1. World Grain Situation Trends, Conditions and Outlook Parr Rosson Professor & Director Center for North American Studies Department of Agricultural Economics Texas A&M University

2. Overview World Supply/Demand Balance Major Producers & Consumers Market Conditions Affecting the Major Grain Traders Prices

3. World Macroeconomic Conditions Indicator2003200420052006 Real Growth (% CH) World2.43.83.03.1 Asia/NIC/Emerging *6.47.46.66.4 Latin America1.35.84.34.4 Eurozone0.51.91.31.8 Countries United States3.04.43.63.0 Canada2.02.82.63.0 United Kingdom2.23.12.52.3 Japan1.42.61.02.0 China9.19.59.08.3 India7.37.17.26.5

15. Wheat Market Overview Former Soviet Union Re-emerging As Wheat Exporter Improved Rail & Port Infrastructure in Kazakhstan Stimulate Exports Argentine Exports Expected to Decline Due to Short Crop from Dry Weather China ’ s Imports Drop Due to Excellent Crop

17. Iraq, 1 MMT

19. Rice Market Overview Thailand is the World ’ s Leading Exporter More Competition from Vietnam & India Growing in Importance Indonesia a Major Importer Growing Demand in Cuba, Nigeria & Saudi Arabia China Currency Strengthening Likely to Increase Asian Rice Prices

20. World Rice Prices 2000200120028/20031/20048/20041/20058/2005 $0 $100 $200 $300 $400 $500 Thai, FOB BangkokU.S., FAS Gulf PortsFOB, Vietnam $/Metric Ton

23. Source: Producers Rice Mill (producersrice.com)

28. Corn Market Overview Recovering Demand in Latin America Brazil, Argentina, Colombia, Peru, El Salvador & Ecuador Experience Strong Demand Growth Consumption Has Grown 3.4%/Year for 5 Years Increased Animal Feeding Main Reason for Greater Demand Less Export Competition in Near Term

31. Summary World Grain Markets are Characterized as Highly Dynamic Wide Swings in Price Uncertainty About Weather & Other Forces Impacts of Exchange Rates Influenced by Policy and Trade Restrictions Except for Rice, World Supply/Demand for Major Grains In Balanced Tight S/D Balance Can Lead to Large Price Increases & Higher Food Costs for Consumers