Livestock and Fibre Markets. (SA c/kg) 2,560 2,300 2,040 1,780 1,520

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1 Agri-Weekly Livestock and Fibre Markets 24 June 216 Beef market trends (Graph 1) Graph 1: Beef price trends (SA c/kg) Weekly country update: Trading activity on the 4,38 US import market was reportedly slow to moderate with prices trending firm to higher due to seasonal supply tightness particularly from 4,12 3,86 3,6 New Zealand. Volumes from other major 3,34 suppliers to the US were reportedly tight leaving 3,8 Australia as the main supplier of lean grinding 2,82 beef during this period. 2,56 On the US domestic market, boxed beef values 2,3 moved modestly lower with the Choice category 2,4 shedding 3.9% w/w and 14.7% y/y to close at 1,78 US$216.82/cwt. The Select beef values fell by 1,52 2% w/w and 2% y/y at US$198.42/cwt. 26-Jun-15 3-Oct-15 4-Mar-16 8-Jul-16 In the cattle market, the CME Feeder Cattle Class A Contract Index also weakened by 1.9% w/w 38.6% y/y at Class C Weaner calf NZ Cow import parity,d/bn US$141.27/ cwt. * last two data points are preliminary The United States Department of Agriculture (USDA) released its estimate of cattle in feedlot operations with a capacity of 1, or more head in the US. The cattle numbers were in line with market expectations with all cattle on feed as of June at 1.8m head, up 2% y/y. Cattle placements during May 216 came in at 1.89m head and almost 1% higher y/y. Cattle marketed were up 5% at 1.79m head. In Australia (AU), cattle prices continued to post strong gains due to rains and fierce competition for the limited offerings. Widespread rains were reported across the producing areas which raised optimism about the new season ahead. The AU Eastern Young Cattle Indicator (EYCI) increased by 3.5% w/w and 25% y/y at AU$6.41/ kg cwt. Graph 1a: US Cattle price trends Graph 1b: Australian cattle price trends (US /kg cwt) Cutter 9% lean, US /kg cwt Feeder - CME Index, US /kg lwt Choice Fed, US /kg lwt 5 Heavy steer Medium cow Trade steer Source: MLA,

2 15-Feb Feb Feb-16 7-Mar Mar Mar Mar-16 4-Apr Apr Apr Apr-16 2-May-16 9-May May May-16 3-May-16 6-Jun Jun-16 2-Jun Jun-16 FNB Agri-Weekly Page 2 61, 6, 59, 58, 57, 56, 55, 54, 53, Source: USDA, PSD Graph 1c: World beef and veal production trends ( tons) 12, 1, The beef market ended mixed with Class A benefiting from the reduced volumes on markets. Weekly Class A beef prices gained 1.3% w/w and 11.8% y/y to close at R38.31 per kg. Contract Class A beef however trended sideways at R38.11 per kg, but still up 12.8% y/y. Class C beef prices increased by 2.2% w/w and 7.6% y/y to close at R29.12 per kg. Weaner calf prices reversed recent gains on moderation in demand after heavy uptake in the past few weeks by feedlots. Weekly weaner calf prices fell by 3% w/w and.5% y/y at R19.2 per kg live weight. Beef futures on the JSE saw slight losses with the Dec-16 delivery contract falling due to concerns over the demand outlook given the weaker economy. Meanwhile, weekly slaughter number for last week came in slightly lower compared to the week earlier. However, the slaughter trend remains sharply higher than the past four years with average slaughter mass relatively stable above 25kg. The higher slaughter number is reflective of current drought conditions that has reduced the availability of feed and forced producers to reduce their stock holdings. 8, 6, 4, 2, Figure 1d: World beef import, export & stock trends (' tons) Imports Exports Ending Stocks, RHS Graph 1e: JSE BEEF CARCASS FUTURES (R/KG Dec-16 5, 4, 3, 2, Graph 1f: South Africa's beef export trends (tons) , Source: JSE, Trade Map OUTLOOK The beef market is poised for slight moderation in prices in the short to medium term due to subdued demand. However, lower beef cuts are still expected to trend stronger due to the seasonal demand. There is no respite on the feeding front with maize prices still remaining elevated. This situation is likely to persist in 216 feedlots will have to manage costs carefully and continue to implement efficiencies in their operations. 21, 18, 15, 12, 9, 6, 3, Graph 1g: Weekly commercial cattle slaughter trends (head) Source: RMMA; Hides: the June 216 figure is preliminary Graph 1h: Average hide prices per kg JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

3 FNB Agri-Weekly Page 3 Sheep market trends (Graph 2) Australian lamb and mutton markets maintained strong gains on the back of widespread rains across the producing areas which affected supplies. Supplies were down across the board which saw the National Trades Lamb Indicator advancing by 2.3% w/w at AU$6.16/ kg cwt, the highest level for the year. Mutton prices gained 2% w/w at AU$4.1/ kg cwt. Australian lamb slaughter in April lowered marginally (1%) year-on-year, at 1.96 million head. For the year-to-date (January to April), however, lamb slaughter increased 2% on the corresponding period last year with almost 7.85 million head processed. For the first four months of 216, national lamb (SA c/kg) Graph 2: Sheep price trends 7,12 6,58 6,4 5,5 4,96 4,42 3,88 3,34 2,8 2,26 26-Jun-15 3-Oct-15 4-M ar-16 8-Jul-16 Lamb C o nt ract lamb ZN M ut t on parit y * Last two data points are preliminary Class C N Z Lamb p arit y production was also 2% higher year-on-year, at 178,763 tonnes cwt. Prior to the new season inflow of lambs in spring, supplies are expected to tighten over the winter months, in line with a typical season. (MLA) In New Zealand (NZ), the higher slaughter rate due to dryness in some of the producing areas and this coupled with a stronger NZ dollar placed export returns under downward pressure. Meanwhile, NZ lamb exports in May were reported down 1.3% m/m but still 15.2% higher y/y at 33,542 tons. Various destinations included the EU with 11,622 tons for May and 98,163 tons for the year-to-date and accounted for 34.6% of the total NZ exports. Exports to China were down 3.7% m/m but up 94.6% y/y at 12,196 tons, and year-to-date reaching 72,933 tons which is 23.8% higher y/y. The largest increase was for the Middle East with a monthly total of 3,23 tons, up 19.8% m/m but still down 25.4% y/y. Year-to-date lamb exports to the Middle East reached 14,579 tons, up 31.9% y/y. There was a slight rebound in the lamb and mutton markets for the week despite the increased availability. Weekly Class A lamb prices increased by 1.1% w/w and 4% y/y at R55.6 per kg. Contract Class A lamb gained 1.5% w/w and 4% y/y at R55.81 per kg. Mutton prices were a bit firmer at R4.83 per kg, but still up 7% y/y. Feeder lamb prices trended mostly sideways at R28. per kg live weight, but still 1% higher y/y. Sheep slaughter in 216 was substantially higher compared to last year. The cumulative sheep slaughter numbers are now closer to the 212 and not far off the 213 levels. The implications are that supplies will tighten further in the medium to longer term and will exert upward pressure on prices. OUTLOOK Prices are expected to ease somewhat in the short term on moderation in demand. However, the longer term supply outlook remains tight and prices will increase substantially towards year end. Further, the expected improvement in weather conditions in the new pasture season will encourage producers to replenish stocks thus reducing the availability of slaughter animals. 6, 5, 4, 3, 2, 1, Graph 2a: Weekly commercial sheep slaughter trends (head) ,4, 1,2, 1,, 8, 6, 4, 2, Graph 2b: Cummulative sheep slaughter trends (head) Source: RMMA

4 FNB Agri-Weekly Page 4 Pork market trends (Graph 3) Graph 3: Pork price trends US pork prices increased sharply on the back of (SA c/kg) good demand and limited supplies. The pork carcass 3,14 values came in up 11.9% w/w and 6.8% y/y at 2,86 US$88.77/ cwt. 2,58 US weekly pig slaughter slowed to 2.1m head, down 2.6% w/w and 1.8% y/y. The year to date 2,3 2,2 estimated pork production was however still 1,74 1,46 marginally down on last year at 55.3m head. 1,18 Meanwhile, the US pig inventory report came out 9 bearish above market expectations and the largest June 1 inventory report on record at 68.34m head. 26-Jun-15 3-Oct -15 Po rker 4-Mar-16 B aco ner 8-Jul-16 Imp o rt p arit y Exp o rt p arit y USDA indicated that hog inventory was up 1.8% y/y * last two data points are preliminary in June with the breeding herd.9% higher y/y. In China, prices surged due to limited supplies and have raised import demand. China has reportedly been sourcing pork from around the globe as it faced domestic shortages. China is the biggest pork market and any constraint in domestic production does affect the global market. The country consumes over 99% of its production and shortfalls are met by imports which have increased by 35% y/y in 215 and are further expected to increase by 26% y/y in , Graph 3a: World pork production trends World beef production (tons, LHS) China-share of world production, RHS 55% 8, Graph 3b: Worl pork import, export & stock trends (' tons) Exports Imports Ending Stocks, RHS 8 1, 5% 6, 6 5, 45% 4, 4 Source: USDA, 4% 2, Pork and baconer prices increased marginally on improved demand ahead of the month end period. Weekly porker prices gained 1.1% w/w but still marginally down by.5% y/y at R25.21 per kg. Baconer prices advanced by 1.6% w/w and 4% y/y to close at R24.7 per kg. Pork import parity prices eased marginally mainly due to rand strength. Weekly import parity was.4% down w/w but up by a whopping 45.9% y/y. In the monthly pork import update, the monthly SARS figures came in sharply higher in April 216 but still below last year on a year-to-date basis. Monthly pork imports were up 32% m/m but still down 38% y/y at 2,393 tons. In spite of a weaker rand so far in 216, year-to-date pork imports are sharply down by 25% y/y at 5,325 tons. OUTLOOK The firmer trend is expected to be sustained in the short to medium term on moderation in supplies. However the longer term price outlook remains bearish on seasonal decline in demand during the winter months , Graph 3c: Pork Import Trends (tons) Year-to-date: April 216 7, 6, Graph 3d: Pork Monthly Import Trends (tons) 216 6, 4, 2, , 4, 3, 2, 1, JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

5 FNB Agri-Weekly Page 5 Source: SAPPO, SARS, Own Calculations Poultry market trends (Graph 4) Graph 4: Poultry price trends (c/kg) US prices in the broiler complex trended mostly sideways on limited demand and relatively higher volumes. Drumsticks were however the exception and finished the week marginally higher. 2,5 2,38 2,26 2,14 2,2 Leg quarter prices steadied at US34 c/lb, but still down 26% on the previous year. 1,9 1,78 1,66 In the latest UN Food and Agriculture 1,54 Organization s (FAO) update, poultry production is expected to grow in 216 mainly on increased export demand. 1,42 1,3 1, Jun Oct M ar Jul- 16 Frozen whole Fresh whole The FAO sub-indices were all up with the exception Imported Leg Quarter (US) IQF of the vegetable oils. The meat price index * last two data points are preliminary increased by 2% m/m but sharply down by 24% from the 215 levels. Poultry meat prices recorded a third month of moderate growth according the FAO. 1, 8, 6, 4, 2, Graph 4a: World broiler meat production trends ( tons) Source: USDA, PSD May 216 update Increased competition and higher stocks continue to keep the domestic market on the back foot. Market activity was reportedly weak during midmonth as demand remains relatively subdued. In the whole bird category, the medium frozen whole birds saw the biggest loss at R21.6/ kg. This is down 9.5% w/w but still 1.4% higher y/y. Medium fresh whole bird prices posted modest losses and finished at R23.7/ kg, down 3% w/w but still 4.2% higher y/y. Individually Quick Frozen (IQF) prices continued to weaken under pressure at R17.8/ kg, down 1% w/w and 9.2% y/y. Import parity trended weakened on the back of a weaker rand and steady international prices. Weekly import parity prices fell by 3% w/w and 8.8% y/y. OUTLOOK Pricing pressure remains on increased availability of product particularly imports and the seasonal decline in demand. However, the trend on low value products such as legs and gizzards has been upwards due to increased demand. The import battle continues with another country Poland now ready to ship poultry meat bone-in, mechanically deboned meat (MDM) and offal to South Africa. The local industry will have to redouble their efforts in efficiencies given the increasing competition from imports. 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 Graph 4b: Major broiler meat exporters (' tons) Brazil United States European Union 18, 15, 12, 9, 6, 3, Graph 4c: Poultry Import Trends Year-to-date: March , 6, 5, 4, 3, 2, 1, Graph 4d: Poultry Monthly Import Trends (tons) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Source: SARS, Own Calculations; *Excluding BNLS

6 FNB Agri-Weekly Page 6 Producer prices for selected livestock commodities 24 June 216 Beef Mutton Pork Poultry Class A/ Porker/ Fresh Whole birds (R/kg) Class C/ Baconer/ Frozen Whole birds (R/kg) Contract: A2/A3 (Incl.5thQ)/ Baconer/ IQF (R/kg) Import parity price (R/kg) Weaner Calves/ Feeder Lambs (R/kg) Wool and cotton market trends (Graph 5) World cotton futures eased lower under pressure due to the stronger US dollar following the decision by the UK voters to severe ties with the European Union. Nonetheless, strong export sales helped limit losses. US export sales came in larger than expected with shipments to Bangladesh reported at a 3-month high for the week ended 16 June 216. Planting in Pakistan and India is reportedly on the rise ahead of the monsoon rains. The combination of higher planted area and favourable crop conditions will lead to a bumper crop. The US Department of Agriculture's Commodity Credit Corporation announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week s domestic mill use. The quota will be established on June 3, 216, allowing importation of 14,671,661 kilograms (67,386 bales) of upland cotton. Quota number 2 will be established as of June 3, 216, and will apply to upland cotton purchased not later than September 27, 216, and entered into the US not later than December 26, 216. The quota is equivalent to one week's consumption of cotton by domestic mills at the seasonally-adjusted average rate for the period February 216 through April 216, the most recent three months for which data are available. Weekly cotton prices reversed last week s losses and finished up 1.8% w/w and 4.1% y/y at US74.78 cents/lb. Cotton futures on ICE saw losses across the board with the Oct-16 delivery contract easing by 2.1% w/w at US64.83 cents/lb. Cotton for Dec-16 cotton fell by 2.3% w/w at US64.42 cents/lb. ICE Cotton Futures 24 June 216 Source: InterContinental Exchange (ICE) Oct-16 Dec-16 Mar-17 May-17 Jul-17 Cotton (US c/lb) % Change w/w -2.1% -2.3% -1.6% -1.4% -1.2% 18,1 17,23 16,45 15,67 14,89 14,11 13,33 12,55 11,77 1,99 Graph 5: Cotton & w ool prices (SA c/kg) Wool 2,8 2,6 2,4 2,2 2, 1,8 1,6 1,21 9,43 1,4 8,65 1,2 26-Jun-15 3-Oct-15 4-M ar-16 8-Jul-16 SA Wool Aus Wool Cotton A-Index ICE Futures * last two data points are preliminary Cotton Graph 5a: World cotton production trends (' 48-lb bales) Graph 5b: World major cotton importers (' 48-lb bales) 14, 12, 1, 8, 6, 4, 2, 9, 8, 7, 6, 5, 4, 3, 2, 1, 214/ /216

7 FNB Agri-Weekly Page 7 Graph 5c: World cotton imports (' 48-lb bales) Graph 5d: World cotton ending stocks (' 48-lb bales) 6, 5, 4, 12, 1, 8, Ending Stocks, LHS Stock to Use (%), RHS , 6, 6 2, 4, 4 1, 2, 2 Source: USDA, PSD; Wool market: Prices on the Australian wool market continued to strengthen on currency weakness and a smaller offering. The weekly AWEX Eastern Market Indicator (EMI) closed up.7% w/w at AU$12.85 per kg clean wool. Sales reached 93% of 22,18 bales offered. In the US, trades of 128,758 lbs were confirmed with most of the shearing nearing completion and a majority of the warehouses starting to go to a clean-up mode. USDA reported that there are still some trades that will be taking place as the season will start to wind down and head into the typical offseason. Wool this year has been sold mostly at a range of 8-85 percent of Australia. A majority of core samples this year have reflected higher yields across the trading regions, which indicates it was a good overall season for growing wool in the US. The wool market is currently on recess and the closing sale for the season saw the Cape Wools Merino indicator easing to R152.6 clean wool. At this level, the indicator was up 7% compared to the season to date average, and 17.7% higher from the opening sale of the season. Major wool buyers were G Modiano SA with 3,138 bales (32.2%), Lempriere SA with 2,547 bales (26.1%), and Standard Wool SA with 2,38 bales (24.4%). Sales for the new wool season (216/17) resumes on the 17 th of August 216 according to Cape Wools. Fibre market prices 24 June 216 SA prices (R/kg) Australian prices (R/kg) Australian futures Jul-16 (AU$/kg) Australian futures Oct-16 (AU$/kg) Wool market indicator (R/kg) long length wool (R/kg) long length wool (R/kg) long length wool (R/kg) Fibre market prices 2 May 216 SA derived Cotton (R/kg) New York A-Index (US$/kg) Cotton Futures Oct-16 (US$/kg) Cotton Futures Dec-16 (US$/kg) Cotton Prices (R/kg) Cotton Futures - InterContinental Exchange (ICE); SA Wool currently on recess

8 FNB Agri-Weekly Page 8 FNB Business - Agriculture Meet our dedicated team of Agricultural Managers in various regions of South Africa Name Location Cell phone no: Add Grewar, Oosthuizen EASTERN CAPE -Port Elizabeth grewar.oosthuizen@fnb.co.za Edmund, De Beer EASTERN CAPE -Port Elizabeth edebeer1@fnb.co.za David, Dobrowsky FREE STATE -Bethlehem ddobrowsky@fnb.co.za Martin, Louw FREE STATE -Theunissen mlouw1@fnb.co.za Chris, Bekker FREE STATE -Bloemfontein cbekker@fnb.co.za Jan, Theron GAUTENG -Pretoria jantheron@fnb.co.za Greg, Sparrow KwaZulu-Natal -Pietermaritzburg greg.sparrow@fnb.co.za Jurgens, KwaZulu-Natal -Newcastle mschulze@fnb.co.za Herman, Claassens LIMPOPO -Tzaneen herman.claassens@fnb.co.za Adolf, Grobler LIMPOPO -Bela-Bela agrobler@fnb.co.za Stephan, Scheepers MPUMALANGA -Nelspruit sscheepers2@fnb.co.za Theo, Verwey MPUMALANGA -Pretoria tverwey@fnb.co.za Pedrie, Van der Merwe NORTHERN CAPE -Kimberly pedrie.vandermerwe@fnb.co.za Frik, Coetzee NORTHERN CAPE -Upington frik.coetzee@fnb.co.za Johan, De Klerk NORTH WEST -BRITS jdeklerk2@fnb.co.za Johan, Strydom NORTH WEST -Potchefstroom cstrydom@fnb.co.za Johan, Beukes WESTERN CAPE -Caledon jbeukes@fnb.co.za Lize, Morris WESTERN CAPE -Willowbridge lmorris@fnb.co.za Arno, Cloete WESTERN CAPE -Willowbridge arno.cloete@fnb.co.za Disclaimer: Although everything has been done to ensure the accuracy of the information, the Bank takes no responsibility for actions or losses that might occur due to the usage of this information.