research. around the globe, around the...

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Research.Around the globe, around the clock

Chicago Kansas City Taiwan Mumbai Singapore

New York London Hong Kong Shanghai

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Long term US/World supply

needs

Basic supply/

demand input Weather

ChinaInvestments

World Macro-

Economic

Conditions

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Current grain market factors

1) World economic and currency outlook

2) Global tensions/commodity demand

3) 2015 US/World weather

4) Demand for US/World grain exports/domestic use

5) Money flow

6) 2015 US/World planted acres

7) USDA reports?

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61.0

0

87.4

0

78.8

0

57.4

0 70.3

0

85.0

9

63.0

2

78.0

3

117.9

6

113.8

1 130.5

0

95.7

9

30

45

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90

105

120

135

150

165

Billio

n U

SD

US Net Farm Income

Souce: USDA

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USDA SUPPLY/DEMAND Hightower 2015/16 Estimates

US CORN Jan Jan Jan Changes in Planted Acres Est.

USDA USDA USDA If 164 Yield

08-09 09-10 10-11 11-12 12-13 13-14 14-15

Planted Area (M Acres) 86.0 86.4 88.2 91.9 97.3 95.4 90.6 88.6 86.6 84.6

Harvested Area (Acres) 78.6 79.5 81.4 84.0 87.4 87.5 83.1 81.3 79.4 77.6

Yield (Bu/Acre) 153.9 164.7 152.8 147.2 123.1 158.1 171.0 165.0 165.0 165.0

Beginning Stocks (M Bu) 1,624 1,673 1,708 1,128 989 821 1,232 1,877 1,877 1,877

Production 12,092 13,092 12,447 12,360 10,755 13,829 14,216 13,409 13,106 12,803

Imports 14 8 28 29 160 125 25 25 25 25

Supply, Total 13,729 14,774 14,182 13,517 11,904 14,686 15,472 15,311 15,008 14,705

Feed & Residual 5,182 5,126 4,798 4,566 4,315 5,036 5,275 5,460 5,460 5,460

Food, Seed & Industry 5,025 5,961 6,425 6,421 6,038 6,501 6,570 6,550 6,550 6,550

Ethanol for Fuel 3,709 4,591 5,019 5,000 4,641 5,134 5,175 5,165 5,165 5,165

Domestic Total 10,207 11,087 11,224 10,987 10,353 11,537 11,845 12,010 12,010 12,010

Total Exports 1,849 1,979 1,831 1,541 730 1,917 1,750 1,850 1,850 1,850

Use, Total 12,056 13,066 13,055 12,528 11,083 13,454 13,595 13,860 13,860 13,860

Ending Stocks 1,673 1,708 1,128 989 821 1,232 1,877 1,451 1,148 845

Stocks/Use Ratio 13.9% 13.1% 8.6% 7.9% 7.4% 9.2% 13.8% 10.5% 8.3% 6.1%

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US Corn Ending Stocks

The Hightower Report

Data from 2015/16 and beyond are from USDA Baseline Projections

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USDA SUPPLY/DEMAND Hightower 2015/16 Estimates

US SOYBEANS Dec Dec Dec Changes in Planted Acres Est.

USDA USDA USDA 15 Yr. Trend Line Yield

08-09 09-10 10-11 11-12 12-13 13-14 14-15

Planted Area (M Acres) 75.7 77.5 77.4 75.0 77.2 76.8 84.2 86.2 87.2 88.2

Harvested Area (Acres) 74.7 76.4 76.6 73.8 76.1 76.3 83.4 85.3 86.3 87.3

Yield (Bu/Acre) 39.7 44.0 43.5 41.9 40.0 44.0 47.5 45.5 45.5 45.5

Beginning Stocks (M Bu) 205 138 151 215 169 141 92 410 410 410

Production 2,967 3,359 3,329 3,094 3,042 3,358 3,958 3,883 3,928 3,973

Imports 13 15 14 16 41 72 15 15 15 15

Supply,Total 3,185 3,512 3,494 3,325 3,252 3,570 4,065 4,308 4,353 4,398

Crushings 1,662 1,752 1,648 1,703 1,689 1,734 1,780 1,810 1,785 1,810

Exports 1,279 1,499 1,505 1,365 1,317 1,647 1,760 1,770 1,695 1,770

Seed 90 90 87 90 89 98 92 92 92 92

Residual 16 20 43 -2 16 0 23 22 22 22

Use, Total 3,047 3,361 3,279 3,155 3,111 3,478 3,655 3,694 3,694 3,694

Ending Stocks 138 151 215 169 141 92 410 614 659 704

Stocks/Use Ratio 4.5% 4.5% 6.6% 5.4% 4.5% 2.6% 11.2% 16.6% 17.8% 19.1%

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US Soybean Ending Stocks

The Hightower ReportData: USDA WASDE and Baseline Projections

Data: 2015/16 and beyond are from Baseline Projections

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USDA SUPPLY/DEMAND Jan Jan Jan

US WHEAT USDA USDA USDA 2013/14

05-06 06-07 08-09 09-10 10-11 11-12 12-13 Estimates

Planted Area (M Acres) 57.2 57.3 63.2 59.2 53.6 54.4 55.7 56.5

Harvested Area (Acres) 50.1 46.8 55.7 49.9 47.6 45.7 49.0 48.6

Yield (Bu/Acre) 42.0 38.6 44.9 44.5 46.3 43.7 46.3 45.5

Beginning Stocks (M Bu) 540 571 306 656 976 862 743 716

Production 2,103 1,808 2,499 2,218 2,207 1,999 2,269 2,211

Imports 81 122 127 119 97 112 130 125

Supply,Total 2,725 2,501 2,932 2,993 3,279 2,974 3,142 3,052

Food 915 938 927 919 926 941 950 955

Seed 78 82 78 69 71 76 75 75

Feed & Residual 157 117 255 150 132 164 350 150

Domestic, total 1,151 1,137 1,260 1,138 1,128 1,182 1,375 1,180

Total Exports 1,003 908 1,015 879 1,289 1,050 1,050 1,100

Use, total 2,154 2,045 2,275 2,018 2,417 2,231 2,425 2,280

Ending Stocks 571 456 656 976 862 743 716 772

Stocks/Use Ratio 26.5% 22.3% 28.9% 48.4% 35.7% 33.3% 29.5% 33.9%

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US All Wheat Ending Stocks


Data from 2015/16 and beyond are from USDA Baseline Projections

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2/11/2015 STEVE FREED ADMIS 14

Weather

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A Return To December-Like

Weather Is Expected Over The

Next Few Weeks. Warmer

Biased Weather Is Expected

From Jan. 21 To Feb. 4 And

Then The Pattern Will Begin To

Wane. The Next Period Of

Colder Weather Will Occur

During Mid- To Possibly Late

February. Sufficient Warm

Weather Is Expected Over The

Latter Part Of January That It

Will Be Difficult To Get

Temperatures To Fall Below

Average After The February

Chill Arrives. Rain Is Expected

Resume In California During

The Last Ten Days Of January

And Continue For A Little While

Into February. Most Of The

Wetter Bias Expected In The

Southwestern U.S. Will Further

Ease Dryness, But It May Not Be

Drought Busting Moisture. Help

From MJO And El Nino Is

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Authors: Santiago Begueria, Borja Latorre, Fergus Reig, Sergio M. Vincente-Serrano

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El Nino-like Conditions Will Continue Diminishing Over The Next Few

Weeks, But There Is Still Some Potential That It Will Try For A Third Time To

Evolve In 2015. That Places Southeastern Asia On A Watch List Until El

Nino Like Conditions Disappear Entirely. Drought Conditions In Australia,

Ukraine, Russia, Northeastern China And The Southwestern United States

Will Be Eased This Spring, But A Multi-Year Drought Will Continue In

Northeastern Brazil And May Linger Into The Autumn In Parts Of Chile.

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World Agricultural Outlook BoardInteragency Commodity Estimates Committee Forecasts

Lockup Briefing

January 12, 2015

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Price Summary

January 12, 2015

2013/14

estimate

2014/15

forecast

Change from

December 10

Change from

2013/14

Percent Percent

Crops and products

Wheat ($/bu) 6.87 6.10 1.7 -11.2

Rice ($/cwt) 16.10 14.10 -2.8 -12.4

Corn ($/bu) 4.46 3.65 4.3 -18.2

Soybeans ($/bu) 13.00 10.20 2.0 -21.5

Soybean oil (¢/lb) 38.23 33.00 -2.9 -13.7

Soybean meal ($/s.t.) 489.94 360.00 0.0 -26.5

Cotton (¢/lb) 77.90 61.50 0.0 -21.1

Livestock

Steers ($/cwt) 154.6 165.0 -0.6 6.8

Hogs ($/cwt) 76.0 62.5 -4.9 -17.8

Broilers (¢/lb) 104.9 103.3 -0.7 -1.6

Turkeys (¢/lb) 107.6 107.0 0.0 -0.6

Dairy products

Cheese 2.16 1.63 -2.0 -24.2

Butter 2.14 1.66 -3.8 -22.5

Nonfat dry milk 1.77 1.30 -5.2 -26.5

Dry whey 0.65 0.57 -1.2 -13.5

Milk classes

Class III ($/cwt) 22.34 16.60 -2.1 -25.7

Class IV ($/cwt) 22.09 16.05 -5.0 -27.3

All milk ($/cwt) 23.97 18.15 -3.7 -24.3

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Corn

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U.S. Corn Supply and Demand

January 12, 2015

2013/14

estimate

2014/15

forecast

Change from

December 10

Change from

2013/14

Percent Percent

Planted area (million acres) 95.4 90.6 -0.3 -5.0

Harvested area (million acres) 87.5 83.1 0.0 -4.9

Yield (bushels per acre) 158.1 171.0 -1.4 8.2

Million bushels

Beginning stocks 821 1,232 -0.3 50.0

Production 13,829 14,216 -1.3 2.8

Imports 36 25 0.0 -30.1

Total supply 14,686 15,472 -1.2 5.4

Feed and residual 5,036 5,275 -1.9 4.8

Food, seed, and industrial 6,501 6,570 0.4 1.1

Ethanol 5,134 5,175 0.5 0.8

Domestic use 11,537 11,845 -0.6 2.7

Exports 1,917 1,750 0.0 -8.7

Total use 13,454 13,595 -0.5 1.0

Ending stocks 1,232 1,877 -6.0 52.4

Percent

Stocks to use ratio 9.2 13.8

Dollars per bushel

Average market price 4.46 3.35/3.95 4.3 -18.2

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Soybeans

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Crop Year Beginning

Soybean Production - Major Exporters

Other

Brazil

Argentina

US

Most Recent: As Of 12/10/2014


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U.S. Soybean Supply and Demand

January 12, 2015

2013/14

estimate

2014/15

forecast

Change from

December 10

Change from

2013/14

Percent Percent

Planted area (million acres) 76.8 83.7 -0.6 8.9

Harvested area (million acres) 76.3 83.1 -0.4 8.9

Yield (bushels per acre) 44.0 47.8 0.7 8.5

Million bushels

Beginning stocks 141 92 0.0 -34.6

Production 3,358 3,969 0.3 18.2

Imports 72 15 0.0 -79.1

Total supply 3,570 4,076 0.3 14.2

Crush 1,734 1,780 0.0 2.7

Seed and residual 98 116 0.7 18.7

Domestic use 1,832 1,896 0.0 3.5

Exports 1,647 1,770 0.6 7.5

Total use 3,478 3,666 0.3 5.4

Ending stocks 92 410 0.0 345.7

Percent


Dollars per bushel


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Wheat

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34

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European Union, 30.00, 19%

United States, 25.17, 16%

Canada, 23.00, 14%Russia, 20.00, 13%

Australia, 17.50, 11%

Ukraine, 11.00, 7%

Kazakhstan, 6.00, 4%

Argentina, 6.00, 4%

Turkey, 3.80, 2%India, 3.50, 2%

Other, 13.22, 8%

World Top Wheat Exporters

2014/2015 Est: 159.19 MMT

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U.S. Wheat Supply and Demand

January 12, 2015

2013/14

estimate

2014/15

forecast

Change from

December 10

Change from

2013/14

Percent Percent

Planted area (million acres) 56.2 56.8 0.0 1.0

Harvested area (million acres) 45.3 46.4 0.0 2.3

Yield (bushels per acre) 47.1 43.7 0.0 -7.2

Million bushels

Beginning stocks 718 590 0.1 -17.8

Production 2,135 2,026 0.0 -5.1

Imports 169 180 0.0 6.8

Total supply 3,021 2,796 0.0 -7.5

Food use 952 960 0.0 0.8

Seed 77 74 -2.7 -4.0

Feed and residual 226 150 -16.7 -33.5

Domestic use 1,255 1,184 -2.6 -5.7

Exports 1,176 925 0.0 -21.4

Total use 2,431 2,109 -1.5 -13.3

Ending stocks 590 687 5.0 16.4

Percent


Dollars per bushel


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World Population Density

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2000/11 2014/15 % Change

Population (billion) 6.13 7.28 + 19 %

Palm Oil 23.72 60.55 + 155 %

Soybean Oil 26.46 46.53 + 76 %

Soymeal 115.78 195.01 + 68 %

Corn 609.18 972.21 + 60 %

Wheat 585.51 712.58 + 22 %

Pork 84.74 111.17 + 31 %

Beef 52.87 56.89 + 8 %

Milk 439.38 582.74 + 33 %

Global Consumption SnapshotMillion Metric Tons (except where noted)

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Mill

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World Planted Acres - By Crop

Sunflower

Rapeseed

Sorghum

Barley

Soybeans

Rice

Corn

Wheat

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World Corn Yields - Tonnes / Hectre

US

Brazil

EU

FSU

China

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1.70

1.90

2.10

2.30

2.50

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3.30

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

World Soybean Yields - Tonnes / Hectre

US

Brazil

Argentina

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

World Wheat Yields - Tonnes / Hectre

US

Canada

EU

FSU

China

Australia

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-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%2

00

1Q

1

2002

Q1

200

3Q

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200

4Q

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5Q

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6Q

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7Q

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4Q

1

GDP Comparison - Year-Over-Year Change

US

EU

China

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$10,419

$47,299

$41,588

$4,994

$9,679

$6,479

$8,311

$40,210

$36,073

$3,336

$6,747

$4,051

$7,170

$36,926

$33,714

$2,208

$4,865

$2,521

World

Developed

Developed less US

Developing

Former Centrally Planned

Emerging Markets

Real 2005 Per Capita ($) GDP - Decade Averages

2001-10

2011-20

2021-30

SourceUSDA Baseline Projections

45

2.42%

1.70%

1.54%

4.06%

3.66%

4.80%

1.93%

1.38%

1.08%

4.06%

3.43%

4.69%

1.35%

0.81%

0.83%

4.16%

4.63%

4.99%

World

Developed

Developed less US

Developing

Former Centrally Planned

Emerging Markets

Real 2005 Per Capita ($) GDP Annual Growth - Decade Average

2001-10

2011-20

2021-30

SourceUSDA Baseline Projections

46

46

Weekly US dollar Index; bullish

Buy a dip in March Index near 90.70. risk 150 points objective

95.50

47

47

Weekly S&P 500 futures chart;

bullish

Jan? bullish beyond

Buy March E-Mini 2020 call at 45.50

Buy March E-Mini 2050 call at 31.00

48

48

Weekly Crude oil futures chart; Bearish until

Feb 15

On $5 2 day washout buy June Crude 54/60

bull call

49

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Weekly 30 year Treasury Bond; bullish

Buy 30 year March bond near 145.00 objective

151.00

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