Grain & Biofuel Markets in 2015 Matthew C. Roberts

Chinese Meat Consumption

Chinese Oilseed Consumption Growing by 9.8%/yr since

Chinese Grain Consumption Climbing by 4%/year since

Global food demand growth is still explosive Biofuel growth has stopped in the US. –Largely true globally, too. Not just meal, but oil Global instability: –Hurts economic growth, hurts food demand

Oil Prices Continue to Fall

Taking Gasoline With Them

9

10

The Long Term Price of Oil Demand growth is slowing –Europe –China –US Power Generation Supply is increasing –Libya –United States Increases in US Production are already slowing

Energy Independence and Security Act of 2007 Renewable Fuels Standards Calendar Year TotalConvent’l Biofuel (min 20% GHG reduc after 2010) Advanced Biofuel (min 50% GHG reduction) Cellulosic Biofuel (min 60% GHG reduction) Biobased Diesel

How Fast Will Feed Use Recover? Million Bushels Year

Corn Exports Extremely Strong in 13/14, especially given price & competition Year

Global Corn Exports 17

Domestic Production Record Means Much Higher Corn Inventories Production 14.4 Use Stocks-to-Use Ratio (%)

2014: Record Yields

and that means lower prices

Old Crop: Lows should be in. Seems that pessimism has started to leave the market. Still large harvest & large carries. Booking now for remainder of year probably good bet. Few big downside risks, exports a real upside risk

New Crop: Current Dec 2015 price (4.19) unlikely to pull 2m more acres in compared to this year… Will ration consumption some compared to this year, but probably not enough. Futures probably need to be a bit higher for

Soybeans: Domestic Demand Flat Year Million Bushels

Soy exports very strong. Million Bushels

Big Three Soybean Exports 25

Bean Inventories Jump Production 3.96 Use 3.61 Stocks-to-Use Ratio (%)

Global Soybean Production 600m bu Higher in ‘13/14 Production 287 Use 271 Million Metric Tons Stocks-to-Use Ratio (%)

Bean Outlook Much larger inventories Weak case for higher consumption –Crushing consumption & exports already high. Beans can give 3m acres next year, but will producers prefer corn to beans?

Matt Roberts (614) Questions?