MAV Argentina Securities Market. ROSGAN Rosario Cash Livestock Market

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1 MFGR Rosario Cash Grain Market Soybean market eyes South American weather ROFEX Rosario Futures & Securities Market Agro Derivatives Statistical Report Financial Derivatives Statistical Report MAV Argentina Securities Market Deferred Payment Checks and Repo Market Summary for January 2017 January Debt Issuances at MAV ROSGAN Rosario Cash Livestock Market Rosgan Price Index Analysis Markets ROFEX MAV ROSGAN RSGM 1 / 11

2 last campaign when 4.5 million tons had been shipped by the same time last year. Soybean market eyes South American weather With climate premium gaining momentum, soybean volatility in both Chicago and Rosario markets played increased during January. The excessive rains first, the brilliant sunny days that followed, and the tight geopolitical context translated in fluctuations of around $ 500/ton during January for argentine s oilseed. After taking off towards $ 4.600/ton in the physical market, the soybean is looking for a landing strip in order to enter the new commercial cycle. During the last days, soybean prices fluctuated between $ $4.300/ton stopping the commercial dynamism of the first two weeks days of January. Improvement in the crop conditions paired with limited industrial demand due to the plant maintenance generated a commercial peace, calming down the bids. Meanwhile, the big grain providers took sides in $ 4.300/t, a value below which there were practically no transactions. The slow pace of buying in the oilseed complex from both exporters and the crushing industry has resulted in the 2015/16 campaign accumulating over five million tons less in sales than throughout the previous year, when 47 million tons were exchanged by this time. Shipment commitments for the new crop 2016/17 paint a more optimistic picture. Up until February 1, one million tons in export sales from the whole soybean complex had been reported, the largest volume in the last 5 years and tons more than at this point last year. However, our closest competitor, Brazil, has doubled its shipping in comparison with the 2 / 11 Rofex Soybean futures with May settlement started last week with a strong drop of around u$s 6.5/ton on January 30. By mid-week the Price started to accommodate at intermediate values of u$s 264/t, far from the maximum annual peak of u$s dollars per ton. In spite this fall, the industry paying capacity is around u$s 260/ton and u$s 266/ton for exporters. Hence, traders try to commercialize the oilseed at parity. Export demand sustains wheat prices at very attractive levels for the supply side and yet competitive in the international market. Total sales for the 2016/17 campaign triples the volume of last year campaign. Meanwhile, shipments of 2016/17 wheat totalized 5.2 million tons, against the 2.4 million of the last campaign at this point of the year. However, a new communication of the Egypt Ministry of Supply reported that the country has enough wheat offers for the next 5 months, thus everybody is looking to Brazil as a source of demand. Meanwhile, in our trading floor sales of milling wheat sped up as soon as prices hit the $ 2.720/ton (u$s 172/ton) mark. This increase is evident in the number of trucks loaded with wheat that arrived to Up River ports during last January, with 22,530 units that more than doubled the total for January The current situation of the spot corn market is very different to that of the rest of the grains. The last week started without bids until February 1, when buyers offered $ 2.350/ton, $ 250 below values registered during the previous week. On the other hand, prices for the new crop of around u$s /ton for March delivery allow for certain dynamism in trading. Declarations of export sales for the new

3 campaign amount to a total 1.6 million tons, far from the 8 million tons of the previous campaign when the export restrictions had been lifted. For more information regarding Rosario s Grain Spot Market, please contact iyee@bcr.com.ar or visit the Rosario s Grain Spot Market webpage. 3 / 11

4 AGRO DERIVATIVES Statistical Report Commodity Derivatives Totals In January, the number of commodity derivatives contracts traded on the Rosario Futures Exchange (ROFEX), which includes Chicago Soybean, Chicago Corn, Gold and Crude Oil CME Licensed Futures, plus Rosario referenced agricultural contracts (Rosario Soybean Index contracts, Soybean, Wheat and Corn Futures with Physical Delivery in Rosario), was 86,796 contracts. Futures vs. Options Volume The agricultural futures volume in January was 278,695 metric tons, -17% MoM but +37% YoY, while options volume reached to 184,140 metric tons, +13% MoM and +339% YoY. Thereby, options market share in agricultural derivatives climbed from 33% in December to 40% in January. The turnover in agricultural derivatives, reached to 462,835 metric tons (58,822 contracts). This represented a fall of 6.8% MoM and a growth of 88% YoY. Crude Oil Futures traded 19,655 contracts, +39% MoM and +106% YoY. Gold futures and options traded 8,319 contracts, +101% MoM and +321% YoY. This was the second highest month for Gold futures volume ever. Commodities Derivatives Summary (in contracts) Agro Oil WTI Futures Options Futures Gold Futures and options Volume OI Volume OI Volume OI Volume OI Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Volume by Product The most traded agricultural derivatives were Chicago Soybean futures (SOY) and Rosafé Soybean Index (ISR) futures, with 236,550 and 100,740 metric tons respectively. % MoM 5,75% 52% 3% 20% 39% 70% 101% -2% % YoY 87,09% 23% 373% 633% 106% 40% 321% 5771% 4 / 11

5 Open Interest The agricultural open interest (OI) averaged 529,739 metric tons per day during January, +34% MoM and +4% YoY. Futures averaged 353,284 metric tons, while options averaged 176,455 metric tons. The open interest (OI) had a daily average of 2.24 million contracts during January. This represents a drop of 3% MoM and a decrease of 83% YoY. It's worth noting, that the OI YoY comparison is distorted by the huge position held by the Central Bank during the last quarter of 2015, as a result of its aggressive intervention in the FX futures market in order to dissuade the expectations of a sharply increase in the exchange rate. In December 2016, after the Macri's administration had removed the Exchange Rate controls imposed by the former administration, the dollar FX rate against the peso climbed 40%. Because of the FX market normalization, by the end of June 2016 the OI in FX futures returned to its normal levels. Gold Futures and options OI averaged 6,709 contracts in January, +70% MoM. Oil WTI Futures OI averaged 16,489 contracts, -2.5% MoM. Glossary SOY: Chicago Soybean Futures CRN: Chicago Corn Futures SOJ: Soybean Export Condition Futures SOF: Soybean Crushing Condition Futures ISR: Rosario Soybean Index Futures TRI: Wheat Futures MAI: Corn Futures FINANCIAL DERIVATIVES Statistical Report Financial Derivatives Totals In January, the total number of financial derivatives traded on the Rosario Futures Exchange (ROFEX), which includes futures and options of FX; Public Bonds and Equity index; was 8.87 million contracts, -12.4% in comparison with the previous month and -3.3% YoY. 5 / 11 US Dollar Futures

6 The total FX derivatives markets (ROFEX, MATBA and OCT MAE) traded U$S 10,454 million in January, -7.8% MoM and +1.7% YoY. Término de Rosario SA // Legal Address: Paraguay 777, piso 15º, Rosario, Santa Fe // DNDA record: // Edition number: 1 // Exclusively online edition. // Copyright 2016 ROFEX Mercado a Término de Rosario S.A. All rights reserved Concerning US dollar futures in ROFEX (whose contract size are U$S 1,000, and is cash settled by the BCRA A3500 communication), a total of u$s 8,837 million were negotiated in January (- 12.4% MoM and -3.6% YoY). This represented 85% of the total traded in the US dollar derivatives markets. Merval Index Futures Merval Index Futures volume grew by 5% MoM in January to 21,557 contracts. It became the second most traded month since the contract was listed. The OI averaged 1,833 contracts in the month. Public Bonds Futures Public Bonds Futures in ROFEX (which currently includes Bonar 2017, Bonar 2024 and DICA), traded 4,079 contracts in the first month of the year. It represents a drop of 62% MoM but +118% YoY, mainly explained by AA17 bonds. At the same time, OI averaged 4,540 contracts in January, +141% MoM and +161% YoY. For a higher level of disaggregation of statistical information write to investigacion@rofex.com.ar or visit the Centro de Estadísticas de Mercado of ROFEX. Director: Marcelo Gastón Comisso // Owner: Mercado a 6 / 11

7 Deferred Payment Checks and Repo Market Summary for January 2017 Deferred Payment Checks (DPCs) Trading in deferred payment checks (DPCs) in Mercado Argentino de Valores (MAV) has slightly decreased over January During the five-week period comprised between January 2 and February 03, checks with a total face value of approximately ARS 1,312 million have been traded, a 8% drop from the ARS 1,418 million negotiated in the previous five-week period. Table 1 breaks down DPC trading into its segments: Segment 29/11 to 29/12 MoM % change 31/10 to 25/10 December/16 November/16 Endorsed % Non-Guaranteed Direct % Guaranteed Direct % Sponsored % Total % The endorsed (avalado) segment s share of trading activity has risen 7.5 percentage points during January, accounting for almost than 94% of traded value. This recovery is mostly a result of a significant drop in trading in the Non- Guaranteed Direct Checks segment. Graph 1 shows the evolution of the endorsed segment check s yield curve over the last month. Discount rates on endorsed checks fell steeply throughout January, particularly in short-term securities. Checks with a maturity of over 180 days still offer attractive returns when compared to notes issued by the Central Bank of the Argentina Republic. Traded volume in Mercado Argentino de Valores repurchase agreements (repo) market increased 45% throughout January, with a total of around ARS 1,708 million being borrowed. Table 2 offers a summary of repo market activity. Table 2. Repo Market Statistics Table 1. Deferred Payment Checks Statistics Days to Trade Volume ($) Number of trades Trade Volume ($) Number of checks Maturity December/16 MoM % change November/16 December/16 November/16 Up to % % % % > % Total % As seen on Graph 2, haircuts on repo agreements with a maturity of up to two weeks (which accounted for more than 99.5% of total borrowings in January) fell sharply, giving way to annualized yields below 22%. 7 / 11

8 January Debt Issuances at MAV During January, new debt securities worth ARS 33,028,133 were issued in Mercado Argentino de Valores, showing significant slowdown in primary market activity. Among these was one corporate debt issuances, one new series of asset-backed securities (ABS) and the reopening of a past ABS issuance. On January 26, the Pilay I trust fund reopened its issue of investment certificates, which provide rights to ownership of real estate units. A total of ARS 66,880,133 worth of securities were tendered, but only offers amounting to ARS 33,028,133 were made. For more information, please contact iyee@bcr.com.ar, or visit the Mercado Argentino de Valores webpage. On January 6, Cumar SA issued debentures worth ARS 5,000,000 with a maturity of approximately 24 months and which pay a floating rate of BADLAR basis points with a 17% floor and a 30% ceiling. Total offers for these securities, which were assigned a rating of A- by Evaluadora Latinoamericana SA, were of ARS 12,323,000. Capital on these debentures will be repaid on a four-month basis, with five payments of 17% followed by a 15% payment at maturity. On January 25, the Inverlease II trust fund issued debt securities worth a total of ARS 27,943,133. The issuance was backed by credit from lease agreements and was structured into two tranches (ratings were assigned by Evaluadora Latinoamericana SA): Trust debt certificates were assigned an AA rating and paid a floating annual rate of BADLAR basis points with a floor of 23% and a maximum of 32%. Offers for this tranche were of ARS 20,500,000, the total of which were accepted. Investment certificates (residual tranche) were assigned a C rating. Offers for this tranche were of ARS 7,433,133 the total of which were accepted. 8 / 11

9 Rosgan Price Index Analysis During 2016, the Rosgan Price Index rose from $ per kilo in February to $ per kilo by year-end, a 15% increase. As far as year over year changes go, August is the month that shows the largest gain, although May, September and April all saw values rise over 40%. It should be noted that the low year-to-year variation registered in December (1.94%) is a product of the large increase that took place in December 2015 (60.6%) after currency exchange controls were lifted. In the following chart, we can see the complete RPI series where we can observe that during the current year the upward trend started towards the end of 2013 has continued. We can also see the peak presented in September 2016, which is the highest value of the RPI series, surpassing the year-end price for 2015 by in $ 2.63 per kilo. Rosgan Price Index Evolution ($ per kilo) RPI Monthly Evolution ($ per kilo) YOY % change Source: IIE base on data supplied by the Rosgan. February 21,41 29,77 39,05 March 22,6 30,45 34,73 April 21,9 30,9 41,10 May 21,33 30,33 42,19 June 22,27 30,81 38,35 July 24,38 32,95 35,15 August 23,38 33,7 44,14 September 25,66 36,22 41,15 October 26,43 35,16 33,03 November 29,12 34,68 19,09 December 33,59 34,24 1,94 Feb-Dec Average 24,73 32,66 32,03 Source: IIE based on the data supplied by Rosgan. Separating the different RPI categories, we can notice that the major year-over-year changes took place in the calves of more than three years of age category, which saw its average prices rise over 74%. This variation largely surpasses that of the general price index, which as we mentioned before was of little over 32%. Other categories worth highlighting are steers from two to three years of age (+45%) and steers from one to two years of age (+36%). In the other end are Holando calves, with a variation of less than 15%. 9 / 11

10 Average price for different categories ($ per kilo) Monthly Evolution of RBPI ($ per head) 2015 Average 2016 Average YOY % Change Male calves 26,33 34,97 32,81 Female Calves 25,5 33,59 31,73 Male and female calves 26,02 34,14 31,21 Steers from 1 to 2 years 22,09 30,08 36,17 Steers from 2 to 3 years 18,74 27,18 45,04 Steers of > 3 years 15,92 27,73 74,18 Holando Steers 17,65 22,9 29,75 Holando Calves 23,17 26,63 14,93 Fattening heifers 22,41 28,58 27,53 Fattening cows 12,8 16,55 29,30 Note: These prices are calculated as annual averages from monthly prices of each category. Source: IIE based on data supplied by Rosgan YOY % Change February 5.725, ,6 12,84 March 6.262, ,3 51,18 April 4.920, ,1 54,98 May 6.103, ,4 37,20 June 6.230, ,7 31,60 July 6.806, ,6 43,25 August 6.502, ,0 66,62 September 7.879, ,1 26,49 October 6.786, ,1 15,32 November 6.895, ,1 1,59 December 8.688, ,9-26,21 Feb-Dec Average 6.618, ,3 26,26 Source: IIE based on data supply by Rosgan. The Rosgan Breeding Price Index (RBPI) ended with an average price for the year 2016 of $8,356.3 per head, reflecting an increase of 26.26% over the 2015 average of $6,618.1 per head. RBPI Evolution ($ per head) The maximum value of $ 10,834 was reached in August, representing a variation of 66.62% regarding the same month of the previous year. On the other end, December represents the minimum value of the year with a year over year of slightly over 25%. Because of this heterogeneous behavior throughout the year, the RBPI of February 2016 ($6,460.6 per head) turned out to be greater than the one corresponding to December of the same year ($6,410.9 per head). The RBPI for August 2016 surpassed the 2016 year-end price by $4,423.1 per head. Source: IIE based on data supply by Rosgan. As regards the analysis of the evolution according the different categories considered in the RBPI estimation, both cows with calves on foot as pregnant heifers showed year-over-year variations larger than 20% (27.18% and 23.81% respectively). 10 / 11

11 Average Price by RBPI category ($ per head) 2015 Average 2016 Average YOY % Change Cows with calf on foot ,2 Pregnant heifers: ,8 Source: IIE based on data supply by Rosgan. For more information regarding Rosario s livestock market, please contact mlneffen@bcr.com.ar or visit the ROSGAN webpage. 11 / 11