1© TransGraph Consulting Pvt Ltd Slide TransGraph Mapping the market thought of oil and oilseeds markets By Nagaraj Meda, MD, TransGraph Consulting Pvt Ltd TransGraph Research Consulting Technology TransGraph Research Consulting Technology C ommodity Price Risk Management solutions Agriculture Metals Energy Currency Economy 30 th Sep’15 Globoil 2015

2© TransGraph Consulting Pvt Ltd Slide TransGraph Review of Globoil 2014:ICE Brent Crude Oil Futures Actual: ICE Brent crude oil futures prices have fallen sharply from the last Globeoil-2014 forecast level of USD 97 towards USD 45. TG forecast of an initiation of a sharp bearish trend was materialized. TG Forecast: ICE Brent crude oil futures prices have initiated a bearish trend wherein weakness towards USD 75 and lower remains open in the coming 3-4 months.

3© TransGraph Consulting Pvt Ltd Slide TransGraph Review of Globoil 2014: CME Soymeal Futures Market: CME Soymeal prices have found support above USD 290 and scaled up to USD 410 ahead turning weak yet again. TG Forecast: CME Soymeal prices are likely to hold above USD 300/290 and witness a corrective rise towards USD ahead of turning lower in the coming 3-4 months.

4© TransGraph Consulting Pvt Ltd Slide TransGraph TransGraph over a period of last 12 years have experimented went wrong and right and learned to stabilize our mapping the market thought approach which is a combination of fundamental, technical and statistical analysis. Benefit from the analysis, we do it only for you. What we Analyse is of immense value to the industry My sincere gratitude to all our customer Gods and lord Saraswati

5© TransGraph Consulting Pvt Ltd Slide TransGraph Research Innovation award: TransGraph annual day 2016

6© TransGraph Consulting Pvt Ltd Slide TransGraph BMD CPO 3-Month Active Futures, MYR/MT Scenario I (last year/ Sep2014 ) We have concluded Cycle wave 1 at 2008 high of 4500 and counting from there as a corrective pattern of W-X- Y pattern. As per that, we expected an intermediate raise towards 2500 (it came up to 2400) till March’15 and then a fall further towards range. Now the key question is has the market bottomed out in long term?

7© TransGraph Consulting Pvt Ltd Slide TransGraph At constant MYR terms of 3.3 RM/ USD, market has gone as low MYR 1452/MT Relative value of currencies driving the markets.

8© TransGraph Consulting Pvt Ltd Slide TransGraph In USD terms, CME Soyoil broke the 2008 low of cents/lbs, Argentina soy oil approached the 2008 low of USD 585/MT RBD Palmolein 1M FOB Malaysia approached USD 482.5/MT WTI 2008 low was USD 32 where as recent low is USD 37.75/bbl where as the USD denominated BMD CPO low was USD 380/MT and recent low was USD 430/MT and Key question is how strong USD is going to be and how much bearish impact it is going to exercise on commodities? Let us review the USD and crude oil forecast

9© TransGraph Consulting Pvt Ltd Slide TransGraph Strong pickup in EU growth to limit sustained Dollar strength 9  Relatively stronger pickup in EU economic growth is likely to limit sustained strength in US Dollar  Strong growth prospects for US keeping money flow inclined into US treasuries

10© TransGraph Consulting Pvt Ltd Slide TransGraph Global currency war to regain export competitiveness supporting Dollar strength  Sharp depreciation witnessed in currencies of major commodity producers during the current year to maintain export competitiveness  Continued fight for market share to provide support to US Dollar in the medium term (around months period).

11© TransGraph Consulting Pvt Ltd Slide TransGraph DXY outlook DXY to remain range bound btw during OND’15 before breaking up side towards 102

12© TransGraph Consulting Pvt Ltd Slide TransGraph Strong improvement in Balance of Payments indicating medium term strength in Rupee *Note: Others include net commercial borrowings, short term loans, banking capital and other capitals Indian Balance of Payments (USD Billion) Item p Current Account Merchandise trade balance Invisibles Total Current Account Capital Account FII FDI Others* Total Capital Account Balance of Payments

13© TransGraph Consulting Pvt Ltd Slide TransGraph Indian fiscal balance indicating strong revenue growth – Fiscal deficit to remain below 4% of GDP 13 Indian Fiscal deficit at a glance INR Crore (BE) AMJ 2015 % of annual target AMJ 2014 % of annual target Revenue Tax Revenue (net to centre) Non-Tax Revenue Recoveries of Loans Other Receipts Total expenditure Non-Plan Expenditure on revenue account Plan Expenditure on revenue account Non-Plan Expenditure on Capital account Plan Expenditure on Capital account Fiscal deficit (Expenditure-Revenue) Source: Indian Union budget, A=Actual, RE=Revised estimate, BE=Budget estimate

14© TransGraph Consulting Pvt Ltd Slide TransGraph USD/INR : Preferred Elliott Wave Count USDINR have placed a long term top as Cycle Wave 3 during mid-2013 and currently unfolding Cycle Wave 4. Within this the pair is unfolding the Primary wave B. Hence the pair could initially stretch higher towards INR 68/68.5 and turn lower towards INR 62 in coming 4-6 months.

15© TransGraph Consulting Pvt Ltd Slide TransGraph World Crude Oil market - Incremental supply trumping steady demand growth  Demand growth remains better than last five and ten year averages  However, huge supply growth compared to the previous years keeps world oil markets in large surplus

16© TransGraph Consulting Pvt Ltd Slide TransGraph Crude oil key price drivers 16 Demand remains strong  Stimulus measures aiding medium term demand  Lower number of hurricanes in likely to result in keep winter temperatures colder.  Likelihood of colder winter shall aid winter demand prospects.  Improving OECD EU imports  Chinese imports remain strong Supply growth to remain high as fight for market share continues  US production seen declining in the medium term amid reduced drilling activity  Surging OPEC supply to keep the markets oversupplied  Non – OPEC supply to remain stable due higher production in Russia  Removal of sanctions on Iran likely to increase supplies in 2016

17© TransGraph Consulting Pvt Ltd Slide TransGraph Crude outlook Price Structure : Prices placed minor wave-5 within a cyclical wave-2. Price Outlook : WTI Crude Oil, prices are likely to hold above USD 36/38 and trade higher towards USD 55/60 in the coming 4-6 months. Turnaround Level : Prices sustaining below USD 35 would negate the upward bias.

18© TransGraph Consulting Pvt Ltd Slide TransGraph Palm Oil Supply – Impact of El-nino Out of 11 El‐Nino years, 5 years recorded negative production and rest of the years majorly recorded lower growth (though positive) than the previous year With Malaysian acreages reaching maturity to the tune of 86%, any El‐Nino event could potentially bring the production down in to negative zone moving ahead in 2016

19© TransGraph Consulting Pvt Ltd Slide TransGraph Palm Oil Balance Sheets El-Nino event, if at all is a reality, shall significantly disturb the fundamentals Global Palm ending stocks will come down in even if normal weather prevails

20© TransGraph Consulting Pvt Ltd Slide TransGraph Spreads at a Glance Spread (As on Sep 25)Current spread 1 month average 1 year average3 year Average5 year average Arg. Soy Oil – RBD Mal (FOB) Arg. Sun Oil – RBD Mal (FOB) Soy Oil – CPO (CIF Rotterdam) Sun Oil – CPO (CIF Rotterdam) Rape Oil – CPO (CIF Rotterdam) Soy Oil – CPO (CNF India) Sun Oil – CPO (CNF India) CPO – Brent Crude Oil Palm Oil at a reasonable spread over competing veg oils.. demand for palm could pick up??

21© TransGraph Consulting Pvt Ltd Slide TransGraph BMD CPO 3M Futures(MYR/MT): Elliott Wave Count-Preferred BMD CPO Futures prices are scaling up after placing a low at MYR 1863 during Aug’15. According to preferred Elliott wave count prices have completed the Cycle Wave 2 and have started entering a fresh bull cycle. Within that Prices are expected to trade higher as Intermediate Wave 1 towards MYR in the coming 5-6 months before turning for a downside correction. Note: Chances of extended gains towards MYR 3000/3100 also cannot be ruled out within the Intermediate wave 1, however would be subject to confirmation.

22© TransGraph Consulting Pvt Ltd Slide TransGraph BMD CPO 3M Futures(USD/MT): Elliott Wave Count BMD CPO Futures prices in USD terms appear to have completed Cycle wave 2 at USD during Aug-2015 and initiated a fresh impulsive wave. Within that prices are likely to rally towards USD 650 as Intermediate Wave 1 in the coming 5-6 months before turning down for a correction.

23© TransGraph Consulting Pvt Ltd Slide TransGraph BMD CPO 3M Futures(MYR/MT): Elliott Wave Count-Alternate BMD CPO Futures prices within corrective Intermediate Wave ‘Y’ most likely has completed Intermediate (Y) leg at MYR 1863 hence a 3 leg corrective rise is expected towards MYR in the coming 5-6 months before turning bearish again.

24© TransGraph Consulting Pvt Ltd Slide TransGraph Global soybean Exports – Brazil eating into US exports Brazil emerging as a major exporter, taking share of US in bean exports and keeping surplus stocks with US: Potential bearish factor?

25© TransGraph Consulting Pvt Ltd Slide TransGraph US Soybean bookings for and Brazil’s Soybean exports Depreciating Real increased Brazilian Soybean export competitiveness while keeping US bookings at lower note

26© TransGraph Consulting Pvt Ltd Slide TransGraph Global Soybean Balance sheet Soybean ending stocks for are further expanding on the back of record production at US and Brazil

27© TransGraph Consulting Pvt Ltd Slide TransGraph CME Soybean Futures: Elliott Wave Count CME Soybean futures prices are considered to have concluded Intermediate Wave XX and initiated the Intermediate wave Z. Within this wave, prices are about to place minor wave (a) which is likely to conclude above USc 800 in coming months and witness a rebound towards Usc 950 in the coming 5-6 months.

28© TransGraph Consulting Pvt Ltd Slide TransGraph CME Soy Oil Futures: Elliott Wave Count CME Soy oil futures prices are at the fag end of the downside corrective phase. While prices are processing the Primary wave Y of the 2 nd Cycle wave possibility of an initial consolidation within cents seems likely. Subsequently prices are likely to scale higher towards 31 cents in the medium term.

29© TransGraph Consulting Pvt Ltd Slide TransGraph CME Soymeal Futures: Elliott Wave Count CME Soy-meal futures prices are likely to hold above USD in the near term. Thereafter prices may resume bullishness towards USD 360 in the coming 4-6 months.

30© TransGraph Consulting Pvt Ltd Slide TransGraph Indian Soymeal Exports – dismal performance In Indian meal exports lost share in SE Asia to China In , importing nations looked into more bean imports than meal imports owing to which both China and India lost share in meal exports Further, higher Indian meal premiums over Argentina pressured Indian meal exports significantly

31© TransGraph Consulting Pvt Ltd Slide TransGraph Soybean Production estimates for Area(Million Ha) Telangana Chhattisgarh Karnataka M.P MH Rajasthan Rest of India Grand Total 2013/ / /16P Yield(Kg/Ha) 2013/ / /16P Production(Million Ton) 2013/ / /16P Source: TG Research  Indian soybean production for 15/16 is likely to stand near 9.2 million tons as erratic rainfall across the soybean growing belt weighed on the crop yield.  Recent rains over the soybean tracks in Telangana and Karnataka boosted the moisture stressed crops.

32© TransGraph Consulting Pvt Ltd Slide TransGraph Indian Soybean balance sheet Indian Soybean Balance Sheet (Oct-Sep) Parameter E F Beginning Stock Production Import0.00 Total Supply Export Crush Domestic consumption Total Demand Ending Stock Source: Industry and TG research; All Units in lakh tons  Though acreage remained higher on y-o-y basis but scanty rainfall during specific intervals is likely to weigh on the yield resulting in lower production for 15/16.

33© TransGraph Consulting Pvt Ltd Slide TransGraph NCDEX Ref Soy Oil Futures: Price Direction NCDEX Soy oil futures price is likely to find support at INR 560/555 and witness a recovery towards INR 660 in the coming 4-6 months.

34© TransGraph Consulting Pvt Ltd Slide TransGraph NCDEX Soybean Futures: Price Direction NCDEX Soybean Future prices are likely to form a base above INR 3000 on further weakness and turn towards in the coming 5-6 months.

35© TransGraph Consulting Pvt Ltd Slide TransGraph Soymeal FOR Kandla prices are expected to find support near INR and turn higher towards INR in the coming 5-6 months. Soymeal FOR Kandla: Price Direction

36© TransGraph Consulting Pvt Ltd Slide TransGraph MCX CPO Futures: Price Direction MCX CPO Futures price has turned positive after finding support above INR 350 in Aug Prices are likely to extend gains towards INR upon staying above INR 380 in the coming 5-6 months.

37© TransGraph Consulting Pvt Ltd Slide TransGraph Price Outlook Summary MarketsLast Closing (Sept 22,2015) Price outlook (0-4/6 months) BMD Palm Oil Futures, MYR/MT CME Soy Bean Futures, Cents/Bu CME Soy Meal Futures, USD/short ton CME Soy Oil Futures, Cents/lb NCDEX Soy Bean Futures, INR/Qtl NCDEX Soy Oil Futures, INR/10Kg Soy meal FOR Kandla, INR/MT MCX CPO Futures, INR/10kg

Thanking you for your attention. TransGraph Consulting Private Limited / 2 / 1, A.P. Civil Supplies Bhavan Lane, Somajiguda, Hyderabad , India WWW

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