1. Grain & Biofuel Markets in 2015 Matthew C. Roberts Roberts.628@osu.edu

2. www.matthewcroberts.com2

3. Chinese Meat Consumption 90-13 3

4. Chinese Oilseed Consumption Growing by 9.8%/yr since 1990 www.matthewcroberts.com4

5. Chinese Grain Consumption Climbing by 4%/year since 2006. www.matthewcroberts.com5

6. 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 www.matthewcroberts.com6

7. Oil Prices Continue to Fall www.matthewcroberts.com7

8. Taking Gasoline With Them www.matthewcroberts.com8

9. 9

10. 10

11. 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 www.matthewcroberts.com11

12. 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 20089.00 --- 200911.1010.500.60-0.50 201012.9512.000.950.100.65 201113.9512.601.350.250.80 201215.2013.202.000.501.00 201316.5513.802.751.001.28 201418.1514.403.751.751.28 201520.5015.005.503.001.28 12 0.006 0.017 2.2015.2113.00 0.003 0.001

15. How Fast Will Feed Use Recover? Million Bushels Year 5537 6150 3876 3941 5563 5375 6350 6646

16. Corn Exports Extremely Strong in 13/14, especially given price & competition 2420 12201328 2350 700 Year 510 2436 1750

17. Global Corn Exports 17

18. Domestic Production Record Means Much Higher Corn Inventories Production 14.4 Use 13.66 Stocks-to-Use Ratio (%)

19. 2014: Record Yields www.matthewcroberts.com19

20. and that means lower prices www.matthewcroberts.com20

21. 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 www.matthewcroberts.com21

22. 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 2015. www.matthewcroberts.com22

23. Soybeans: Domestic Demand Flat Year Million Bushels 1895 1956

24. Soy exports very strong. Million Bushels 929 804 885 589 527 1063 1720

25. Big Three Soybean Exports 25

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

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

28. 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? www.matthewcroberts.com28

29. www.matthewcroberts.com29 Matt Roberts (614) 688-8686 roberts.628@osu.edu http://aede.osu.edu/people/roberts.628 Twitter: @YourEconProf Questions?