World durum outlook Chris Gillen, Manager – Marketing & Sales Europe, Middle East and Africa, Latin America

Lisbon, June 2013

Durum market factors 2012-13

•  World grains and oilseeds prices high throughout marketing year

•  Durum fundamentals not supportive of substantial premium

•  Global usage estimated at 35.6 million tonnes

•  Global production estimated at 35.4 million tonnes

•  Global stocks narrow year-on-year (consumption ahead of production)

•  Seeded areas up in North America and EU vs 2011

•  Big 3 (Canada, U.S., and EU) production up 9.6% year-on-year

•  Canadian production up 9.2% year-on-year

•  Global trade falls by 400 thousand tonnes to 7.1 million tonnes

Source: IGC, CWB

Looking Forward 2013-14

•  World grains and oilseeds situation forecast as “relative abundance”

•  Durum fundamentals remain un-supportive of substantial premium

•  Global usage estimated at 35.8 million tonnes

•  Global production estimated lower at 35.1 million tonnes

•  Global ending stocks lower at 6.7 mmt (consumption ahead of

production)

•  Seeded areas down in Canada, U.S., and EU

•  Big 3 (Canada, U.S., and EU) production down 3.3% year-on-year

•  Canada production forecast down 2 % year-on-year

•  Global trade up unchanged at 7.1 million tonnes Source: IGC, CWB

Major Durum Producers (million tonnes)

EU - 27

Australia

Source: IGC, CWB

North Africa Mexico

World Production

Canada Turkey & Syria

U.S.A.

0.5 0.5 0.5

4.2 4.6 4.5

1.8 2.0 2.0

1.4 2.2 1.5 5.1 5.3 4.1

2013-14 35.1 MT 2012-13 35.4 MT 2011-12 36.7 MT

4.9 4.6 4.6

8.3 8.0 8.1

30.0

32.0

34.0

36.0

38.0

40.0

42.0

mill

ion

tonn

es

#VALUE! #VALUE!

Global durum production

Source: IGC, CWB

30.0

32.0

34.0

36.0

38.0

40.0

42.0

mill

ion

tonn

es

Production Consumption

Global durum production and consumption

Source: IGC, CWB

Ending Stocks: Canada, U.S., and EU-27

Source: IGC, CWB

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

(000

Ton

nes)

Canada U.S.A. EU-27

Weather Conditions: Planting issues Canada

Western Canadian production (5-year average, million tonnes)

Spring wheat – 16.85 Canola – 11.39 Barley – 9.17 Durum wheat – 4.35 Peas – 2.95 Winter wheat – 1.17

Durum growing area

Wheat growing area

Winter Precipitation Western Canada Precipitation

% of normal November 1, 2012 – May 26, 2013

Western Canada Precipitation % of normal

May 1 – May 30, 2013

Western Canada Precipitation (mm)

May 24 – May 30, 2013

0

20

40

60

80

100

20-apr 27-apr 4-mag 11-mag 18-mag 25-mag 1-giu 8-giu 15-giu 22-giu

Per c

ent c

ompl

ete

Western Canada Seeding Progress

2013 2012

Normal

Western Canada

Percent of CWAD Grading #1 & 2

0

10

20

30

40

50

60

70

80

90

100

Perc

ent

Average

Weather Conditions: Planting issues USA

North Dakota planting considerations

$6.80

$7.30

$7.80

$8.30

$8.80

$9.30

$9.80

$/bu

HRS Dec. 2013 Futures Spring wheat Insurance Durum Insurance Durum

North Dakota Seeding Weather

US Northern Plains Seeding Progress

0

10

20

30

40

50

60

70

80

90

100

4-apr 11-apr 18-apr 25-apr 2-mag 9-mag 16-mag 23-mag 30-mag 6-giu 13-giu 20-giu 27-giu

% P

lant

ed

North Dakota Durum Planting Progress

2013

2012

Avg.

0

10

20

30

40

50

60

70

80

90

100

11-apr 18-apr 25-apr 2-mag 9-mag 16-mag 23-mag 30-mag 6-giu 13-giu 20-giu 27-giu

% P

lant

ed

Montana Durum Planting Progress

2011

2012

Avg.

US durum area (1,000 acres)

2,91

5

2,59

2

2,73

5

1,87

0 2,15

6

2,72

1

2,55

4

2,57

0

1,36

9

2,12

3

1,60

0

1,57

1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Sow

n A

rea

Source: IGC, CWB

2012-13 Canadian durum: Export Summary

Canadian durum stocks (weekly)

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1+2 4 6 8 10

12

14

16

18

20

23

25

27

29

31

33

35

37

39

41

43

45

47

49

51

1,00

0 to

nnes

Stocks 2011-12 Stocks 2012-13 Stocks 5-year avg

Source: CGC, CWB

Canadian deliveries (weekly)

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008-09 2009-10 2010-11 2011-12 2012-13

% d

eliv

ered

1,00

0 to

nnes

Deliveries To Be delivered % Delivered

Source: CGC, CWB

Canadian durum exports (year-to-date)

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2008-09 2009-10 2010-11 2011-12 2012-13

% e

xpor

ted

1,00

0 to

nnes

Exports To Be exported % Exports

Source: CGC, CWB

Canadian durum exports (weekly)

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

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

1,00

0 to

nnes

Exports 2011-12 Exports 2012-13 Exports 5-year avg

Source: CGC, CWB

Canadian durum exports (yearly through April)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2008-09 2009-10 2010-11 2011-12 2012-13

'000

Ton

nes

Crop Year

EU-27 Algeria Morocco Tunisia Japan Peru Venezuela U.S. Others*

Source: IGC, CWB

Canadian durum exports to EU-27 (yearly through April)

556 679

781 694

812

0

100

200

300

400

500

600

700

800

900

2008-09 2009-10 2010-11 2011-12 2012-13

'000

Ton

nes

Crop Year

Source: IGC, CWB

Canadian durum exports to North Africa (yearly through April)

532 292

110

423 623

375

356 589

358

594 205

123 42

256

76

0

200

400

600

800

1,000

1,200

1,400

2008-09 2009-10 2010-11 2011-12 2012-13

'000

Ton

nes

Crop Year

Algeria Morocco Tunisia Source: IGC, CWB

2013-14 Global durum outlook

Canada durum ending stocks

Source: IGC, CWB

1,7

74

2,4

87

3,2

73

1,2

57

809

2,0

03

2,6

94

1,5

66

1,4

86

1,2

89

1,1

31

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2003-04 2004-05 2006-07 2007-08 2008-09 2009-10 2008-09 2009-10 2010-11 2012-13 2013-14

(000

Ton

nes)

Canadian durum exports

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2009-10 2010-11 2011-12 2012-13* 2013-14**

'000

Ton

nes

Crop Year

EU-27 Algeria Morocco Tunisia Japan Venezuela U.S. Others

Source: IGC, CWB

678

1,0

02

1,0

77

498

152

608

869

874

685

792

735

-

200

400

600

800

1,000

1,200

1,00

0 to

nnes

US Durum Ending Stocks

Source: IGC, CWB

Durum fob prices

$320 $330 $340 $350 $360 $370 $380 $390 $400 $410 $420

US

$/to

nne

Thunder Bay 2 CWAD Duluth 2 HAD French Durum

Durum prices: relative to CWRS

$300

$320

$340

$360

$380

$400

$420

US

$/to

nne

Thunder Bay 2 CWAD Duluth 2 HAD Thunder Bay 2 CWRS 13.0

Durum versus HRS: U.S. elevator prices

-$1.60

-$1.40

-$1.20

-$1.00

-$0.80

-$0.60

-$0.40

-$0.20

$0.00

$0.20

$0.40

$6.80

$7.30

$7.80

$8.30

$8.80

$9.30

$9.80

$/bu

$/bu

HRS Durum Durum - HRS (per bushel)

Durum price forecast

$230

$250

$270

$290

$310

$330

$350

$370

2012-13 Forecast (May - Jun) July13

2013-14 Forecast (Jul - Aug) Sep13

2013-14 Forecast (Sept - Nov) Dec13

2013-14 Forecast (Dec - Feb) Mar14

2013-14 Forecast (Mar - Apr) May14

U.S

.$/to

nne

2 CWAD 13.0 TB (FOB) French Durum

Questions

chris_gillen@cwb.ca