1. GRAIN OUTLOOK Agricultural Lenders Conference 2006 Mike Woolverton Kansas State University mikewool@agecon.ksu.edu

2. WHEAT

3. Wheat Estimates, USDA, Oct. 2006 YieldProduction U.S.38.31.812 bil. Kansas32.0 300.8 mil. (40.0) (380.0 mil.)

4. PRODUCTION PROJECTIONS, U.S., 2006/07 All Wheat – 1.812 bil. Bu. – down 14% All Wheat – 1.812 bil. Bu. – down 14% Hard Winter – 682 mil. Bu. – down 27% Hard Winter – 682 mil. Bu. – down 27% Hard Spring – 432 mil. Bu. – down 7% Hard Spring – 432 mil. Bu. – down 7% Soft Red – 390 mil. Bu. – up 26% Soft Red – 390 mil. Bu. – up 26% White – 254 mil. Bu. – down 15% White – 254 mil. Bu. – down 15% Durum – 53 mil. Bu. - down 48% Durum – 53 mil. Bu. - down 48%

5. 2006 - 2005 HRW Wheat Quality 1 20062005 Test Weight lbs/bu 60.7 60.0 Wheat Protein % 13.9 12.1 Flour Yield 71.0 69.0 Wet Gluten % 33.8 29.5 1 Kansas State University harvest survey of Wheat Sheds in Kansas, Oklahoma, and Texas, Summer 2006, preliminary results.

6. PRODUCTION PROJECTIONS, MAJOR WHEAT EXPORTERS, 2006/07 (MMT) 2006/072005/06 EU-25 117.89 (-4%) 122.59 EU-25 117.89 (-4%) 122.59 United States 49.32 (-14%) 57.28 United States 49.32 (-14%) 57.28 Canada 26.3 (+1%) 25.98 Canada 26.3 (+1%) 25.98 Australia 11.0 (-55%) 24.5 Australia 11.0 (-55%) 24.5 Argentina 13.25 (+6%) 12.5 Argentina 13.25 (+6%) 12.5 Total World Prod.585.14 (-6%) 621.86 Total World Prod.585.14 (-6%) 621.86

12. Wheat Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 59.7 57.2 57.3 Harvest A. (mil.) 50.0 50.1 46.8 Bu./A. 43.2 42.0 38.7 Production 2,158 2,105 1,812 Production 2,158 2,105 1,812 Imports 71 82 105 Imports 71 82 105 Carryover 546 540 571 Carryover 546 540 571 Total Supply 2,775 2,7272,488 Total Supply 2,775 2,7272,488Utilization: Feed and Residual 201 200 145 Feed and Residual 201 200 145 Food 895 915 920 Food 895 915 920 Seed 79 78 80 Seed 79 78 80 Exports 1,060 1,009 925 Exports 1,060 1,009 925 Total Utilization 2,235 2,1552,070 Carryover 540 (24%) 571 (26%) 418 (20%) U.S. Farm Price $3.40 $3.42 $4.10-$4.60

13. Current Market Influences - Wheat Australian Drought (-55%) Australian Drought (-55%) Low Carryover Low Carryover U.S. HRW Quality U.S. HRW Quality Winter Wheat Plantings Winter Wheat Plantings

14. CORN

15. Corn Estimates, USDA, Oct. 2006 YieldBushels U.S.153.510.9 bil. Kansas125.0394 mil. (135.0)(465.8 mil.) (135.0)(465.8 mil.)

22. Corn Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 80.9 81.8 78.6 Harvest A. (mil.) 73.6 75.1 71.0 Bu./A. 160.4 147.9 153.5 Production 11,807 11,112 10,905 Imports 11 11 10 Imports 11 11 10 Beginning Carryover 958 2,114 1,971 Beginning Carryover 958 2,114 1,971 Total Supply 12,77613,23712,886 Total Supply 12,77613,23712,886Utilization: Feed and Residual 6,162 6,141 6,100 Feed and Residual 6,162 6,141 6,100 Food, seed, industrial 2,686 2,975 3,540 Ethanol for fuel 1,323 (11%) 1,600 (14%) 2,150 (20%) Food, seed, industrial 2,686 2,975 3,540 Ethanol for fuel 1,323 (11%) 1,600 (14%) 2,150 (20%) Exports 1,814 2,150 2,250 Exports 1,814 2,150 2,250 Total Utilization 10,662 11,26611,890 Ending Carryover 2,114 (20%) 1,971 (17%) 996 (8%) Ending Carryover 2,114 (20%) 1,971 (17%) 996 (8%) U.S. Farm Price $2.06 $2.00 $2.40-$2.80

23. Current Market Influences - Corn Wet Harvest Conditions in Southern and Eastern Corn Belt Wet Harvest Conditions in Southern and Eastern Corn Belt Demand from ethanol producers Demand from ethanol producers Strong export demand Strong export demand Carryover stocks Carryover stocks

24. GRAIN SORGHUM

25. Sorghum Estimates, USDA, Oct. 2006 YieldProduction U.S.56.6301.0 mil. Kansas60.0138.0 mil. (75.0) (195.0 mil.)

26. Sorghum Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 7.5 6.5 6.3 Harvest A. (mil.) 6.5 5.7 5.3 Bu./A. 69.9 68.7 56.6 Production 454 394 301 Imports 0 0 0 Imports 0 0 0 Beginning Carryover 34 57 65 Beginning Carryover 34 57 65 Total Supply 487 451 366 Total Supply 487 451 366Utilization: Feed and Residual 191 141 100 Feed and Residual 191 141 100 Food, seed, industrial 55 50 55 Food, seed, industrial 55 50 55 Exports 184 195 165 Exports 184 195 165 Total Utilization 430 386 320 Ending Carryover 57 (13%) 65 (17%) 46 (14%) Ending Carryover 57 (13%) 65 (17%) 46 (14%) U.S. Farm Price $1.79 $1.86 $2.20-$2.60

27. SOYBEANS

28. Soybean Estimates, USDA, Oct. 2006 YieldProduction U.S.42.83.189 bil. Kansas31.093 mil. (37.0)(105.5 mil.)

34. Soybean Balance Sheet 04-05 05-06 06-07 Plant A. (mil.) 75.2 72.0 75.6 Harvest A. (mil.) 74.0 71.3 74.5 Bu./A. 42.2 43.0 42.8 Production 3,124 3,063 3,189 Imports 6 4 4 Imports 6 4 4 Beginning Carryover 112 256 449 Beginning Carryover 112 256 449 Total Supply 3,242 3,3233,641 Total Supply 3,242 3,3233,641Utilization: Crushings 1,696 1,7391,775 Crushings 1,696 1,7391,775 Seed 88 93 91 Seed 88 93 91 Exports 1,103 948 1,145 Residual 99 95 75 Exports 1,103 948 1,145 Residual 99 95 75 Total Utilization 2,986 2,8743,086 Ending Carryover 256 (9%) 449 (16%) 555 (18%) Ending Carryover 256 (9%) 449 (16%) 555 (18%) U.S. Farm Price $5.74 5.66 $4.90-$5.90

35. Current Market Influences - Soybeans Higher than expected yields due to August rains Higher than expected yields due to August rains Large Carryover Large Carryover Bio-diesel potential Bio-diesel potential Brazilian plantings Brazilian plantings

36. Production of Major Crops, United States and Former Soviet Union, Percentage Change, 2001/02 to 2004/05 U.S.F.S.U. Wheat11% 6% Corn24%125% Soybeans 9%117% Source: USDA Agricultural Statistics, 2006

37. Former Soviet Union, Production, 2004/05, KMT Country Wheat Corn Soybeans Russia 45,300 3,450.56 Ukraine 17,500 8,800.36 Kazakhstan 9,950 - - Moldova - 1,500 - For Comparison: United States 58,738 299,917 85,484 Source: USDA, Agricultural Statistics, 2006.