Market Outlook for Corn, Wheat, and Soybeans

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1 Market Outlook for Corn, Wheat, and Soybeans Identifying Risks - Protecting Profits Can you go wrong with $5 Corn, $12 Beans and $8 Wheat? Progressive Farmer Meeting St. Johns, Michigan Jim Hilker Agriculture, Food, and Resource Economics Department Michigan State University March 14, 2008

2 MONTHLY CORN FUTURES

4 Corn and Soy Meetings 2008 %Change in Plantings, Alma Corn Soys Wheat Average Min Max Standard Deviation Median # took

5 Corn and Soy Meetings 2008 %Change in Plantings, Coldwater Corn Soys Wheat Average Min Max Standard Deviation Median # took

6 Corn and Soy Meetings 2008 %Change in Plantings, Monroe Corn Soys Wheat Average Min Max Standard Deviation Median # took

7 Corn and Soy Meetings 2008 %Change in Plantings, Plainwell Corn Soys Wheat Average Min Max Standard Deviation Median # took

8 Corn and Soy Meetings 2008 %Change in Plantings, Peck Corn Soys Wheat Average Min Max Standard Deviation Median # took

9 Corn and Soy Meetings 2008 %Change in Plantings, Frankenmuth Corn Soys Wheat Average Min Max Standard Deviation Median # took

10 Corn and Soy Meetings 2008 %Change in Plantings, Combined Corn Soys Wheat Average Min Max Standard Deviation Median # took

15 Weekly Natural Gas Futures

20 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

21 Corn Yields Years Corn Yields Linear (Corn Yields) Bushels/Acre

22 Corn Yields Years Corn Yields Linear (Corn Yields) Bushels/Acre

23 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

27 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

28 Ethanol Futures

29 Gasoline Futures

35 Policy Themes Dec 19, 2007: New energy bill signed by President (EISA) Corn ethanol is mandated to grow from 9 billion gallons in 2008 to 13.2 in 2012 to 15 in 2015 Was 7.5 in 2012 in 1995 Energy Act Federal and state tax credits Oxygenation requirements Macroeconomic policy (e.g., exchange rates, growth, inflation, and interest rates)

36 ENERGY MARKETS Crystal balls are very cloudy High by historical standards Extremely volatile Linkages to commodities Price of ethanol driven by price of oil which drives gasoline which in turn sets parameters on break-even prices for corn to ethanol manufacturers.

37 Current ethanol capacity is 7.5 B gal 5.8 B gal under construction 13+ B gal within next three years Several plants were placed on hold in mid and late 2006 as expected profit prospects dimmed B illio n g a l Renewable Fuel Standard for Conventional Biofuels

38 Corn Price Table1: Estimated Break Even Ethanol Prices for a New Plant 0% Return on Equity 12% Return on Equity 60 Million Gallon Plant 120 Million Gallon Plant 60 Million Gallon Plant 120 Million Gallon Plant $2.00 $1.19 $1.14 $1.32 $1.24 $3.00 $1.44 $1.40 $1.57 $1.49 $4.00 $1.70 $1.66 $1.83 $1.75 $5.00 $1.96 $1.91 $2.09 $2.00 $6.00 $2.21 $2.16 $2.34 $2.25 Source: Eidman V. Assumes: $90/bl oil, $2.74/gal wholesale gasoline price, DDGS price = 90% corn price, Inv = $ m gal or $ m gal Jan 29, 2008: Delivered $5.01, Ethanol $2.20, Natural $7.99/mmBtu

39 Estimated Historical Ethanol Gross Margins

40 Costs Gross Margin Needs to Cover $ $0.90 gal (Eidman) Capital is $0.25 of this component

41 Ethanol to Gas Relationship Sold at a premium when needed for an oxygenate. Averaged $0.64/gal in 2006 (wholesale) Has fallen as this market is getting filled and in response to logistics challenges 2007 premium fell to $0.10/gal Oct 2007 discount was $0.45 Long-run with substantial volume will sell closer to its relative energy value

46 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

52 Exports Years Exports Linear (Exports) Bushels(millions)

53 U.S. Grain Exports GRAINS INSPECTED AND/OR WEIGHED FOR EXPORT - 1,000 BUSHELS CURRENT PREVIOUS WEEK ENDING MARKET YEAR MARKET YEAR GRAIN 03/06/08 02/28/08 03/08/07 TO DATE TO DATE WHEAT 18,122 17,013 20, , ,351 RYE OATS BARLEY ,540 16,429 FLAXSEED , CORN 44,791 50,122 37,365 1,324,799 1,126,234 SORGHUM 5,252 4,634 2, ,015 81,738 SOYBEANS 29,857 34,081 29, , ,476 SUNFLOWER TOTAL 98, ,897 90,786 3,287,172 2,701,

54 U.S. Grain Export Sales USDA Export Sales Report 03/13 07:30 Export Sales Report for Week Ending 03/06/08 (in mil bus) Weekly New Crop Sales GRAINS Sales Unshipped Total Prev Yr Weekly Unshipped Corn Sorghum Soybeans All Wheat Durum Hard Red Spring Hard Red Winter Soft Red Winter White Wheat OTHER COMMODITIES Soyoil (000 mt) Soymeal (000 mt) Rice (000 mt) Upland Cotton(000bales)

55 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

56 World Coarse Grain Supply and Use 1/ (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : : 2005/06 : World 3/ : United States : Total foreign : Major exporters 4/ : Argentina : Australia : Canada : Major importers 5/ : EU-27 6/ : Japan : Mexico : N. Afr & Mideast 7/: Saudi Arabia : Southeast Asia 8/ : South Korea : Selected other : Brazil : China : FSU-12 : Russia : Ukraine : : ===============================================================================

57 World Coarse Grain Supply and Use 1/ (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : 2006/07 (Estimated) : World 3/ : United States : Total foreign : Major exporters 4/ : Argentina : Australia : Canada : Major importers 5/ : EU-27 6/ : Japan : Mexico : N. Afr & Mideast 7/: Saudi Arabia : Southeast Asia 8/ : South Korea : Selected other : Brazil : China : FSU-12 : Russia : Ukraine : ===============================================================================

58 World Coarse Grain Supply and Use 1/ (Cont'd.) (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : : 2007/08 (Projected) World 3/ : February : March : United States : February : March : Total foreign : February : March : Major exporters 4/ : February : March : Argentina Feb : Mar : Australia Feb : Mar : Canada Feb : Mar : ===============================================================================

59 World Coarse Grain Supply and Use 1/ (Cont'd.) (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : 2007/08 (Projected) Major importers 5/ : February : March : EU-27 6/ Feb : Mar : Japan Feb : Mar : Mexico Feb : Mar : N Afr/M.East 7/Feb : Mar : Saudi Arabia Feb : Mar : S.-east Asia 8/Feb : Mar : South Korea Feb : Mar : Selected other : Brazil Feb : Mar : China Feb : Mar : FSU-12 Feb : Mar : Russia Feb : Mar : Ukraine Feb : Mar : ===============================================================================

61 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

62 Corn Prices Years Prices/bushel

63 Corn Prices versus E.S Years Prices/bushel Ending Stocks

64 Corn Prices versus E.S. to Use Years 1978 Prices/bushel Ending Stocks

65 U.S. Corn Price vs Ending Stocks/Use Ratio Price ($/BU) Ending Stocks/Use Ratio

66 Corn Futures Month Year Close Mar May July Sept Dec Mar May July Dec Dec

67 Corn Futures Futures Detail DAY CORN (C) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '6s 3'0 558'0 568'0 558' /13/08 13:41 chart options May '4s 2'2 568'4 579'4 567' /13/08 13:41 chart options Jul '4s 2'0 581'4 591'0 579' /13/08 13:41 chart options Sep '0s 4'2 584'0 588'6 580' /13/08 13:41 chart options Dec '2s 4'2 581'4 590'0 579' /13/08 13:41 chart options Mar '4s 4'6 591'0 597'2 587' /13/08 13:41 chart options May '0s 5'0 594'0 601'0 591' /13/08 13:41 chart options Jul '0s 5'0 594'4 601'0 594' /13/08 13:41 chart options Dec '4s 2'0 555'4 559'0 555' /13/08 13:41 chart options Mar '4s 3' /13/08 13:41 chart options Jul '0s 3' /13/08 13:41 chart options Dec '4s 2'0 556'0 556'0 552' /13/08 13:41 Thu, Mar 13, :15 PM CDT *Quotes are in market time

68 May 08 Corn Futures

70 July 08 Corn Futures

72 Dec 08 Corn Futures

74 TABLE 1 SUPPLY/DEMAND BALANCE SHEET FOR CORN Est. Proj. USDA Ave (million acres) Acres Planted Acres Harvested Bu./Harvested Acre (million bushels) Beginning Stocks Production Imports Total Supply Use: Feed and Residual Food, Seed and Ind Ethanol for fuel Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $1.98 $1.98 $1.95 $1.95 $1.95 $1.95 $1.95 $1.95 U.S. Season Average Farm Price, $/Bu. $2.32 $2.42 $2.06 $2.00 $3.04 $4.00 $4.60 $3.85 Source: USDA and Jim Hilker. ( )

75 Corn Futures Futures Detail DAY CORN (C) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '6s 3'0 558'0 568'0 558' /13/08 13:41 chart options May '4s 2'2 568'4 579'4 567' /13/08 13:41 chart options Jul '4s 2'0 581'4 591'0 579' /13/08 13:41 chart options Sep '0s 4'2 584'0 588'6 580' /13/08 13:41 chart options Dec '2s 4'2 581'4 590'0 579' /13/08 13:41 chart options Mar '4s 4'6 591'0 597'2 587' /13/08 13:41 chart options May '0s 5'0 594'0 601'0 591' /13/08 13:41 chart options Jul '0s 5'0 594'4 601'0 594' /13/08 13:41 chart options Dec '4s 2'0 555'4 559'0 555' /13/08 13:41 chart options Mar '4s 3' /13/08 13:41 chart options Jul '0s 3' /13/08 13:41 chart options Dec '4s 2'0 556'0 556'0 552' /13/08 13:41 Thu, Mar 13, :15 PM CDT *Quotes are in market time

76 Corn Futures Month Year Close Mar May July Sept Dec Mar May July Dec Dec

77 Ethanol Futures

78 Ethanol Plants Bu/MillionsRunning Sum Caro /07 Woodbury Albion Riga 06/ months Riga 07/ /08 Maryville Ithaca /09 Maryville II or 09?? Riga II? or 09?? Watervliet Corunna McBain Manistee Alma

79 Michigan Corn Yields Years Corn Yields "Trend Yields" Bushels/Acre

80 1/11/2008 Michigan Supply/Use Balance Sheet for Corn Estimated Projected Projected Corn Marketing Year 2004/ / / / /09 Corn Grain Production Thousand Acres Planted Acres Harvested Acres Yield bushels/acre Million Bushels Beginning stocks Production Imports Total Supply Corn Use Livestock Feed Ethanol Canada for Ethanol Other Exports to Canda Exports out of Michigan to U.S Other Uses and Residual Total Disapperance Ending Stocks

81 MONTHLY SPRING WHEAT FUTURES

82 May Spring Wheat Futures

83 MONTHLY CBT WHEAT FUTURES

86 TABLE 2 SUPPLY/DEMAND BALANCE SHEET FOR WHEAT Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Food Seed Feed and Residual Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $2.80 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 U.S. Season Average U.S. $/Bu. $3.40 $3.40 $3.42 $4.26 $6.65 $7.00 $5.50 Michigan $/Bu. $3.35 $2.95 $3.05 $3.40 $5.30 $6.10 $5.40 Source: USDA and Jim Hilker. ( )

89 TABLE 2 SUPPLY/DEMAND BALANCE SHEET FOR WHEAT Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Food Seed Feed and Residual Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $2.80 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 U.S. Season Average U.S. $/Bu. $3.40 $3.40 $3.42 $4.26 $6.65 $7.00 $5.50 Michigan $/Bu. $3.35 $2.95 $3.05 $3.40 $5.30 $6.10 $5.40 Source: USDA and Jim Hilker. ( )

90 Wheat Yields Wheat Yield Years Linear (Wheat Yield) Bushels/Acre

92 TABLE 2 SUPPLY/DEMAND BALANCE SHEET FOR WHEAT Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Food Seed Feed and Residual Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $2.80 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 U.S. Season Average U.S. $/Bu. $3.40 $3.40 $3.42 $4.26 $6.65 $7.00 $5.50 Michigan $/Bu. $3.35 $2.95 $3.05 $3.40 $5.30 $6.10 $5.40 Source: USDA and Jim Hilker. ( )

93 U.S. Grain Exports GRAINS INSPECTED AND/OR WEIGHED FOR EXPORT - 1,000 BUSHELS CURRENT PREVIOUS WEEK ENDING MARKET YEAR MARKET YEAR GRAIN 03/06/08 02/28/08 03/08/07 TO DATE TO DATE WHEAT 18,122 17,013 20, , ,351 RYE OATS BARLEY ,540 16,429 FLAXSEED , CORN 44,791 50,122 37,365 1,324,799 1,126,234 SORGHUM 5,252 4,634 2, ,015 81,738 SOYBEANS 29,857 34,081 29, , ,476 SUNFLOWER TOTAL 98, ,897 90,786 3,287,172 2,701,

94 U.S. Grain Export Sales USDA Export Sales Report 03/13 07:30 Export Sales Report for Week Ending 03/06/08 (in mil bus) Weekly New Crop Sales GRAINS Sales Unshipped Total Prev Yr Weekly Unshipped Corn Sorghum Soybeans All Wheat Durum Hard Red Spring Hard Red Winter Soft Red Winter White Wheat OTHER COMMODITIES Soyoil (000 mt) Soymeal (000 mt) Rice (000 mt) Upland Cotton(000bales)

95 World Wheat Supply and Use 1/ (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : : 2005/06 : World 3/ : United States : Total foreign : Major exporters 4/ : Argentina : Australia : Canada : EU-27 5/ : Major importers 6/ : Brazil : China : Select. Mideast 7/ : N. Africa 8/ : Pakistan : Southeast Asia 9/ : Selected other : India : FSU-12 : Russia : Kazakhstan : Ukraine : : ===============================================================================

96 World Wheat Supply and Use 1/ (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : 2006/07 (Estimated) : World 3/ : United States : Total foreign : Major exporters 4/ : Argentina : Australia : Canada : EU-27 5/ : Major importers 6/ : Brazil : China : Select. Mideast 7/ : N. Africa 8/ : Pakistan : Southeast Asia 9/ : Selected other : India : FSU-12 : Russia : Kazakhstan : Ukraine : ===============================================================================

97 World Wheat Supply and Use 1/ (Cont'd.) (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== : : 2007/08 (Projected) World 3/ : February : March : United States : February : March : Total foreign : February : March : Major exporters 4/ : February : March : Argentina Feb : Mar : Australia Feb : Mar : Canada Feb : Mar : EU-27 5/ Feb : Mar : ===============================================================================

98 World Wheat Supply and Use 1/ (Cont'd.) (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : Domestic 2/ : :stocks :Beginning:Produc-: :===============: : : stocks : tion :Imports: Feed : Total :Exports: =============================================================================== Major importers 6/ : February : March : Brazil Feb : Mar : China Feb : Mar : Sel. Mideast 7/Feb : Mar : N. Africa 8/ Feb : Mar : Pakistan Feb : Mar : SE Asia 9/ Feb : Mar : Selected other : India Feb : Mar : FSU-12 Feb : Mar : Russia Feb : Mar : Kazakhstan Feb : Mar : Ukraine Feb : Mar : ===============================================================================

100

101

102 TABLE 2 SUPPLY/DEMAND BALANCE SHEET FOR WHEAT Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Food Seed Feed and Residual Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $2.80 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 U.S. Season Average U.S. $/Bu. $3.40 $3.40 $3.42 $4.26 $6.65 $7.00 $5.50 Michigan $/Bu. $3.35 $2.95 $3.05 $3.40 $5.30 $6.10 $5.40 Source: USDA and Jim Hilker. ( )

103 Wheat Prices Years Prices/bushel

104 Wheat Prices versus E.S Years Prices/bushel Ending Stocks

105 Wheat Prices versus E.S. to Use Years Prices/bushel Ending Stocks

106 U.S. Wheat Price vs Ending Stocks/Use Ratio Price ($/BU) Ending Stocks/Use Ratio

107 Wheat Futures Month Year Close Mar May July Sept July July

108 Wheat Futures Futures Detail DAY WHEAT (W) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '0s -36'0 1275'0 1275'0 1275' /13/08 13:41 chart options May '0s -38'4 1265'0 1318'0 1240' /13/08 13:41 chart options Jul '4s -31'4 1234'0 1270'0 1210' /13/08 13:41 chart options Sep '4s -31'0 1241'0 1253'0 1217' /13/08 13:41 chart options Dec '4s -35'0 1248'0 1280'0 1220' /13/08 13:41 chart options Mar '0s -39'0 1225'0 1225'0 1225' /13/08 13:41 chart options May '0s 16' /13/08 13:41 chart options Jul '0s -22'4 1114'0 1125'0 1110' /13/08 13:41 chart options Sep '0s -12' /13/08 13:41 chart options Dec '0s -20' /13/08 13:41 chart options Jul '0s -20'0 1090'0 1110'0 1090' /13/08 13:41 Thu, Mar 13, :23 PM CDT *Quotes are in market time

109 May 08 Wheat Futures

110

111 July 08 Wheat Futures

112

113 Dec 08 Wheat Futures

114

115 TABLE 2 SUPPLY/DEMAND BALANCE SHEET FOR WHEAT Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Food Seed Feed and Residual Total Domestic Exports Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $2.80 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 U.S. Season Average U.S. $/Bu. $3.40 $3.40 $3.42 $4.26 $6.65 $7.00 $5.50 Michigan $/Bu. $3.35 $2.95 $3.05 $3.40 $5.30 $6.10 $5.40 Source: USDA and Jim Hilker. ( )

116 Wheat Futures Futures Detail DAY WHEAT (W) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '0s -36'0 1275'0 1275'0 1275' /13/08 13:41 chart options May '0s -38'4 1265'0 1318'0 1240' /13/08 13:41 chart options Jul '4s -31'4 1234'0 1270'0 1210' /13/08 13:41 chart options Sep '4s -31'0 1241'0 1253'0 1217' /13/08 13:41 chart options Dec '4s -35'0 1248'0 1280'0 1220' /13/08 13:41 chart options Mar '0s -39'0 1225'0 1225'0 1225' /13/08 13:41 chart options May '0s 16' /13/08 13:41 chart options Jul '0s -22'4 1114'0 1125'0 1110' /13/08 13:41 chart options Sep '0s -12' /13/08 13:41 chart options Dec '0s -20' /13/08 13:41 chart options Jul '0s -20'0 1090'0 1110'0 1090' /13/08 13:41 Thu, Mar 13, :23 PM CDT *Quotes are in market time

117 Wheat Prices Years Prices/bushel

118 Wheat Prices Years Prices/bushel

119

120 Wheat Futures Futures Detail DAY WHEAT (W) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '0s -36'0 1275'0 1275'0 1275' /13/08 13:41 chart options May '0s -38'4 1265'0 1318'0 1240' /13/08 13:41 chart options Jul '4s -31'4 1234'0 1270'0 1210' /13/08 13:41 chart options Sep '4s -31'0 1241'0 1253'0 1217' /13/08 13:41 chart options Dec '4s -35'0 1248'0 1280'0 1220' /13/08 13:41 chart options Mar '0s -39'0 1225'0 1225'0 1225' /13/08 13:41 chart options May '0s 16' /13/08 13:41 chart options Jul '0s -22'4 1114'0 1125'0 1110' /13/08 13:41 chart options Sep '0s -12' /13/08 13:41 chart options Dec '0s -20' /13/08 13:41 chart options Jul '0s -20'0 1090'0 1110'0 1090' /13/08 13:41 Thu, Mar 13, :23 PM CDT *Quotes are in market time

121 Wheat Futures Month Year Close Mar May July Sept July July

122 MONTHLY SOYBEAN FUTURES

123

124 TABLE 3 SUPPLY/DEMAND BALANCE SHEET FOR SOYBEANS Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Crushings Exports Seed and Residual Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 U.S. Season Average Farm Price, $/Bu. $5.53 $7.34 $5.74 $5.66 $6.43 $10.40 $11.50 $9.25 Source: USDA and Jim Hilker. ( )

125 Soybean Yields Soybean Yield Years Linear (Soybean Yield) Bushels/Acre

126

127 U.S. Grain Exports GRAINS INSPECTED AND/OR WEIGHED FOR EXPORT - 1,000 BUSHELS CURRENT PREVIOUS WEEK ENDING MARKET YEAR MARKET YEAR GRAIN 03/06/08 02/28/08 03/08/07 TO DATE TO DATE WHEAT 18,122 17,013 20, , ,351 RYE OATS BARLEY ,540 16,429 FLAXSEED , CORN 44,791 50,122 37,365 1,324,799 1,126,234 SORGHUM 5,252 4,634 2, ,015 81,738 SOYBEANS 29,857 34,081 29, , ,476 SUNFLOWER TOTAL 98, ,897 90,786 3,287,172 2,701,

128 U.S. Grain Export Sales USDA Export Sales Report 03/13 07:30 Export Sales Report for Week Ending 03/06/08 (in mil bus) Weekly New Crop Sales GRAINS Sales Unshipped Total Prev Yr Weekly Unshipped Corn Sorghum Soybeans All Wheat Durum Hard Red Spring Hard Red Winter Soft Red Winter White Wheat OTHER COMMODITIES Soyoil (000 mt) Soymeal (000 mt) Rice (000 mt) Upland Cotton(000bales)

129 World Soybean Supply and Use 1/ (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : : :stocks :Beginning:Produc-: : Domestic : : : stocks : tion :Imports: Crush : Total :Exports: =============================================================================== : : 2005/06 World 2/ : United States : Total foreign : Major exporters 3/ : Argentina : Brazil : Major importers 4/ : China : EU-27 : Japan : Mexico : : : 2006/07 (Estimated) World 2/ : United States : Total foreign : Major exporters 3/ : Argentina : Brazil : Major importers 4/ : China : EU-27 : Japan : Mexico : ===============================================================================

130 World Soybean Supply and Use 1/ (Million Metric Tons) =============================================================================== : Supply : Use : :=========================:=======================:Ending Region : : : : : :stocks :Beginning:Produc-: : Domestic : : : stocks : tion :Imports: Crush : Total :Exports: =============================================================================== : 2007/08 (Projected) World 2/ : February : March : United States : February : March : Total foreign : February : March : Major exporters 3/ : February : March : Argentina Feb : Mar : Brazil Feb : Mar : Major importers 4/ : February : March : China Feb : Mar : EU-27 Feb : Mar : Japan Feb : Mar : Mexico Feb : Mar : ===============================================================================

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136 TABLE 3 SUPPLY/DEMAND BALANCE SHEET FOR SOYBEANS Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Crushings Exports Seed and Residual Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 U.S. Season Average Farm Price, $/Bu. $5.53 $7.34 $5.74 $5.66 $6.43 $10.40 $11.50 $9.25 Source: USDA and Jim Hilker. ( )

137 Soybean Prices Years Prices/bushel

138 Soybean Prices versus E.S Years Prices/bushel Ending Stocks

139 Soybean Prices versus E.S. to Use Years Prices/bushel Ending Stocks

140 U.S. Soybean Price vs Ending Stocks/Use Ratio Price ($/BU) Ending Stocks/Use Ratio

141 Soybean Futures Futures Detail DAY SOYBEANS (S) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '0s 8'0 1398'0 1412'0 1387' /13/08 13:41 chart options May '6s 7'6 1413'0 1430'4 1400' /13/08 13:41 chart options Jul '6s 8'2 1427'0 1444'0 1415' /13/08 13:41 chart options Aug '0s 6'0 1424'0 1429'0 1405' /13/08 13:41 chart options Sep '0s -1'0 1384'0 1390'0 1364' /13/08 13:41 chart options Nov '4s 3'2 1334'0 1348'0 1316' /13/08 13:41 chart options Jan '0s 5'0 1349'0 1353'0 1326' /13/08 13:41 chart options Mar '0s -1'0 1357'0 1358'0 1331' /13/08 13:41 chart options May '0s 6' /13/08 13:41 chart options Jul '0s -1'0 1363'0 1363'0 1338' /13/08 13:41 chart options Aug '0s -1' /13/08 13:41 chart options Sep '0s 0' /13/08 13:41 chart options Nov '0s -3'0 1290'0 1298'0 1275' /13/08 13:41 chart options Jul '0s -5' /13/08 13:41 chart options Nov '0s 0'0 1275'0 1275'0 1275' /13/08 13:41 Thu, Mar 13, :33 PM CDT *Quotes are in market time

142 Soy Sector Futures Month Year Soybeans Soymeal Soyoil Mar May July Sept Nov Dec 337 Dec Nov Dec 317 Dec Nov Dec 311 Dec 57.00

143 May 08 Soy Futures

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149 TABLE 3 SUPPLY/DEMAND BALANCE SHEET FOR SOYBEANS Est. Proj. USDA Ave (Million Acres) Acres Planted Acres Harvested Bu./Harvested Acre (Million Bushels) Beginning Stocks Production Imports Total Supply Use: Crushings Exports Seed and Residual Total Use Ending Stocks Ending Stocks, %of Use U.S. Loan Rate $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 U.S. Season Average Farm Price, $/Bu. $5.53 $7.34 $5.74 $5.66 $6.43 $10.40 $11.50 $9.25 Source: USDA and Jim Hilker. ( )

150 Nov 09 Soy Futures

151 Nov 10 Soy Futures

152 Soybean Futures Futures Detail DAY SOYBEANS (S) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar '0s 8'0 1398'0 1412'0 1387' /13/08 13:41 chart options May '6s 7'6 1413'0 1430'4 1400' /13/08 13:41 chart options Jul '6s 8'2 1427'0 1444'0 1415' /13/08 13:41 chart options Aug '0s 6'0 1424'0 1429'0 1405' /13/08 13:41 chart options Sep '0s -1'0 1384'0 1390'0 1364' /13/08 13:41 chart options Nov '4s 3'2 1334'0 1348'0 1316' /13/08 13:41 chart options Jan '0s 5'0 1349'0 1353'0 1326' /13/08 13:41 chart options Mar '0s -1'0 1357'0 1358'0 1331' /13/08 13:41 chart options May '0s 6' /13/08 13:41 chart options Jul '0s -1'0 1363'0 1363'0 1338' /13/08 13:41 chart options Aug '0s -1' /13/08 13:41 chart options Sep '0s 0' /13/08 13:41 chart options Nov '0s -3'0 1290'0 1298'0 1275' /13/08 13:41 chart options Jul '0s -5' /13/08 13:41 chart options Nov '0s 0'0 1275'0 1275'0 1275' /13/08 13:41 Thu, Mar 13, :33 PM CDT *Quotes are in market time

153 Soy Sector Futures Month Year Soybeans Soymeal Soyoil Mar May July Sept Nov Dec 337 Dec Nov Dec 317 Dec Nov Dec 311 Dec 57.00

154 U.S. Soybeans and Products Supply and Use (Domestic Measure) 1/ =============================================================================== : : : 2007/08 Projections Item : 2005/06 : 2006/07 :=============================== : : Est. : February March =============================================================================== : : Million pounds SOYBEAN OIL: : Beginning stocks : 1,699 3,010 2,904 2,904 Production : 20,387 20,487 21,010 21,195 Imports : Supply, total : 22,122 23,535 23,952 24,137 Domestic : 17,959 18,743 19,500 18,900 For methyl ester 4/ : 1,555 2,796 3,400 2,800 Exports : 1,153 1,888 1,950 2,400 Use, total : 19,112 20,630 21,450 21,300 Ending stocks : 3,010 2,904 2,502 2,837 Average price (c/lb) 2/ : : : : Thousand short tons SOYBEAN MEAL: : Beginning stocks : Production : 41,244 43,027 43,784 43,784 Imports : Supply, total : 41,557 43,497 44,300 44,300 Domestic : 33,195 34,360 35,300 35,300 Exports : 8,048 8,786 8,700 8,700 Use, total : 41,243 43,146 44,000 44,000 Ending stocks : Average price ($/s.t.) 2/ : : ===============================================================================

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161 Soymeal Futures Futures Detail DAY SOYBEAN MEAL (SM) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar s /13/08 13:55 chart options May s /13/08 13:55 chart options Jul s /13/08 13:55 chart options Aug s /13/08 13:55 chart options Sep s /13/08 13:55 chart options Oct s /13/08 13:55 chart options Dec s /13/08 13:55 chart options Jan s /13/08 13:55 chart options Mar s /13/08 13:55 chart options May s /13/08 13:55 chart options Jul s /13/08 13:55 chart options Aug s /13/08 13:55 chart options Sep s /13/08 13:55 chart options Oct s /13/08 13:55 chart options Dec s /13/08 13:55 chart options Jul s /13/08 13:55 chart options Oct s /13/08 13:55 chart options Dec s /13/08 13:55 Thu, Mar 13, :37 PM CDT *Quotes are in market time

162 July 08 Meal Futures

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164 Soyoil Futures Futures Detail DAY SOYBEAN OIL (BO) [10 minute delay] Future Symbol Search Symbol Lookup More Info Month Last Chg Open High Low Volume Open Int Trade Time chart options Mar s /13/08 12:25 chart options May s /13/08 13:41 chart options Jul s /13/08 13:41 chart options Aug s /13/08 13:41 chart options Sep s /13/08 13:41 chart options Oct s /13/08 13:41 chart options Dec s /13/08 13:41 chart options Jan s /13/08 13:41 chart options Mar s /13/08 13:41 chart options May s /13/08 13:41 chart options Jul s /13/08 13:41 chart options Aug s /13/08 13:41 chart options Sep s /13/08 13:41 chart options Oct s /13/08 13:41 chart options Dec s /13/08 13:41 chart options Jul s /13/08 13:41 chart options Oct s /13/08 13:41 chart options Dec s /13/08 13:41 Thu, Mar 13, :40 PM CDT *Quotes are in market time

165 May 08 SoyOil Futures

166 Soy Sector Futures Month Year Soybeans Soymeal Soyoil Mar May July Sept Nov Dec 337 Dec Nov Dec 317 Dec Nov Dec 311 Dec 57.00

167 My Cash Bids for U.S. Zip Code 48824, Radius 100 miles Elevator Distance Date Corn Corn, New Soybeans Soybeans, New HRW #1 SRW ADM GRAIN CO 13 3/ ADM GRAIN CO 17 3/ MACCPS 29 3/ WOODBURY GRAIN LLC 30 3/

168 Break-even soybean price / bu for alternative cor soy yields given corn price of 5.00 $/bu Soybean yield, bu/acre Corn 130 $12.45 $10.93 $9.75 yield 140 $13.73 $12.05 $10.74 bu/acre 150 $15.01 $13.17 $11.74

169 Break-even soybean yield (bu/ acre) for alternativ corn & soybean prices given an expected corn yield of 140 bu / acre Soybean price, $/ bu $9.60 $12.00 $14.40 Corn $ price $ $/bu $

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171 SO HOW DO I MAKE CORN AND SOYBEAN PRICING DECISIONS? The first step in this new approach is to select the appropriate time window for pricing corn and soybean crops. The second step in the new approach is to determine the relevant set of crop pricing strategies. The third step in the new approach is to decide on the proportions of the crop to be marketed via each of the pricing strategies. The fourth step in the new approach is to evaluate performance after the marketing window is completed. University of Illinois,

172 Decide on the proportions of the crop to be marketed via each of the pricing strategies. Mechanical Active Self-Directed %? %? Externally-Managed %? %?

173 Decide on the proportions of the crop to be marketed via each of the pricing strategies.

174 Decide on the proportions of the crop to be marketed via each of the pricing strategies. Mechanical Active Self-Directed 0 %? 25 %? Externally-Managed 25%? 50 %?

175 Decide on the proportions of the crop to be marketed via each of the pricing strategies. Mechanical Active Self-Directed 60 %? 10 %? Externally-Managed 20%? 10 %?

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Soybeans face make or break moment Futures need a two-fer to avoid losses By Bryce Knorr, senior grain market analyst

Soybeans face make or break moment Futures need a two-fer to avoid losses By Bryce Knorr, senior grain market analyst A year ago USDA shocked the market by cutting its forecast of soybean production, helping