CANADA: OUTLOOK FOR PRINCIPAL FIELD CROPS July 22, 2014

CANADA: OUTLOOK FOR PRINCIPAL FIELD CROPS July 22, 2014 Market Analysis Group/Grains and Oilseeds Division Sector Development and Analysis Directorate/Market and Industry Services Branch Director: Steve Lavergne Deputy Director: Fred Oleson This report provides an update on AAFC s June outlook report for the 2013-14 and 2014-15 crop years in Canada. Information has been incorporated from Statistics Canada s survey-based report on seeded area which was released on June 27, 2014. The Principal Field Crop s, June 2014 report was based on a survey of 24,900 farmers conducted during the May 28 to June 10 period. AAFC has adjusted the projected area harvested in Manitoba and Saskatchewan in an attempt to capture the impact of the torrential rain and flooding in June and July. In Canada, the 2013-14 crop year ends on July 31 for most crops. The crop year was marked by extremely favorable growing conditions, especially in western Canada where production of all crops increased to about 76 million tonnes (Mt) from 57 Mt in 2012. In eastern Canada, production of all crops increased to 21 Mt from 20 Mt in 2012. As a result, total production in Canada increased to 97 Mt from 77 Mt in 2012. However, the increase in the supply of all crops in Canada was much less pronounced than the increase in production because of low carry-in stocks. Although the increase in supply, combined with a very cold winter in western Canada, created a number of issues related to grain transportation and storage, exports of grains and oilseeds are expected to increase by about 8% to almost 40 Mt, representing 45% of production. Record supplies, and lower international prices, have created an environment of grain prices in Canada, especially on-farm, which have averaged significantly lower than the 2012-13 crop year. Carry-out stocks for all crops are forecast at 21.1 Mt versus the average of the previous 10 years of 14.4 Mt. Although significant, the increase in carry-out stocks represents only about 60% of the increase in production. For most crops, the 2014-15 crop year starts on August 1, 2014, in Canada. The June 27 STC area seeded report indicated the total area seeded in Canada is expected to increase slightly due to lower area in summerfallow. The area seeded to grains and oilseeds in Canada is only marginally lower than was indicated in the April seeding intentions report but 3% lower than the actual area seeded in 2013. In western Canada, the area seeded to wheat and coarse grain decreased while the area seeded to canola and soybeans increased. In eastern Canada, the area seeded to corn decreased and was offset by higher area seeded to soybeans. The provincial rates of abandonment are averaged to convert area seeded to area harvested. Normal rates of abandonment have been assumed for all provinces, except for Manitoba and Saskatchewan. Across all crops, average yields are expected to decline, on trend, by about 15% to a more normal level than occurred in 2013. Due to the decline in yields, total crop production in Canada is forecast to decrease by almost 20% to 77.8 Mt. Carry-in stocks from the 2013 crop will be a major component in supply for 2014 which is forecast to decline only slightly. Carry-out stocks are expected to decrease significantly from the 2013-14 level but remain above average. In general, abundant world grain supplies are expected to continue to pressure world prices, but a weak Canadian dollar, which is anticipated to remain at a 5-10% discount to the US dollar, is expected to provide some support to prices in Canada. In general, average grain prices in Canada are forecast to be similar to, or slightly lower than, prices for crop year 2013-14. Statistics Canada will release its survey based estimates of yield and production on August 21, 2014. Page 1 of 9

Canada: Principal Field Crops Supply and Disposition Seeded Harvested Yield Production Imports Supply Exports Domestic Use Carry-out Stocks -------- thousand hectares --------t/ha -------------------------------------- thousand metric tonnes -------------------------------------- Grains And Oilseeds 2012-2013 26,455 25,693 2.76 71,040 1,018 82,460 36,971 36,539 8,951 2013-2014f 26,796 26,059 3.46 90,083 1,122 100,156 40,103 39,128 20,925 2014-2015f 26,186 24,529 2.90 71,169 1,061 93,155 41,625 39,245 12,285 Pulse And Special Crops 2012-2013 3,047 2,990 1.90 5,677 141 7,066 4,955 1,471 640 2013-2014f 2,736 2,700 2.40 6,476 140 7,256 4,913 1,658 685 2014-2015f 3,479 3,295 2.00 6,582 118 7,385 5,190 1,395 800 All Principal Field Crops 2012-2013 29,502 28,682 2.67 76,716 1,159 89,526 41,926 38,010 9,591 2013-2014f 29,532 28,759 3.36 96,559 1,262 107,412 45,016 40,786 21,610 2014-2015f 29,665 27,824 2.79 77,751 1,179 100,541 46,815 40,641 13,085 Source: Statistics Canada, f: forecast by Agriculture and Agri-Food Canada Canada: Outlook for All Principal Field Crops for 2013-14 AAFC Crop Year Reports - Jan. 2013 to Dec. 2013 The table below shows the extent to which growing conditions were favorable in 2013. For the January to August reports, AAFCs forecasts of yield and rates of abandonment were based on historical trends. However, AAFC s September report was based on Statistics Canada s August 25 report which provided the results of its survey of producers regarding area, yield and production. Subsequent reports progressively increased the estimate for yields. Seeded Yield Production Supply Carry-out Stocks Date of report mln ha t/ha ---------------- million metric tonnes ---------------- January 29.6 2.76 78.7 90.5 11.7 May 29.5p 2.81 79.4 89.6 11.8 July 29.6p 2.79 79.4 89.3 11.1 August 29.6p 2.79 79.5 89.5 11.2 September 29.4p 2.90p 82.0p 92.3 12.4 October 29.4p 3.11p 87.0p 97.6 15.7 November 29.4p 3.11p 87.0p 97.6 15.7 December 29.5p 3.36p 96.6p 107.1 22.5 Supply=Carry-in Stocks + Production + Imports p: Statistics Canada survey data, AAFC September report is first STC survey based estimate of yield. Source: AAFC monthly crop outlook reports - AAFC forecasts unless noted otherwise. Page 2 of 9

ALL WHEAT DURUM For 2013-14, exports are forecast to rise by 10% from 2012-13 to 4.65 Mt due to strong world demand and Canada s higher share of world durum production. Carry-out stocks are forecast to increase by 74% to 2 Mt. Crop year average Canadian producer prices for durum are forecast to fall from 2012-13 due to the higher world and Canadian supply and carry-out stocks. Durum spot prices started falling in August 2013 and reached a low point in February of 2014. There has been a 20% increase in prices since February due to strong demand and an improvement in shipments, especially since the re-opening of the St. Lawrence Seaway to Thunder Bay in early April after the winter closure. Most Canadian durum exports flow through the east coast via the St. Lawrence Seaway. More recently, prices have been supported by concerns about the durum crops in Spain, Italy and North Africa. World durum production increased by 2.8 Mt from 2012-13 to 38 Mt. Supply increased by 2.1 Mt to 44.6 Mt, as higher production was partly offset by lower carry-in stocks. Use is forecast to increase by 1.2 Mt to 37.2 Mt and carry-out stocks are forecast to rise by 0.8 Mt to 7.4 Mt. United States (US) durum production fell by 25% to 1.68 Mt due to a drop in seeded area. For 2014-15, Canadian durum seeded area fell by 3% from 2013-14 because of lower prices and higher carryin stocks. The durum area in Saskatchewan, which accounts for 87% of the seeded area, fell by 4%, while the seeded area in Alberta was unchanged from 2013-14. Production is forecast to fall by 23% to 5.04 Mt due to the lower area and a decrease to more normal yields from the record yields of 2013-14. Supply is expected to decrease by 8% as higher carry-in stocks partly offset the fall in production. Exports are forecast to increase by 2% from 2013-14 mainly because of lower production in the EU. Carry-out stocks are forecast to decrease by 30% to 1.4 Mt. Crop year average Canadian producer prices for durum are forecast to increase from 2013-14 due to lower world and Canadian supply and carry-out stocks, and the forecast for a weaker Canadian dollar. World durum production is forecast to decrease by 2.2 Mt from 2013-14 to 35.8 Mt, primarily due to lower production for Canada. Supply is forecast to decrease by 1.4 Mt to 43.2 Mt as the lower production is partly offset by higher carry-in stocks. Use is expected to fall by 0.6 Mt as stable food use is more than offset by lower feed use. Carry-out stocks are forecast to fall by 0.8 Mt to 6.6 Mt. US durum production is expected to fall by 3% to 1.63 Mt due to lower yields as the seeded area was only marginally lower. WHEAT (excluding durum) For 2013-14, exports are forecast to increase 14% from 2012-13 to 17.5 Mt due to growing world demand in the food market. Domestic use is expected to increase by 9% with growth in all markets: food, feed and industrial. Carry-out stocks are forecast to rise by 228% to 8.9 Mt. Crop year average Canadian producer prices for wheat are forecast to decrease from 2012-13 due to higher world and Canadian supply. Canadian wheat prices started falling in June 2013 and reached a low point in January-February 2014. Prices started recovering in March 2014 in line with the higher Minneapolis futures prices, which were supported mainly by strong demand and a second year of drought in the US southern plains. However, prices fell again in late May as spring wheat seeding progress improved in the northern US plains and in Canada, and the world winter wheat crop, outside the US southern plains, was in mostly good condition. World all wheat (including durum) production increased by 57 Mt from 2012-13 to 714 Mt. The supply rose by 35 Mt to 889 Mt, as the increase in production was partly offset by lower carry-in stocks. use is forecast to rise by 24 Mt to 703 Mt. Carryout stocks are forecast to rise by 11 Mt to 186 Mt. All wheat production in the US decreased by 3.7 Mt to 58 Mt. Domestic feed use fell because of a recovery in corn production. Exports rose due to stronger world demand. Carry-out stocks decreased by 3.4 Mt to 16.1 Mt. For 2014-15, Canadian wheat seeded area fell by 7% from 2013-14 because of lower prices and higher carryin stocks. Canadian winter wheat area decreased by 8%, with a 15% decrease for eastern Canada and no change for western Canada. However, 20% of the area was reseeded to other crops due to winter damage, which was higher than a year ago. Spring wheat area fell by 7%, with an 8% decrease for Saskatchewan and Alberta and 7% for Manitoba. The spring wheat area rose by 12% for British Columbia and by 11% for eastern Canada. Saskatchewan accounts for 47% of the total wheat seeded area, Alberta for 31%, Manitoba for 15%, Ontario for 5% and other provinces for 2%. The area Page 3 of 9

seeded to hard red spring wheat fell by 7% but it still accounts for 77% of the total wheat area, marginally higher than for 2013-14. The winter wheat area, mostly hard red winter and soft red winter with soft white winter, accounts for 11% of the total wheat area, Canada Prairie Spring for 6%, soft white spring for 4% and other wheat, general purpose and extra strong, for 2%. The seeded area for Canada Prairie Spring wheat rose by 8% from 2013-14, the area for general purpose wheat rose by 3% and for extra strong wheat by 2%. The area for soft white spring wheat fell by 32% as prices for this class of wheat fell more during 2014-15 than for other classes. Production is forecast to fall by 27% to 22.7 Mt due to the lower seeded area and a decrease to more normal yields from the record yields of 2013-14. Supply is expected to decrease by 10%, as the decrease in production is partly offset by higher carry-in stocks. Domestic use is expected to fall slightly due to lower feed use. Exports are forecast to rise by 1% to 17.7 Mt due to growing demand in the food market. Carry-out stocks are forecast to fall by 37% to 5.6 Mt. Average Canadian producer prices for wheat are forecast to increase from 2013-14 due to lower US and Canadian supply, and the forecast weaker Canadian dollar. World all wheat (including durum) production is forecast to decrease by 9 Mt to 705 Mt as a higher area is more than offset by lower yields, which set a record in 2013-14. Supply is forecast to fall by 1 Mt to 889 Mt, as lower production is partly offset by higher carry-in stocks. use is forecast to decrease by 5 Mt to 700 Mt, as higher food use is more than offset by lower feed use. Carry-out stocks are forecast to increase by 5 Mt to 189 Mt. US winter wheat seeded area decreased by 2% from 2013-14 while the spring wheat area increased by 9%, resulting in an increase of 1% for area seeded to all wheat. Production is forecast to decrease by 3.8 Mt to 54.2 Mt due to drought in the southern plains. Domestic use is expected to fall because of lower feed use. Exports are forecast to decrease due to lower supply and more competition in world markets. Carry-out stocks are forecast to increase by 1 Mt to 18 Mt. Stan Skrypetz: Wheat Analyst Stan.Skrypetz@agr.gc.ca COARSE GRAINS BARLEY For 2013-14, exports are forecast to decrease by 4% to 2.1 million tonnes (Mt) due to good supplies of world feed and malting barley. domestic use is forecast to increase by 14% to 6.9 Mt due mainly to increased feed use. Carry-out stocks are forecast to increase sharply from the record low of 2012-13 and are forecast to be higher than both the previous five and ten-year averages. Domestic feed barley prices have fallen from 2012-13 due to lower US coarse grain prices. The Lethbridge cash barley price fell nearly C$20/t in June mirroring US corn prices. A rapid barley seeding pace in western Canada and good crop conditions throughout the month also contributed to the fall in the price. Canadian exports of malting barley increased sharply in April as exports to Japan, the US and China increased. For 2014-15, seeded area decreased by 14% to 2.5 million hectares (Mha) from 2013-14 due to low farm prices and high carry-in stocks. Based on average rates of abandonment and yields, production is forecast to fall by 28% to 7.3 Mt, the lowest since 1982-83. Despite high carry-in stocks, supply is forecast to fall by 14%. domestic use is forecast to fall marginally, mostly due to lower feed use. Exports are forecast to remain unchanged at 2.1 Mt. Carryout stocks are forecast to fall sharply to a record low of 0.7 Mt due to lower supply. Despite forecasts for lower North American and world barley production domestic, world barley prices are expected to be pressured by the burdensome large world supplies of coarse grains. The USDA has forecast a decline in US barley area but, with higher beginning stocks and imports, US supply will decrease only 6% from 2013-14. With the prospect for a large US corn crop and subsequent price decline, the USDA is projecting the average US barley price to decrease by over 20%. However, Canadian prices will be supported by a much sharper decrease in Canadian barley carryout stocks and forecasts for strong North American cattle and hog prices into 2014-15. The Lethbridge price is forecast to decrease only slightly from 2013-14. With tighter domestic barley supplies, local feed barley prices should increase to a level similar to the average of the previous five-year average. Page 4 of 9

CORN For 2013-14, exports are expected to fall by 28% from the record high in 2012-13, due to the recovery in US and world corn production. Imports are forecast to rise sharply due to early season logistics problems but remain well below the previous 5 and 10-year averages. domestic use is forecast to rise marginally following trend increases to livestock feeding and industrial demand. Carryout stocks are expected to rise sharply to a record 3.1 Mt. The Chatham in-store elevator price is forecast to fall in line with lower US corn prices. This is largely the result of the large US and world corn crops. Near the end of June, the spot US corn futures finally began to trade at a slight discount to new crop prices. Old and new crop basis levels in the Chatham market remain very flat. The Chatham nearby basis level is reaching the time of year where its seasonal value strengthens. However, with record 2013-14 corn carryout supplies and a forecast for strong 2014-15 total supplies, there is little reason for the market to build in a basis premium. Due to the increased domestic supply of corn in Eastern Canada, imports of corn from the US are now only about one-third of the previous 10-year average. For 2014-15, seeded area decreased by 15% from the record area of 2013-14 due to the lower US corn prices and a strong recovery in soybean prices. seeded in Ontario and Quebec each fell by 15% as growers switched area into soybeans. Production is forecast to fall by 20% to 11.3 Mt due to the lower area and yield. However, due to record high carry-in stocks, supply is forecast to fall by only 8.5%. domestic use is forecast to remain relatively unchanged as ethanol production, industrial use and livestock feeding remain relatively flat. Exports are forecast to fall by 20% to 1.0 Mt. Carryout stocks are expected to decease sharply but remain historically high at 1.9 Mt. Prices are forecast to decrease due to large total supplies of North American and world coarse grains and a general downturn in US corn prices. US corn crop conditions at this time are marginally better than they were at this time last year with more than 75% of the US corn crop rated good or excellent. With the prospect for a large US corn crop and subsequent price decline, the USDA is projecting the average US corn price to fall 10%. Although small in comparison to the world s leading corn exporters, in the past few years Canada has sharply increased corn exports to niche markets. OATS For 2013-14, exports are expected to remain fairly stable due to relatively flat US food and industrial demand. oat exports, grain and oat products, remain below the previous five-year average mainly due to a slow start to the shipping season in August and September caused by the near record low oat carry-in stocks. domestic use is forecast to increase 8% mainly due mainly to higher feed use with relatively unchanged food and industrial use. Carryout stocks are forecast to rise sharply to 1.3 Mt, near record levels, and remain well above both previous five and ten-year carryout averages. Since the beginning of April, the US new-crop oat futures prices have traded in a narrow range but expectations of a large US corn crop will pressure US corn and oat prices. For 2014-15, Canadian oat seeded area fell marginally and, combined with a return to trend yields, production is forecast to fall by 22% to 3.0 Mt. However, supply is forecast to fall only marginally due to near-record carry-in stocks. domestic usage is forecast to rise marginally due to trend growth in feed and other use. Exports are forecast to rise by 3% to 2.1 Mt due to low US oat carry-in stocks and an improvement in trade and logistic patterns. Carryout stocks are expected to fall by only 6% to 1.2 Mt and remain at near record levels due to the large total supply and trend disappearance. Canadian oat prices are forecast to fall due to the burdensome Canadian oat supply and pressure from US corn and other coarse grain prices. For the US, the USDA has forecast a 15% rise in oat production but a marginal increase in supply. US oat prices are expected to decrease by over 20% from 2013-14. With high Canadian carry-in stocks for 2014-15, a similar North American oat supply there is the potential for strong exports at the beginning of the crop year, which will help smooth out the month-tomonth predictability of supply to US end users. The better movement should also help remove some of the basis volatility seen in local cash prices across the Canadian prairies in 2013-14. RYE For 2013-14, exports are expected to fall by 34% due to the lower exportable supply. domestic usage will fall by 17% to near record low levels, as the smaller total supply limited both feed and industrial use. Rye carryout stocks are forecast to decrease to the near Page 5 of 9

record low level of 25 thousand tonnes (kt). Due to the tight supply and good demand, Canadian rye prices remain high. Despite the low Canadian rye supplies, movement to the continental US remains steady albeit at a much slower pace than the previous five-year average. There are also small container sized loads that are being exported offshore to a few countries with Korea being the main destination. Rye pricing remains steady across the prairies and the market has priced in a premium for off-farm movement to encourage farm storage. According to Statistics Canada, for 2014-15, Canadian rye seeded area rose by 6% from 2013-14 to 115 kha. Production is forecast by AAFC to rise by 5% due to the larger area and yields similar to last year. Due to near record low carry-in stocks and the slight increase in production, total supply is forecast to fall by 4% to the lowest level since 2002-03. Exports are forecast to decrease marginally to the lowest level in the past five years, but remain well above record low levels in drought-affected years. domestic use is forecast to fall marginally due to the very tight total supply situation limiting both feed and industrial use. Rye carryout stocks are forecast to fall for the third consecutive year to a record low 20 kt. Rye prices are forecast to increase from 2013-14 due to the near record low total supply and similar export demand. At this time, Saskatchewan rye crop conditions were 50% good to excellent compared to 73% a year ago at this time due to excess moisture and standing water. The late start to the spring growing season will likely mean that the rye harvest will begin one to two weeks later than average, with new crop exportable supplies becoming available into August. Despite the general decrease in expected prices for coarse grains, rye prices are expected to increase due to the near record low supply and strong domestic and world demand. Bobby Morgan: A/Coarse Grains Analyst Bobby.Morgan@agr.gc.ca OILSEEDS CANOLA For 2013-14, seasonal records were set in May and June for producer deliveries and exports. This was largely related to favorable weather conditions and large supplies. Exports are forecast to increase by 16% from 2012-13, and are excepted to set a near record of 8.5 Mt on strong world demand for vegetable oils and protein meal. Domestic crush is forecast to rise by 4% due to strong demand for vegetable oil, attractive crush margins, improved logistics and large farm stocks. The average weekly crush pace strengthened during the May-June period despite the seasonal closure of many plants to conduct maintenance. Carry-out stocks are forecast at a record 3.0 Mt for a stocks-to-use ratio of 19% versus 4% for last year and high of 22% set in 2009-10. The carry-out is not considered burdensome by the industry as most is expected to be marketed early in the crop year. Canola prices, cash track Vancouver, are trending around $500/t compared to the low of about $450/t last winter and $650/t for 2012-13. For 2013-14, prices are forecast to average $495/t-$525/t under pressure from increased world supplies and lower prices for palm oil and soyoil. For 2014-15, seeded area in Canada is forecast at 8.2 mln ha compared to the record of 8.9 mln ha seeded in 2012-13. By province, Saskatchewan accounts for more than one-half of the area in Canada, at 4.3 million hectares (Mha), followed by Alberta at 2.5 Mha and Manitoba at 1.3 Mha. Crop conditions are above average following delayed seeding due to a wet spring and cool temperatures. Excessive moisture along the south-eastern Saskatchewan, south-western Manitoba border resulted in some area remaining unseeded by the crop insurance deadline. The potential for disease and insect outbreaks is high given the cool and moist conditions. Flea beetle outbreaks were extensively reported on with some farmers having to spray their fields several times. Production is forecast at 14.5 Mt compared to the record of 18.0 Mt grown in 2013. Supply is forecast to decrease as sharply higher carry-in stocks partly offset the decline in output. Page 6 of 9

Exports are forecast to increase slightly, to a record 8.8 Mt and domestic crush is forecast to rise to 7.5 Mt as the large carry-in stocks support an active shipping and crush pace prior to harvest. Carry-out stocks are forecast to decline significantly to 1.1 Mt but remain sufficient to permit early season demand prior to the 2015-16 harvest. Canadian canola prices are forecast to decline from 2013-14 in the light of lower world prices for soyoil and palm oil. FLAXSEED (excluding solin) For 2013-14, exports are forecast to rise to 0.58 Mt on support from strong Chinese buying and readily available domestic stocks. Domestic use is forecast to increase by 11% while carry-out stocks are forecast to increase to 0.13 Mt. As a result, average flaxseed prices are forecast to fall sharply, with losses moderated by a late-crop year rally. For 2014-15, area seeded in Canada is estimated at 0.64 Mha, up by about 50% from last year on support from attractive net returns relative to other crops. seeded by province is: 550,000 hectares (ha) for Saskatchewan, 36,000 ha for Manitoba and 53,000 ha for Alberta. Production is forecast at 0.83 Mt, up from 0.71 Mt in 2013-14 as the gains in area are partly offset by lower yields. Supply is projected to rise to almost 1.0 Mt from 0.80 Mt in 2012-13 as higher carry-in stocks supplement the rising output. Exports are forecast to rise by 39% to a 17 year high of 0.80 Mt while crop year average prices fall under pressure from lower world oilseed prices. SOYBEANS For 2013-14, exports are forecast to rise marginally from last year to 3.4 Mt due to higher world demand and ample domestic supplies. Domestic crush is forecast to rise by 4% on attractive crush margins and steady domestic soyoil consumption. Carry-out stocks, mostly in commercial positions are forecast up, to 0.25 Mt. Prices are expected to increase slightly from 2012-13 as a result of the unexpectedly strong late season rally in world soybean prices. For 2014-15, the area seeded to soybeans is estimated up 24% to a record 2.3 mln ha on support from high prices, ease of marketing and a late spring which supported a switch out of corn. Most of the crop was planted ahead of the insurance deadline and crop ratings are better than normal. Production is forecast to increase to a record 6.1 Mt from 5.2 Mt for 2013-14 due to higher seeded area. Supply is also forecast to increase significantly which will support increased exports of a record 4.3 Mt. A strong post-harvest shipping pace is anticipated for eastern Canada. The pace of shipments from western Canada is expected to be spread out over the crop year. The major export destinations are the US and the Pacific ports. Carry-out stocks are forecast at 0.25 Mt. Prices are forecast to fall sharply in the light of large US and South American soybean supplies. Chris Beckman: Oilseed Analyst Chris.Beckman@agr.gc.ca PULSES AND SPECIAL CROPS DRY PEAS For 2013-14, Canada s exports are expected to be the same as the 2012-13 level at 2.65 Mt. Lower exports to India and Bangladesh have been offset by an increase in exports to China. This is largely due to the large domestic pulse crop in India and increased export competitiveness from the US. Carry-out stocks in Canada are expected to increase to burdensome levels despite higher expected domestic use. The average dry pea price is expected to fall from 2012-13, due to large expected carry-out stocks in 2013-14. Green dry peas prices are expected to maintain a crop year premium of $175/t over yellow dry peas, which are above the historical average, but below the record $200/t premium green peas had over yellow peas in 2012-13. During the month of June, Saskatchewan green pea farmgate prices fell about C$5/t while yellow pea farmgate prices fell about C$10/t. This was largely due a significant portion of the Canadian dry pea crop is in good to excellent condition and the expectation that there will be an increase in Canadian green pea production for 2014-15. Page 7 of 9

For 2014-15, dry pea seeded area in Canada rose to 1.6 Mha, up over 20% from 2013-14 because of higher returns relative to other crops and continued recognition of the benefits of dry peas as part of crop rotation plan. Saskatchewan accounts for two-thirds of the dry pea area, Alberta nearly one-third, with the remainder seeded in Manitoba and British Columbia. Production is forecast by AAFC to fall marginally to 3.76 Mt as a return to average yields is expected to offset the rise in area. However, supply is forecast to rise by 3% to a record 4.2 Mt due to the large carry-in stocks and near record production. Exports are forecast to increase to 2.9 Mt, with India, China and Bangladesh continuing to be Canada s top markets. Carry-out stocks are also forecast to rise sharply for the second consecutive year. The average price is expected to fall from 2013-14, due to the record supply and larger expected carry-out stocks in Canada. In the US, area seeded to dry peas for 2014-15 is forecast by the USDA to rise by 8% from 2013-14. This is largely due to an expected rise in area in Montana and North Dakota. Assuming normal yields and abandonment, US dry pea production is forecast by AAFC to rise by 8% to a near record 0.78 Mt. The US has been successful in exporting small amounts of dry peas to common Canadian exports markets in China and India and it is expected the US will continue to its expand its market share in 2014-15. LENTILS For 2013-14, lentil exports are forecast to be slightly lower than 2012-13 at 1.6 Mt. Of this total, 0.9 Mt are red lentil types with the remaining 0.7 Mt consisting of the green lentil types. The main markets continue to be India, Turkey and EU-27. domestic use is forecast to rise to a record 0.47 Mt. Carry-out stocks are forecast to decrease to the lowest levels since 2009-10. The average Canadian lentil price is forecast to be similar to 2012-13 as carry-out stocks tighten for the second straight year. Red lentil prices are forecast to have a small premium over large green lentil prices for the first time since 2008-09. During the month of June, Saskatchewan large green lentil farm gate prices and red lentil farm gate prices both fell C$25/t. This was largely due to the confirmation of a large increase in the Canadian lentil seeded area by Statistics Canada for 2014. For 2014-15, Canadian lentil seeded area increased to 1.31 Mha, due to higher forecasted returns, particularly for red lentil types, compared to other crops. This is a 35% rise in seeded area from 2013-14, with the majority of the increase in red lentil types. By province, Saskatchewan accounts for 96% of the lentil area, with the remainder seeded in Alberta. Production is forecast by AAFC to increase by 6% to a record 2.0 Mt, with supply falling marginally due to lower carry-in stocks. Exports are forecast to remain unchanged at 1.6 Mt. Carry-out stocks are forecast rise to 0.15 Mt. The average price is forecast to fall only marginally from 2013-14 if Canadian export demand continues to remain strong for the third consecutive year. In the US, the area seeded to lentils for 2014-15 is forecast by the USDA at 0.3 mln acres, down 12% from 2013-14 due to lower area seeded in Montana. Assuming normal yields and abandonment, 2014-15 US lentil production is therefore forecast by AAFC at 0.2 Mt, down 19% from this year. The main US export markets for lentils are expected to continue to be India and the EU-27. DRY BEANS For 2013-14, dry bean exports are expected to be similar to 2012-13 despite the limited Canadian supply. The US and the EU-27 remain the main markets for Canadian dry beans, with smaller volumes exported to Japan, the Middle East and countries in Africa. Smaller North American supply is expected to continue to support overall US and Canadian dry bean prices for the remainder of 2013-14. For 2014-15, the area seeded in Canada increased sharply from 2013-14 to 140 kha because of higher potential returns compared to other crops, particularly soybeans and corn. By province, Ontario is expected to account for 42% of the dry bean area, Manitoba 42%, Alberta 14% with the remainder seeded in Quebec. Production is expected to rise by 23% to 0.29 Mt, but supply is expected to increase by only 6%, due to tight carry-in stocks. Exports are forecast to fall marginally due to lower expected demand from the US. As a result, carry-out stocks are also expected to increase. The average Canadian dry bean price is forecast to decrease due to higher expected supply in North America, particularly for white pea, pinto and black bean types. In the US, area seeded to dry beans is forecast by the USDA to rise by 34% to 1.5 mln acres due to higher area seeded in North Dakota. Assuming normal yields and abandonment, 2014-15 US total dry bean production (excluding chickpeas) is therefore forecast by AAFC at 1.2 Mt, up 27% from 2013-14. Page 8 of 9

CHICKPEAS For 2013-14, Canadian chickpea exports are expected to fall sharply to 45 kt. Increased export competition from India and Mexico have reduced demand from the Middle East. The EU-27 and the US continue to be the main markets for Canadian chickpeas. As a result of the increase in supply and lower exports, carry-out stocks are also expected to increase to the second highest level on record. The average price is forecast to decrease sharply, due to higher Canadian and world supply. For 2014-15, the area seeded was unchanged from 2013-14 due to record yields achieved in 2013-14 despite falling North American prices. By province, Saskatchewan is expected to account for 95% of the chickpea area, with the remainder seeded in Alberta. Production is therefore expected to fall by 16% to 148 kt. Supply, however, is forecast to rise from last year, by 19% due to the burdensome carry-in stocks. Exports are forecast to be rise from 2013-14 and carryout stocks are forecast to remain unchanged. The average price is forecast to increase, due to lower world supply and expectations of improved import demand from the Middle East. US chickpea area for 2014-15 is forecast by the USDA at a record 0.22 mln acres, up marginally from 2013-14. This is largely due to an expected rise in area in Idaho. Assuming normal yields and abandonment, 2014-15 US chickpea production is therefore forecast by AAFC at 0.16 Mt, similar to the record crop from last year. MUSTARD SEED For 2013-14, Canadian mustard exports are forecast at 130 kt, up from 2012-13. The US and the EU-27 have been the main export markets for Canadian mustard seed. Carry-out stocks are forecast to decrease for the second consecutive year. Prices are forecast to fall below 2012-13 due to pressure from increased competition from the Black Sea region. For 2014-15, the area seeded rose to a four year high of 188,000 ha, due to support from near record yields the previous year and prospects for good returns this year. By province, Saskatchewan accounts for nearly 67% of the mustard seed area, with the remainder seeded in Alberta. Despite the sharp rise in area, production is forecast to increase by only 32 kt, to 187 kt on lower expected yields. Supply is expected to rise slightly, to 0.2 Mt, however, due to lower carry-in stocks. Exports are expected to be unchanged at 130 kt and carry-out stocks are forecast to rise. The average price is forecast to fall from 2013-14. CANARY SEED For 2013-14, exports are expected to increase from 2012-13 due to higher EU-27 demand, mostly from Italy and Belgium. The EU-27 and Mexico have remained the main markets, followed by the US. Carryout stocks are expected to tighten. The average price is forecast to decrease, despite tight carry-out stocks. For 2014-15, the area seeded rose by 33%, to 113 kha, due to good returns relative to other crops and lower carry-in stocks. Production is expected to rise by 7% to 140 kt. However, supply is forecast to decrease marginally on low carry-in stocks. Exports are expected to decrease due to the limited supply. Carry-out stocks are expected to remain tight. The average price is forecast to increase from the 2013-14 level. SUNFLOWER SEED For 2013-14, sunflower seed exports are forecast to increase to 50 kt due to increased demand from the US. As a result, carry-out stocks are expected to tighten. The US and the Middle East have been Canada s main export market for sunflower seed. The average Canadian price for sunflower seed is forecast to increase from 2012-13, despite forecasts for a larger world sunflower seed carry-out stocks. For 2014-15, the area seeded rose by 46% to 41 kha, following two years of above trend yields and expectations for good returns. Production is forecast to rise significantly to 61 kt, assuming average yields, and supply is expected to rise marginally to 97 kt, compared to 2013-14. Exports are expected to remain unchanged but carry-out stocks are forecast to increase. The average price is forecast to fall from 2013-14 due to expectations for higher North American sunflower seed supply. Stronger oil type prices are anticipated but this is expected to be offset by lower confectionery prices in the US and Canada. US sunflower seed area for 2014-15 is forecast by the USDA at 1.7 mln acres, up 8% from 2013-14 as higher area in North Dakota more-than offsets lower area in South Dakota. These are the two largest sunflower seed growing states. The area seeded to oil type varieties is expected to increase marginally to 1.34 mln acres and the area seeded to confectionery type varieties is forecast to rise significantly. Assuming normal yields and abandonment, 2014-15 US sunflower seed production is forecast by AAFC to rise by 17% to 1.1 Mt. Bobby Morgan: Pulse and Special Crop Analyst Bobby.Morgan@agr.gc.ca Page 9 of 9

CANADA: GRAINS AND OILSEEDS SUPPLY AND DISPOSITION July 22, 2014 Grain and Crop Year (a) Seeded Harvested Yield Production Imports (b) Supply Exports (c) Food & Industrial Use (d) Feed, Waste & Dockage Domestic Use (e) Carry-out Stocks Average Price (g) ---------- thousand ha ------------------------------------------------------------ t/ha thousand metric tonnes ------------------------------------------------------------ $/t Durum 2012-2013 1,894 1,878 2.46 4,627 36 6,149 4,245 235 322 751 1,152 290 2013-2014f 2,009 1,997 3.26 6,505 10 7,666 4,650 235 591 1,016 2,000 215-225 2014-2015f 1,943 1,905 2.65 5,040 10 7,050 4,750 240 466 900 1,400 215-245 Wheat Except Durum 2012-2013 7,736 7,619 2.96 22,579 38 27,063 15,349 3,348 3,584 7,813 3,900 285 2013-2014f 8,616 8,444 3.67 31,025 40 34,965 17,500 3,400 4,345 8,565 8,900 200-210 2014-2015f 7,979 7,360 3.08 22,700 40 31,640 17,700 3,420 4,072 8,340 5,600 200-230 All Wheat 2012-2013 9,630 9,497 2.86 27,205 74 33,211 19,595 3,583 3,905 8,564 5,052 2013-2014f 10,626 10,441 3.59 37,530 50 42,632 22,150 3,635 4,937 9,582 10,900 2014-2015f 9,922 9,265 2.99 27,740 50 38,690 22,450 3,660 4,538 9,240 7,000 Barley 2012-2013 2,997 2,751 2.91 8,012 19 9,227 2,184 157 5,654 6,060 983 279 2013-2014f 2,866 2,652 3.86 10,237 17 11,237 2,100 159 6,481 6,887 2,250 175-195 2014-2015f 2,464 2,230 3.29 7,340 18 9,608 2,100 154 6,405 6,808 700 165-195 Corn 2012-2013 1,434 1,418 9.21 13,060 507 14,933 1,728 5,315 6,325 11,656 1,549 257 2013-2014f 1,493 1,480 9.59 14,194 600 16,343 1,250 5,400 6,627 12,043 3,050 160-180 2014-2015f 1,265 1,240 9.12 11,305 600 14,955 1,000 5,400 6,639 12,055 1,900 150-180 Oats 2012-2013 1,165 985 2.86 2,812 18 3,640 2,134 92 800 1,000 506 263 2013-2014f 1,282 1,107 3.51 3,888 15 4,409 2,000 93 882 1,084 1,325 270-290 2014-2015f 1,237 1,025 2.97 3,040 13 4,378 2,050 93 886 1,088 1,240 210-240 Rye 2012-2013 140 123 2.73 337 0 362 193 46 68 122 46 155 2013-2014f 109 85 2.45 208 0 254 128 40 52 101 25 160-180 2014-2015f 115 89 2.46 219 0 244 125 38 52 99 20 165-195 Mixed Grains 2012-2013 101 58 2.93 170 0 170 0 0 170 170 0 2013-2014f 105 54 2.87 156 0 156 0 0 156 156 0 2014-2015f 103 52 2.88 150 0 150 0 0 150 150 0 Coarse Grains 2012-2013 5,836 5,334 4.57 24,391 545 28,330 6,239 5,609 13,016 19,007 3,084 2013-2014f 5,855 5,379 5.33 28,682 632 32,399 5,478 5,692 14,197 20,271 6,650 2014-2015f 5,184 4,636 4.76 22,054 631 29,335 5,275 5,685 14,132 20,200 3,860 Canola 2012-2013 8,912 8,799 1.58 13,869 128 14,704 7,310 6,717 30 6,806 588 650 2013-2014f 8,068 8,007 2.24 17,960 125 18,673 8,500 7,000 122 7,173 3,000 495-525 2014-2015f 8,186 7,826 1.85 14,450 125 17,575 8,800 7,500 124 7,675 1,100 460-500 Flaxseed 2012-2013 397 384 1.27 489 15 640 481 n/a n/a 88 71 580 2013-2014f 419 412 1.73 712 15 798 575 n/a n/a 98 125 505-535 2014-2015f 635 595 1.39 825 5 955 800 n/a n/a 80 75 420-460 Soybeans 2012-2013 1,680 1,678 3.03 5,086 257 5,575 3,346 1,541 351 2,074 156 532 2013-2014f 1,829 1,820 2.86 5,198 300 5,654 3,400 1,600 229 2,004 250 535-565 2014-2015f 2,259 2,208 2.76 6,100 250 6,600 4,300 1,600 275 2,050 250 400-440 Oilseeds 2012-2013 10,989 10,861 1.79 19,444 400 20,919 11,137 8,258 381 8,968 814 2013-2014f 10,315 10,238 2.33 23,871 440 25,125 12,475 8,600 351 9,275 3,375 2014-2015f 11,081 10,628 2.01 21,375 380 25,130 13,900 9,100 399 9,805 1,425 Grains and Oilseeds 2012-2013 26,455 25,693 2.76 71,040 1,018 82,460 36,971 17,450 17,303 36,539 8,951 2013-2014f 26,796 26,059 3.46 90,083 1,122 100,156 40,103 17,927 19,485 39,128 20,925 2014-2015f 26,186 24,529 2.90 71,169 1,061 93,155 41,625 18,445 19,069 39,245 12,285 (a) Crop year is August-July, except corn and soybeans, for which the crop year is September-August. (b) Imports exclude products. (c) Exports include grain products, while excluding oilseed products. (d) Food and Industrial Use for soybeans is based on data from the Canadian Oilseed Processors Association. number excludes food and industrial use for flaxseed due to data confidentiality. (e) Domestic Use = Food and Industrial Use + Feed Waste & Dockage + Seed Use + Loss in Handling (g) Crop year average prices: Wheat (No.1 CWRS, 13.5% protein) and Durum (No.1 CWAD, 13% protein), both are average Saskatchewan producer spot prices and are not comparable to CWB pool returns for previous years. Barley (No. 1 feed, cash, I/S Lethbridge), Corn (No.2 CE, cash, I/S Chatham), Oats (US No. 2 Heavy, CBOT nearby futures); Rye (No. 1 CW, cash, I/S Saskatoon); Canola (No. 1 Canada, cash, Track Vancouver); Flaxseed (No. 1 CW, cash, I/S Saskatoon); Soybeans (No. 2 CE, cash, I/S Chatham). f: forecast, by Agriculture and Agri-Food Canada Source: Statistics Canada

CANADA: PULSES AND SPECIAL CROPS SUPPLY AND DISPOSITION July 22, 2014 Grain and Crop Year (a) Seeded Harvested Yield Production Imports (b) Supply Exports (b) Domestic Use (c) Carry-out Stocks Stocks-to- Use Ratio Average Price (d) ---------- thousand ------------------------------------------------------------ ha t/ha thousand metric tonnes ------------------------------------------------------------ % $//t Dry Peas 2012-2013 1,509 1,475 2.26 3,341 16 3,622 2,651 797 174 5 340 2013-2014f 1,329 1,311 2.94 3,849 27 4,050 2,650 1,000 400 11 255-275 2014-2015f 1,609 1,530 2.46 3,760 15 4,175 2,900 825 450 12 225-255 Lentils 2012-2013 1,018 1,004 1.53 1,538 9 2,407 1,638 462 307 15 440 2013-2014f 968 954 1.97 1,881 8 2,196 1,600 471 125 6 435-455 2014-2015f 1,311 1,223 1.64 2,000 10 2,135 1,600 385 150 8 415-445 Dry Beans 2012-2013 127 125 2.26 281 79 365 297 38 30 9 835 2013-2014f 100 100 2.32 232 70 332 295 32 5 2 980-1000 2014-2015f 140 136 2.10 286 60 351 285 31 35 11 820-850 Chickpeas 2012-2013 81 80 2.02 161 9 181 69 59 54 42 690 2013-2014f 77 76 2.33 177 9 240 45 65 130 118 490-510 2014-2015f 77 76 1.95 148 8 286 90 66 130 83 565-595 Mustard Seed 2012-2013 136 135 0.88 119 1 203 120 47 36 22 790 2013-2014f 148 146 1.06 155 1 192 130 47 15 8 755-775 2014-2015f 188 184 1.02 187 0 202 130 47 25 14 725-755 Canary Seed 2012-2013 136 132 1.14 150 0 167 137 8 22 15 585 2013-2014f 85 85 1.54 131 0 153 143 5 5 3 485-505 2014-2015f 113 110 1.27 140 0 145 135 5 5 4 490-520 Sunflower Seed 2012-2013 41 40 2.19 87 27 121 44 60 17 16 635 2013-2014f 28 28 1.89 52 25 94 50 39 5 6 635-655 2014-2015f 41 36 1.70 61 25 91 50 36 5 6 615-645 Pulses and Special Crops (c) 2012-2013 3,047 2,990 1.90 5,677 141 7,066 4,955 1,471 640 2013-2014f 2,736 2,700 2.40 6,476 140 7,256 4,913 1,658 685 2014-2015f 3,479 3,295 2.00 6,582 118 7,385 5,190 1,395 800 (a) Crop year is August-July. Grains Include pulses (dry peas, lentils, dry beans, chick peas) and special crops (mustard seed, canary seed, sunflower seed). (b) Imports and exports exclude products. (c) Domestic Use = Food and Industrial Use + Feed Waste & Dockage + Seed Use + Loss in Handling. domestic use is calculated residually. (d) Producer price, FOB plant, average over all types, grades and markets. f: forecast, by Agriculture and Agri-Food Canada Source: Statistics Canada and industry consultations.