Grain Marketing AG BM 102

Hard Red Wheat Price

Bio-Fuel Ethanol Bio-diesel Both ethanol & bio-diesel rules controversial in Farm Bill debate Corn prices much lower recently

Corn Supply Bil. Bu. YearBeg stocksProductionSupply 2009/ / / / / / Source: USDA

Corn Usage bil. bu Source: USDA YearFeedFoodFuelExportsTotal 2009/ / / / / /

Corn Usage Crop Feed57.8%36.7%38.2%39.1% Food12.8%10.8%10.3% Exports17.1%14.0%14.2%12.9% Ethanol12.4%38.5%37.3%37.7%

Other mostly Russia and Ukraine

Corn futures prices 11/28/14 MonthPrice (cts/bu.) May Sept Dec Dec 16423

Dec 2014 Corn Contract

Source: CME Weekly Ethanol Outlook Report

Ethanol 213 plants operating 5 under construction or expanding Current 14.4 bil. gal/yr – 5.1 bil. bu. Many were closed until corn price fell Source: Renewable Fuels Association

PA Corn Crops YearMil. Bu.Yield

160 acres of wheat 11 minutes 8 seconds Winkler, Sask. 100 combines

Old Mill

Mill

Wheat by Truck

Wheat by Railcar

Probing Truck

Testing Equipment

Dryer

Wheat Silos

Top of Silos

Rollstands

Roll Change

Sifter

Mill Spouting

Bulk Trailers Loading

Flour Trailer on Scale

Price Discovery Futures Market Local Supply and Demand Grades & Standards

Market Power Cargill & Continental Archer Daniels Midland Conagra Local Monopsony

International Trade Multinationals Wheat Boards

Summary Big Integrated System Price driven Market power important Space, time, and product form very important here The law of one price System works!