1. Grain Outlook For 2004-05 Dr. Robert Wisner Iowa State University Dr. Robert Wisner Iowa State University 5/17/2004

2. Trade-weighted U.S. $ June 04 Up 7.7% in three months

3. Feed Grain Outlook, 2003-04 Near-Record Low world grain stocks Foreign weather--bad last 2 years China: reduced role as corn exporter? ‘04 plantings—very slight corn increase, less sorghum Strong corn domestic & export demand—longer term implications Old & new crop prices highly volatile Beans—Old crop more than new 4/02/04

5. 3/10/04

11. Cumulative Export Sales, 2003-04 vs. Yr. Ago 5/06/04 % Chg. Proj. % Chg. Corn +30 +29 Soybean meal -28 -29 Soybeans -13 -14 All Wheat +41 +37 Grain Sorghum +10 +13

12. China Corn, USDA Export Projections vs. actual Projections too low, except for 1998 October March 2002-03 38% 21% below actual 2001-02 55% 65% below actual 2000-01 45% 18% below actual 1999-00 50% 20% below actual 1998-99 17% 17% above actual 1997-98 58% 17% below actual 1996-97 87% 74% below actual

13. Inadequate data make China a hard Market to project.

16. Figure 4.

26. For discussion of Soybean yield problems, see: http://www.biotech-info.net/first_generation_GMC.pdf

30. On Average, farmers since 1996, planted 0.3% less corn than intended.

34. Questions for Corn Use Tight supplies--which users can out-bid others? What happens with occasional low U.S. yields? -- 1980, 1983, 1988, 1993, 1995, 2002 U.S. production shift, beans to corn? Bring back part of 32 million CRP acres? Impact on land values & Ag structure? Impact on export firms? More investments such as Cargill’s Caribbean ethanol dehydration plant?

43. How Much Cut in May-Aug. SMB Use in Pork vs. Y/A? Poultry—record profits: 5-6% cut? Other non-pork uses: 16-18% cut? Pork 12-14% cut? Stocks beyond processors? Imports above USDA project.?

45. For discussion of Soybean yield problems, see: http://www.biotech-info.net/first_generation_GMC.pdf

46. Very Low world grain reserve Global grain exports may increase substantially -- if yields recover from 02 & 03 China: a major uncertainty Corn export sales likely strong to Aug. Ethanol expansion to continue strong, limiting future export growth potential Chart goals: $3.72, $3.89 if weather problem? Corn, wheat, protein meal prices explosive if major weather problems Significant downside risk in summer, fall Key Points