%), 57% in South Dakota (vs. 60) and 39% in North Dakota (70). Previous yield and crop estimates will have to be reduced. A swing factor is to be seen in the final area available for harvest, which could also turn out somewhat below the USDA estimate of August. The recent hot and dry conditions have reportedly forced soybean and corn crops to mature earlier in several areas, resulting in lower yields. But overall, yield expectations are much higher than last year.

FUTURES: Closes in Chicago and Winnipeg Chicago B.o.T. Soybeans (c / bu) Soya oil (c / lb) Soya meal ($ / ST) Corn (c / bu) Wheat (c / bu) Price ratios:
Nov 2013 soybeans vs. Dec corn Nov 2013 soybeans vs. Dec wheat

Sep 3

Aug 30

Aug 27

Sep 2013 1435.50 1424.00 1414.00 Nov 2013 1386.75 1357.50 1370.50 Sep 2013 Dec 2013 Sep 2013 Dec 2013 Sep 2013 Dec 2013 Sep 2013 Dec 2013 43.82 44.19 485.40 438.90 498.00 475.25 636.50 647.25 2.92 2.14 43.89 44.29 468.20 423.70 495.00 482.00 643.25 654.00 2.82 2.08 44.06 44.52 455.90 430.40 499.75 486.25 650.75 663.75 2.82 2.06

S.American basis vs. nearby CBoT soya oil futures Brazil fob -313 -320 -319 Argentina fob -313 -320 -328 ICE Winnipeg Canola (Can$ / T) Nov 2013 Jan 2014 522.20 528.10 522.30 527.70 529.70 535.90

South American soybean stocks are dwindling at a rapid pace. Strong world import demand (primarily from China) and unusually small US soybean exports boosted South American soybean exports by 4.0 Mn T from last year in August, with year-on-year increases of almost 3.0 Mn T in Brazil and 0.9 Mn T in Argentina. Also in September Argentine and Brazilian soybean exports will again be well up from last year. Oldcrop US soybean stocks are very low and the arrivals of new-crop supplies at export locations will probably be delayed until the last ten days of September because of the late harvesting. For Argentina we consider it possible that soybean exports in September will again be high at between 1.7 and 1.8 Mn T (against only 0.7 Mn T last year). Brazilian exports will probably double from last year to 3.0-3.3 Mn T, according to our preliminary esti-

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DAILY WORLD MARKET PRICES (US-$/T) FUTURES: Closes in Europe, Kuala Lumpur and New York Euronext (Matif); Paris Rapeseed Nov 2013 (Euro/T) Feb 2014 Wheat Nov 2013 (Euro/T) Jan 2014
Sep 3 Sep 2 Aug 27 Sept 3 2013 563 567 984 957 1047 897 897 556 589 585 395 970 1030 870 286 Sept 2 2013 548 F 550 O HoliDay 1037 O 928 S 928 S 539 S 572 S 571 S 395 970 1030 870 286 O O/D S O/D N/D Aug 2013 518(a) 516(c) 967 937 999 880 878 492 526 518 383 959 1055 861 283(d) 482 997(e) 276 829 739(d) 768 706 868 July 2013 567(b) 509(c) 1035 1005 995 881 881 532 563 552 438(c) 1178 1139 1095 305(d) 492 1012 301 833 771 772 703 836

389.50 392.25 188.75 189.00

387.00 390.00 190.00 190.00

389.25 391.50 191.75 191.75

Palm oil on the Bursa Malaysia Derivatives ( BMD ) Ringgit Sep 2013 2420 2430 2466 per Tonne Oct 2013 2419 2430 2458 Nov 2013 2417 2428 2452 Crude mineral oil ( US-$ per barrel ) Brent, ICE Oct 2013 115.68 114.33 WTI, NYMEX Oct 2013 108.54 106.80 Exchange Rate, ECB US-$ per 1 Euro spot Euro per 1 US-$ spot Can$ per 1 US-$ spot 1.3172 0.7592 1.0526 1.3207 0.7572 1.0530 114.36 109.01 1.3338 0.7497 1.0526

Soybeans,Bra,cif Rdm Soybeans,US,cif Rdm Soyaoil,US, fob Gulf Soyaoil,fob Decat,pt Soyaoil,Dutch,exmill Soyaoil, Brazil, fob Soyaoil, Arg, fob Soyapell,47%,Arg,fob Soyameal,Arg,cif Rdm Soyapell,Bra,cif Rdm Sunseed fob BlackSea Sun oil, EU, fob Sun oil, Arg., fob Sunoil,fob Black Sea Sunmeal,HiPro,cifFra Rapeseed,EU,cif Hbg Rapeoil,Dutch,exmill Rapemeal,Hbg,exmill PalmoilCrude cif Eur PalmoilCrude fobIndo PalmOleinRBD fob Mal PalmStearinRBD fobMa Palmkern oil cif Rdm

F O S/O O S S S S S O O/D S O/D N/D

505 S 1014 N/Ja 294 S 840 765 790 730 S O/D S S

495 S 1009 N/Ja 292 S 845 765 795 730 S O/D S S

mates. This will further reduce South American Palmkern exp. 21/23% 200 S 207 S 204 225 stocks and result in very small export Coconut oil, cif Rdm 940 S/O 945 S/O 894 861 supplies in Oct/Dec 2013. Fishmeal,64/65%,Brem 1686 S/D 1717 S/D 1713 1726 It remains to be seen whether the USA will be able to sufficiently increase deliveries of (a) Feb/Mar shipment. (b) Sept shipment. (c) Oct shipment. (d) Oct/ Dec soybeans to the export locations and satisfy shipment. (e) Nov/Jan shipment. most of the world import requirements from October onward. Soya oil futures opened higher yesterday on the CBOT but came under selling pressure and settled marginally or slightly lower. Also South American soya oil4 prices declined yesterday but are still trading US-$ 100-110 over export prices of RBD palm olein. The oil share of the combined product value declined to only 31% for Sept and 33.5% for Dec. Canadian canola production prospects are still favourable, keeping canola futures in Winnipeg on the defensive. Prospects of unusually high production and export supplies of sunflowerseed and products continue to support a bearish scenario with prices of sunflowerseed and oil at discounts to rapeseed and oil as well as to soybeans and oil. However, the absolute price lows might have already been established. Coconut oil prices have appreciated considerably during the past few weeks and are now commanding a premium of US-$ 100 over palm oil in Rotterdam. This has been caused by the prospective decline in Philippine export supplies, as discussed in the following report.

905 S/O

910 S/O

COCONUT OIL
In Rotterdam coconut oil prices rallied by 12-13% within four weeks, reaching US-$/T 945 on Sept 2. The premiums over palm oil and palmkernel oil widened pronouncedly, as shown in the graphs. A key factor behind the independent price strength of coconut oil is to be seen in the seasonal slowdown of Philippine coconut oil production and exports. In August coconut oil exports from the Philippines apparently

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declined to only around 50 Thd T, the lowest level so far this year. For July/Sept 2013 we estimate exports at around 220 Thd T, down from an average 285 Thd T in the preceding three quarters. The subsiding export supply pressure from the Philippines is magnified by unusually low shipments from Indonesia. Indonesian exports are likely to fall to a multi-year low of 630 Thd T in Oct/Sept 12/13, more than 20% less than a year ago. We assume that exports were curbed by a sharp increase in domestic consumption, favoured by the high price attractiveness of coconut oil vis-a-vis palm oil throughout most of this season. We estimate Philippine coconut oil production at a record 1.6 Mn T in Oct/Sept 2012/13, up 0.4 Mn T from a year ago. However, production probably peaked already in Jan/March and the increase was fully accomplished until June, followed by a year-on-year decline in July/Sept 2013. The astounding growth of Philippine copra processing until June is also illustrated by the PHILIPPINES : Exports of Coconut Oil & Meal apparent boost of copra meal exports, which are on (1000 T) Coconut Oil Copra Meal track to reach a record 780-790 Thd T this season, 2013 2012 2011 2010 2013 2012 2011 2010 roughly 70% more than a year ago. But also copra Jan . . . 115* 64 103 147 69 27 20 89 meal exports showed a downtrend to an estimated Feb . . . 87 43 68 75 78 12 28 70 40 Thd T in August versus the monthly average of Mar . . . 137* 64 89 134 83* 21 26 58 more than 70 Thd T in Jan/July and 64 Thd T a year Apr . . . 87 65 98 130 73* 35 48 72 ago. May . . . 122 69 59 131 76* 34 33 75 The further development of coconut oil prices will June . . 63p 81 32 106 60p 43 25 83 strongly depend on how quickly the Philippines step July . . . 111p 106 79 146 61p 64 16 44 up biodiesel admixture from 2% to 5%. The DepartAug . . . 50p 42 56 129 40p 64 37 59 ment of Energy recently called for assessing the Sept . . 74 51 92 91 14 54 impact of a higher biodiesel mandate on supply & Oct . . . 100 70 118 96* 26 41 demand, logistics and prices, before finalizing the Nov . . . 43 46 63 66 20 37 schedule for a higher biodiesel blend. Coconut oil is Dec . . . 101 70 72 43* 21 42 the only feedstock for the Philippine biodiesel Jan/Dec 852 821 1343 596* 314 724 industry and if the admixture mandate increases Jan/Aug 772p 534 584 997 540p 301 233 551 from early 2014 onward, this would sharply lower exports of coconut oil next season even if domestic food use shifts from coconut oil to palm oil. We consider it likely that Philippine coconut oil exports decline by 0.3 Mn T in 2013/14 owing to the double effect of higher requirements for biodiesel production and lower production. Rainfall in the Philippines was again above average so far this U.S.A.: Development of Crop Conditions in % (a) year, but we still consider it likely that copra yields fall 2 0 1 3 2012 short of the high level reached mainly in the first half of Sep 1 Aug25 Aug18 Aug11 Sep 2 Week to: 2013 as a result of the downtrend of the biological Soybeans(b) yield cycle. Poor/very poor 15 13 10 9 37 Fair . . . . . . . . 31 29 28 27 33 Expectations of mounting competition for coconut 43 26 Good . . . . . . . 46 48 50 oil between biodiesel producers and exporters have 11 4 Excellent . . . . 12 14 14 already contributed to the firming of prices. The price premium of currently US-$ 100 versus crude palm oil Corn(b) may widen further, considering that it averaged at USPoor/very poor 16 14 13 11 52 $ 252 in the five years until 2012. Fair . . . . . . . . 28 27 26 25 26 Further independent strength of lauric oil prices is 42 19 Good . . . . . . . 44 44 46 also indicated by the severe decline of Malaysian 14 3 Excellent . . . . 15 17 18 palmkernel oil stocks so far this year. Considering also the anticipated smaller production growth, world Cotton(c) supplies of palmkernel oil will be considerably less Poor/very poor 23 20 23 25 28 ample than a year ago in 2013/14. Fair . . . . . . . . 32 33 31 32 30 36 32 Good . . . . . . . 39 37 34 U.S.A. 9 10 Excellent . . . . 8 9 9 The generally below-normal rainfall pattern is (a)Source: USDA. (b)18-state average. (c)15 states. intensifying the late-season drought across several key growing regions of the US Midwest, resulting in an

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increasing production risk. The major soybean-producing states received only limited rainfall last weekend and insufficient precipitation is forecast for this week at a time of the still ongoing pod-setting. As of Sept 1, 92% of the US soybeans was in the pod-setting phase compared to 98% a year ago and 96% average. However, this important stage of development was only 79% complete in Missouri, 83% in Kansas and 87% in Wisconsin.

As a reflection of the deteriorating crop conditions the USDA reported that 54% of soybeans were in good and excellent state as of Sept 1, down from 58% a week and 64% a month earlier. Yet conditions were much better than last year. Even though the US corn is further advanced in its (a)Mainly transshipments via Canadian ports, mostly to Europe. development, it also could not fully withstand the detrimental impact of heat and insufficient moisture supplies in some important producing regions but (as we expected) suffered less than soybeans during the week in review. The share of corn in good and excellent health declined to 56% as of Sept 1 from 59% a week 64% a month ago. At the same time last year 22% of the crop had been in these categories. Only 1.4 Mn bu of US soybeans was inspected for export in the week to Aug 29, down from 2.5 Mn bu a week and 15.5 Mn bu a year earlier. With only two days missing cumulative soybean export inspections reached 1.312 Bn bu in Sept/Aug 2012/13 compared to 1.365 Bn bu in the previous season.

U.S.A. : Soybean Export Inspections ( Mn bu ) Week ending Since Aug29 Aug30 Aug22 Aug23 Sept 1 2013 2012 2013 2012 2012 2011 Total . . . . 1.4 15.5 2.5 17.5 1312.1 1366.0 W.Europe 105.0 42.9 Canada(a) 14.4 12.9 Mexico . . 0.9 0.7 1.3 1.8 100.0 129.8 . China . . . 8.8 0.1 11.0 783.2 862.9 Indonesia 0.3 2.8 0.2 1.3 58.8 65.6 . Japan . . . 0.7 0.8 54.3 54.2 . . S.Korea 20.9 13.1 . Taiwan . . 2.7 0.1 0.5 39.6 36.9 Oth.Asia 0.1 0.5 0.1 1.9 79.0 64.3 Oth.ctries 0.2 56.9 83.4

PARAGUAY
Soybean exports declined seasonally in August but still reached a record 4.86 Mn T in Jan/Aug 2013, up 2.05 Mn T from last year. A significant expansion of the domestic processing capacity resulted in a boost of soybean crushings to an estimated 1.9 Mn T in Jan/Aug 2013 compared with 0.7 Mn T a year ago. Paraguay has thus become a major exporter of soya oil and meal, shipping record quantities of 0.33 and 1.29 Mn T, respectively, in the first 8 months of this year. Strong world import demand contributed to the record soybean disposals in Jan/Aug 2013, accounting for 75% of this years Paraguayan soybean crop. We expect that soybean exports will decline pronouncedly to only 0.7-0.8 Mn T in Sept/Dec 2013, while exports of soya oil and meal will remain comparatively high.

PARAGUAY: Exports of Soybeans, Oil & Meal (1000 T) Soybeans Soya Oil Soya Meal 2013 2012 2013 2012 2013 2012 Jan . . . 317 211 10 17 69 110 Feb . . . 544 238 32 21 99 54 Mar . . . 720 418 34 16 87 55 Apr . . . 778 407 19 1 127 52 May . . . 769 538 69 8 205 47 Jun . . . 797 391 49 15 191 41 July . . . 591 391 54 4 220 22 Aug . . . 348 221 62 4 297 24 Sept . . 182 3 14 Oct . . . 61 16 26 Nov . . . 93 2 16 Dec . . . 11 18 39 Jan/Dec 3163 123 500 Jan/Aug 4864 2815 328 84 1294 406

UKRAINE
Some late-August rains improved soil moisture, allowing farmers to proceed with the planting of winter rapeseed crop to be harvested in 2014. But as a result UKRAINE: Winter Rapeseed Planted Area (1000 ha) of the partly dry weather in preceding weeks they are 2014F 2013 2012 2011 2010 still way behind the year-ago performance, with only Total area (a) . . . . . 924* 1041 954 1093 1436 394 Thd ha sown as of Sep 2 compared to 614 Thd Winter-killed area . . . . 68 481 293 633 ha registered as of Aug 31, 2012. As reported by the Agricultural Ministry, farmers % of the total . . . . 7% 50% 27% 44% intend to plant 924 Thd ha of winter rapeseed in the (a) Planted in the autumn of the preceding year. autumn of 2013, down from the actual sowings of (*) Official planting intentions. 1041 Thd ha last year. It should be noted, however, that the initial planting intentions of 2012 were at 951 Thd ha noticeably below the final acreage. This might also occur this year but depends on favourable weather in coming days and weeks. The local weather service indicates that the precipitation currently forecast will create optimal conditions for the planting of winter crops in Ukraine. Rapeseed is usually sown until late September.