QUEENSLAND COTTON DAILY MARKET REPORT 24th August 2012

QC Indicative Fixed Bale Prices at 24th August 2012 Fixed Usc/LB 2012 $387 80.80 2013 $386 78.00 2014 $382 75.75

New York Futures as at 23rd August 2012 High Oct'12 Dec12 Mar13 May13 Jly13 Oct13 Dec13 Mar14 May14 Jly14 75.93 77.09 77.60 77.94 78.37 80.73 Low 74.99 75.63 76.33 76.91 77.50 79.63 Settle 75.90 76.80 77.38 77.80 78.45 79.76 80.75 81.92 80.73 81.02 Change -17 -17 -19 -1 +11 +26 +27 +27 +27 +27

Prices provided by Queensland Cotton are subject to quality specifications of : Middling,1-1/8 (31-3,36) 3.5-4.9 Micronaire, 500 lb/Bale, Ex-Gin, 14 Day Payment Terms All prices quoted are exclusive of GST. No responsibility is accepted by Queensland Cotton or its employees for the accuracy if this report. Basis quotes may differ from the cash price basis equivalent.
AU$ Price Per Bale $650 AUD/USD 1.1500

$600
AUD/USD

1.1000

$550 1.0500

$500 1.0000 $450

2012 Daily Cash Price 2013 Daily Cash

0.9500

$400

$350

0.9000

AUD/USD Spot Rate: 1.0442

$300 0.8500

Indicative Forward Rates: 2013 2014 1.0217 0.9922 FOREIGN EXCHANGE MARKET COMMENTARY
German GDP in line with forecasts. Euro PMIs mixed.

COTTON MARKET COMMENTARY

ICE Futures had a mixed session overnight seeing highs of 77.09, but failed to maintain this level, closing on negative ground, losing -17 points, trading at 76.80. On a positive front Chinese mills have received 500,000 tonnes of processing quotas, which has created some demand from China. However the bearish situation in the current market place; has indicated that mills are likely to sell the quota, and import yarn. Rumours have also indicated that 300,000 tonnes will be moved from the Chinese reserve stocks, which has not made any significant changes to ICE future prices. The Indian situation is still unknown; the CAB meeting which took place in India overnight was inconclusive on 12/13 production numbers, with recent rainfall in the area, the S & D numbers will be released next week in an additional meeting. With the world ending stocks high and the lack of US cotton being traded, the market seems to be trending towards a very bearish outlook.

Euro Consumer Confidence at lowest level since June 2009 US New Home Sales beats expectations Yesterday, Chinese HSBC Manufacturing PMI came in at 47.8 - well below Julys 49.3 reading and the weakest PMI for 9 months. AUDUSD gradually sold off following the news, falling 100 pips from 1.0535 to 1.0435. US New Home Sales data no doubt helped the AUDUSD slide. Some question marks are appearing on Wednesdays FOMC Minutes with one Fed official saying that the minutes were a bit stale and data since has been stronger than anticipated. Markets will be closely following Bernankes speech at the Jackson Hole conference next Friday for further clues. German GDP came out in line with forecasts yesterday with the Q/Q release at 0.3% and the Y/Y at 1%. There is a general downtrend in German GDP which does not sit well for the union. PMI data was mixed, with manufacturing slightly better than forecasts (yet still under the critical 50 level) while the services PMIs were generally worse than forecast with the German release at 3 year lows. The only real positive was the French Services PMI which managed to stay above 50. Tonight, UK GDP data hits the markets with forecasts pointing to a deepening recession. Greek Prime Minister Samaras has a meeting with German Chancellor Merkel to discuss about the next Greece loan tranche of 31.5bn (and the austerity measures surrounding the bailout). Merkel has been hinting at loosening the reins on Greece, the outcome of this meeting could confirm that position. In the US, Durable Goods data comes out with forecasts pointing to an improvement to 1.6% from 1.3% last month. Good data here could add further QE3 doubt.

QUEENSLAND COTTON CONTACTS Darling Downs: SW QLD: Macintyre / Gwydir : Central QLD: Gwydir/ Namoi: Allyse Morris 07 4668 0106/ 0400 646 579 John Robinson: Celina Baillie James Greenwood 07 4625 2198 / 0409 090325 Hollie Gall Rick Jones Tim Whan 07 4652 2275 / 0438 381 192 07 4982 1522/ 0409 059 806 02 6795 4420/ 0407 624 896 Ben Suttor Namoi / Western NSW: Brisbane Head Office: 07 4668 0106/ 0419 748 523 07 4668 0106 / 0400 533948 07 4625 2198/ 0428 779 322 02 6847 4766/ 0418 654 253 02 6795 4420/ 0428 501069 073250 3310/ 0408 070 679 Tony Bennett Meagan Abdy

Macquarie/ Southern NSW: Peter Horton