World grain & protein outlook for the current crop year and observations for 2015/16 Presented by: Emily French

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1 World grain & protein outlook for the current crop year and observations for 215/16 Presented by: Emily French Australian Grains Industry Conference Melbourne, Australia 27 July 215

Global daily grain consumption rates MT / day 28 26 24 22 2 18 16 14 12 1 Global daily consumption rates Corn Wheat Corn daily consumption rate has increased from 1.

2 Global daily grain consumption rates MT / day Global daily consumption rates Corn Wheat Corn daily consumption rate has increased from 1.94MMT / day in 25 to a forecasted 2.71MMT / day this year (+4%). Growth accelerated 25 forward on the back of U.S. ethanol program. Wheat daily consumption rate has been stagnant from 1.69MMT / day in 25 to a forecasted 1.95MMT (+15.5%). Past few years growth has been from feed demand

3 Global grain supply cushions Global supply cushion (days) Corn Wheat Wheat its supply cushion has been on a constant build since 212 and returns to levels of 29/1 with China and India carrying the majority of the world stocks. Corn its supply cushion had only a mild build this past year despite record world production this past year!

4 Global daily oilseed consumption rates 9 8 Global oilseed consumption rates 25 Soy daily consumption rate has increased from 591KMT / day to 839KMT / day in 215 (+42%) MT / day Canola daily consumption rate (2 nd axis) has increased from 131KMT / day to 19.2KMT / day in 215 (+45%) Sunflower daily consumption rate (2 nd axis) has increased from 81KMT / day to 11KMT / day in 214 (36%) Soy Canola Sun

5 Global oilseed supply cushions Global oilseed supply cushion Soy supply cushion looks to hit a record = 19 days of use with a yearly build since 211 on expanded (1) South American plantings, (2) a record Argentine crop this past campaign and (3) higher U.S. plantings Canola Soy Sun

6 Global daily veg oil consumption rates days / use Global veg oil consumption rates Palm oil daily consumption rate has increased from 92.6KMT / day to 176.3KMT / day in 215 (+9%) Canola oil daily consumption rate has increased from 47KMT / day to 75KMT / day in 215 (+6%). Soy oil daily consumption rate has increased from 92KMT / day to 135KMT / day in 215 (+47%) Palm Canola Soy

7 Global veg oil supply cushions World veg oil supply cushion Palm Canola Soy Palm the world s largest produced veg oil, largest export trade and cheapest veg oil (typically) has shown a slow decline days since the peak of 54.3 days in 211 to a forecasted 4 days for 215/16. Canola supply cushion is on the decline with smaller crops expected in both Canada and Europe. Soy oil stable at 27 days for the past 3 years

8 Wheat

9 Wheat prices have maintained their downtrend aside from a few upward price swings due to quality concerns in the U.S., lack of rains in Canada & the El Nino risk in Australia World supply cushion days of use available to world buyers = 113 days vs 11 days 12 World wheat supply cushion

10 Black Sea FSU & Europe sets the tone for world wheat values Europe wheat exports a record this past year! Black Sea FSU as goes production, goes exports 4, 25.% 45, 3.% 35, 3, 2.% 4, 35, 25.% 25, 2, 15, 15.% 1.% 3, 25, 2, 15, 2.% 15.% 1.% 1, 5, 5.% 1, 5, 5.%.%.%

11 The U.S. the world s wheat storage tank and back stop for world wheat buyers 4, 35, 3, 35.% 3.% 25.% 3, ConsiliAgra view is U.S. ending stocks trend toward over 27MMT (USDA = 23MMT) or back to 29/1 levels U.S. ending stocks 25, 2.% 25, 2, 15, 1, 5, 15.% 1.% 5.% 2, 15, 1, 5,.%

12 China and India non-factors for time present China + India wheat production - % world share has plateaued China + India wheat ending stocks build, build, build from 25% to 45% in the past decade 25, 35.% 12, 5.% 2, 3.% 1, 45.% 4.% 15, 25.% 2.% 8, 35.% 3.% 1, 15.% 6, 25.% 2.% 5, 1.% 5.% 4, 2, 15.% 1.%.% 5.%.%

13 China and India non-factors for time present China wheat consumption impacted by dietary shift from wheat to fats & proteins trending towards the 1-year average = 112MMT 14, China wheat consumption 12, Conversely with its 1 billion person population, India s domestic consumption is on the rise from 7MMT to 96MMT in the past decade. Emerging milling / quality wheat importer? 12, 1, 1, 8, 6, 4, 2, 8, 6, 4, 2,

14 Wheat highlights & conclusions Black Sea geopolitical risk - Russia Canadian production World milling wheat quality supply constraint India made in India increased demand for milling quality World feed demand more competition El Nino back in the headlines Australia production threat Beginning stocks for 215/16 19MMT larger than 214/15 with 8MMT ex Europe & Black Sea FSU

15 Corn

16 Corn faces the question of the U.S. corn crop versus world demand driven by feed as energy plateaus 5% price retracement from LH June / FH July rally World supply cushion (7 days) very little build even with world record corn production in 214/15! 8 World corn supply cushion

17 World FSI demand has peaked will either stagnant or contract depending on profitability. World feed demand will be the focus for growth World FSI consumption slowing / idle World feed demand will bear greater burden to create growth 4, 35, 3, 25, 2, 15, 1, 5, 7, 6, 5, 4, 3, 2, 1, 7.% 68.% 66.% 64.% 62.% 6.% 58.% 56.% 54.% 52.% United States World

18 Foreign production is expanding led by Black Sea region (FSU - Ukraine) and Brazil In 1 years production has increased nearly 65MMT 9, 8, 7, 6, 5, 4, 3, 2, 1, As a result U.S. share of world export trade has plummeted but is influenced by what other exporters produce 8.% 7.% 6.% 5.% 4.% 3.% 2.% 1.%.% Brazil Black Sea FSU

19 The China factor 18 Based on its own daily consumption rate of 63KMT / day (2.7MMT / day world) it has a supply cushion = days 7 Remove China from world ending stocks and the supply cushion drops quickly World supply cushion - another look Days Consumption rate No China With China

20 If corn is going to have a supply dislocation or shock story it will have to come from the U.S. or yield issues in Ukraine & north Europe

21 Corn highlights & conclusions Brasil safrinha corn production another record Ukraine yield potential limited producer financing, costly inputs U.S. plantings market lower than the June plantings U.S. record yield won t be repeated 215/16 and plantings will be smaller than the June estimate A 5 bu / acre yield swing = 4 mil bu / 1.3MMT China corn production & strategic crop policy Beginning stocks for 215/16 19MMT larger than 214/15. China holds 8MMT or 41% of these stocks US holds 45.2MMT or 23% of these stocks Brasil holds 18.8MMT or 1% of these stocks

22 Sorghum potential growth market & the China factor

23 China is the game-changer for world sorghum 7, 68, 66, 64, World sorghum production 14, 12, 1, World sorghum producers 62, 6, 58, 56, 54, 52, 5, 8, 6, 4, 2, Argentina Australia United States

24 China is the game-changer for world sorghum 68, World sorghum consumption 14, China sorghum consumption vs production 66, 64, 62, 6, 58, 56, 54, 12, 1, 8, 6, 4, 2, Consumption Production 52,

25 Soybean complex

26 The world does not have a soybean supply issue. Rather, it has a crush capacity and soymeal supply issue. If global soymeal consumption increases at 3% per annum on average suggests the world will need another 42MMT by 22

27 World s largest and key soymeal exporters 5.% World's largest soymeal exporters SUMMARY: Argentina remains the world s largest soymeal exporter. Its crush capacity is estimated = 55MMT 4.% 3.% 2.% 1.%.% Argentina Brazil United States THUS: it is likely that little additional investment will be occur in either the US or Brasil crush capacity given overbuilt capacity in both Argentina and China ERGO: will world soymeal importers have to rely on Argentina and China for soymeal production / export growth?

28 This all feeds into the following conclusions: Soymeal / protein demand is the key: as goes soymeal goes flat price, goes crush margins, goes profitability of the feed sector goes crush rates The world veg oil market remains a buyer s market multiple origins & oils competing for food and fuel demand. This is a bearish characteristic The rebuild and potential record world soybean ending stocks, a supply cushion near 19 days and record South American soy bean production insures adequate / ample stocks. Black Sea sunflower oil will impact the world veg oil market positive & negative similar to the impact on the world wheat and corn markets. However - until the world solves the soymeal trade grid downside price risk will not be as aggressive as what world record ending soy stocks would suggest

29 About ConsiliAgra ConsiliAgra is a global consulting and brokerage firm providing actionable advice and strategies to those operating and trading within the global grain and oilseeds markets. The firm s services touch upon every part of the increasingly-complex agricultural markets, presenting a platform through which clients are able to gain a keen understanding of the integrated global agriculture industry; and to act upon this knowledge. We provide: Coordinated risk management (hedge structures and brokerage / clearing services) Active advising services Dynamic trading strategies (proprietary speculative structures) Right people introductions Commodity execution services Since its inception in 29, ConsiliAgra clients now range from international & domestic commercials to hedge funds and investment banks as well as a private money portfolio managers. Contact information: Emily French Founder, ConsiliAgra efrench@consiliagra.com Office: Mobile: This presentation is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any commodity. Although the statements of fact in this report are obtained from reliable sources, we do not guarantee their accuracy and any such information may be incomplete or condensed. All options and opinions are subject to change without notice.

The silent giant emerging economies & shi2ing market demands for the grain industry Presented by: Emily French

The silent giant emerging economies & shi2ing market demands for the grain industry Presented by: Emily French AAAC (WA) Outlook Perth, Australia 24 November 2016 2016 started volatile ends volatile. The