2014 OUTLOOK Ray Grabanski Progressive Ag Fargo, ND Trading futures and options involves risk. Past performance is not indicative of future results.

North Dakota Marketing Year Average Price Year Spring Wheat SoyeansCorn

2013 – IN REVIEW Jan-13Dec-13Change Chi Wht H % Chi Wht N % KC Wht H % KC Wht N % Mpls Wht H % Mpls Wht U %

2013 – IN REVIEW Jan-13Dec-13Change Corn H % Corn Z % Soybean H % Soybean X % Soybean Oil H % Soybean Meal H %

2013 – IN REVIEW Jan-13Dec-13Change Live Cattle G % Feeder Cattle F % Lean Hog G %

2013 – IN REVIEW Jan-13Dec-13Change GOLD G % Silver H % Copper G % Platinum F % Palladium H %

2013 – IN REVIEW Jan-13Dec-13Change Crude Oil G % RBOB G % Heating Oil G % Ethanol G % Natural Gas G %

2013 – IN REVIEW Jan-13Dec-13Change Dow Jones H % S&P 500 H % Nasdaq H % Dollar % CRB Index %

Stocks Breakout to New Highs

10 year Monthly DJIA

CORN

Corn’s Issues Bigger than expected crop (158.8 bu) Demand Exports started poor/cancellation/improving Ethanol pace slowing EPA changing RFS 1.6 Million less Soft Red Acres

Corn Exports To Date SalesShipmentsUSDA /week 1.8/3.12 BB /week 783/ weeks into corn’s marketing year, 30 weeks to go Sales need to average 9.3/Shipments 34.2

Corn Category 09/10 10/11 11/12 12/13 13/14 14/15 Supply Beginning Stocks1,6731,7081, ,481 Production13,09212,44712,36010,78013,92513,871 Imports Total Supply14,77414,18213,51711,93214,78115,367 Use Food, Seed, Ind.1,3701,4071,4281,3961,4001,425 Ethanol4,5915,0195,0004,6485,0004,600 Feed and Residual5,1254,7954,5574,3355,3005,000 Exports1,9801,8341, ,6001,750 Total Use13,06613,05512,52811,11113,30012,775 Ending Stocks1,7081, ,4812,592 Stocks/Use Ratio Year Average 11.2 Planted Acres Harvested Acres Yield Per Acre (Bu.) Average Price

USDA 2014 L-R Projections n 93.5 million acres, 86.1 hvstd. n bu/acre yield n billion bu crop n Ethanol 4.9 billion bu. n 2.6 billion carryout ($3.65) n But reduce 400 mb since Nov. (2.2 B)

USDA 10 yr. projections n : $3.30-$3.65 n : $3.75-$4.20 n B/E now is $4.14 n Target Price is now $3.70

Monthly corn: Consolidation?

Weekly Chart: Bottoming???

Mar 14 Corn: $4.45 sell July

Dec 14 Corn: $4.65/$5.35?

SAM Weather

SOYBEAN

Soybean Issues South America: Brazil: huge acres, 5 to 8% increase, early harvest good, getting hot south Argentina: hot dry conditions/improving US demand impressively strong Crush demand very strong meal demand main reason Exports very strong but China has huge

Soybean Exports To Date SalesShipmentsUSDA /week 2.15/3.73 BB /week 1.58/2.74 BB weeks into corn’s marketing year, 30 weeks to go Sales are over expectations/Shipments need 11.7

Soybean Export Destinations

Soybeans Category09/10 10/11 11/12 12/13 13/14 14/15 Supply Beginning Stocks Production3,3593,3293,0943,0343,2893,484 Imports Total Supply3,5123,4953,3253,2393,4593,649 Use Crush1,7521,6481,7031,6891,7001,750 Exports1,4991,5011,3651,3201,5101,550 Seed and Feed Residual Total Use3,3613,2803,1553,0993,3093,415 Ending Stocks Stocks/Use Ratio Year Average 5.2 Planted Acres Harvested Acres Yield Per Acre (Bu.) Average Price

USDA Baseline 2014 no’s n 78 million acres n 45.2 bu/acre yield n billion bu crop n 203 million bu carryout ($9.75) But reduced 20 mb after Nov. (183)

USDA 10 yr. projections n : $8.85 to $9.75 n : $ $10.15 n Target price is $8.40

Soybean Monthly: Downside Risk?

Weekly: Consolidation???

Mar 14 Sbns: inverted, sell

Nov 14 Sbns: $11.65/$12.35

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WHEAT

Wheat’s Issues - US US Winter Wheat going into dormancy at very good condition Exports started strong, slowing due to strong dollar Winter Wheat crop high quality Spring Wheat average quality, discounts Oct/Nov/Dec Crop Production Report BEARISH, not expected

Wheat’s Issues - US US Winter Wheat Crop Condition Rating KS: 63% G/E58%35% OK: 77% G/E63%36% TX: 32% G/E 38/35/37%19% CO: 55% G/E 18 States: 62% G/E Last Year: 33% G/E

Winter Wheat Acres Down State KS % TX % OK % MT % CO % IL % IN % NE % OH % Total %

WW Acres

Wheat Exports To Date SalesShipmentsUSDA /week 476 MB/ /week 394 MB/ weeks into marketing year, 17 weeks to go Sales need average 11.4/Shipments 21.4

Wheat Category 09/10 10/11 11/12 12/13 13/14 14/15 Supply Beginning Stocks Production2,2182,2071,9992,2662,1302,366 Imports Total Supply2,9933,2792,9743,1313,0183,044 Use Food Seed Feed and Residual Exports8791,2891,0511,0071,1751,200 Total Use2,0182,4172,2312,4142,4592,500 Ending Stocks Total Ending Stocks Stocks/Use Ratio Year Average 28.5 Planted Acres Harvested Acres Yield Per Acre (Bu.) Average Price

2014 USDA Baseline no’s n 57 million acres, 48.5 hvstd. n 45.8 bu/acre n billion bu production n 642 million bu carryout ($4.90) Only 7 mb reduction since Nov. (635)

USDA 10 yr. projections n : $ $4.90 n : $4.90-$5.35 n Target Price is $5.50 in new farm bill

Mar Mpls: $6.95/$7.35 sell

Sept 14 Mpls: $7.00/$7.35