Grain Market Outlook and Marketing Strategies

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1 Grain Market Outlook and Marketing Strategies Presented by: Brian Roach Dec 6 & 7, 2016 Roach Ag Marketing, Ltd.

2 Disclaimer: Futures/options trading involves substantial risk of loss and trading may not be suitable for all investors. You should fully understand those risks prior to trading. Past financial results are not necessarily indicative of future performance. This material should be construed as the solicitation of an offer to sell or the solicitation of an offer to buy the derivative(s) noted in any jurisdiction where such an offer or solicitation would be legal. These materials have been created for a select group of individuals, and are intended to be presented with the proper context and guidance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Roach Ag Marketing, Ltd. Roach Ag. Marketing is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact Roach Ag. Marketing designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Roach Ag. Marketing. Roach Ag Marketing, Ltd.

3 Roach Ag Marketing, Ltd. 568 East Yamato Road Suite 200 Boca Raton, FL Roach Ag Marketing, Ltd.

4 High Level View Population Growth Stable World growth with upsides U.S. energy independence Strong Dollar Big Demand needs Big Supply Accuracy in Marketing Roach Ag Marketing, Ltd.

5 Roach Ag Marketing, Ltd.

6 Growing 1.18% per year 83 million new mouths annually 8.5 billion people by billion people by 2050 Roach Ag Marketing, Ltd.

7 CIA & Gallup Roach Ag Marketing, Ltd.

8 Crude oil and Ethanol Roach Ag Marketing, Ltd.

9 Fracking changes the speed U.S. oil comes online at higher prices. Baker Hughes and INTL FCStone Financial Inc. Roach Ag Marketing, Ltd.

10 U.S. production ready to surge?

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13 Monthly Crude Oil OPEC s deal supports crude above $50 but not $70-$80 Source: Futuresource Roach Ag Marketing, Ltd.

14 Source: USDA, EIA Roach Ag Marketing, Ltd.

15 Accelerating U.S. economy equates to a stronger Dollar vs. Ag exporting nations. Weekly Dollar Index Source: Futuresource Roach Ag Marketing, Ltd.

16 U.S. exporters lost a currency advantage over Brazil after the election correcting now Roach Ag Marketing, Ltd.

17 Funds Expect Same Volatility as in Past Years Roach Ag Marketing, Ltd.

18 Contracts Managed Money Corn - Net Position Source: CFTC COT Roach Ag Marketing, Ltd.

19 Source: CFTC COT Roach Ag Marketing, Ltd.

20 Contracts Managed Money Chicago Wheat - Net Position Source: CFTC COT Roach Ag Marketing, Ltd.

21 Contracts Managed Money Soybean Oil - Net Position

22 CORN

23 1992/ / / / / / / / / / / / / / / / / / / / / / / / /17 Million Tons 2.50% Average Annual Growth Rate since World Coarse Grain 6 Billion People Total Use Rate of climb has steepened since 03/04 7 Billion People Source: USDA Roach Ag Marketing, Ltd.

24 Total usage up 49.7 million tons from last year Source: USDA WASDE Roach Ag Marketing, Ltd.

25 1992/ / / / / / / / / / / / / / / / / / / / / / / / /17 Days of Supply Ending Stocks slightly smaller in 17 Ending Stocks USDA Corn Price World Coarse Grains Ending Stocks Days of Supply $9.00 $ $7.00 $6.00 $5.00 $4.00 $3.00 Avg. Farm Price ($/bu) 20.0 $ $1.00 Source: USDA WASDE Roach Ag Marketing, Ltd.

26 Export Inspections Source: USDA, INTL FCStone Financial Inc Roach Ag Marketing, Ltd.

27 Source: INTL FCStone Financial Inc, USDA Roach Ag Marketing, Ltd.

28 Source: INTL FCStone Financial Inc, USDA Roach Ag Marketing, Ltd.

29 CORN OUTLOOK U.S. corn demand at 14.6 Billion largest in history by 6% 2017 swing to bean acres in the U.S. will drive price risk in need for another big yield in southern and northern hemispheres. Livestock feed, ethanol and exports all set to outperform Early 17 prices hinge the performance of Brazil/Argentina crops. Don t get too down on today s prices. Let s look at the past 4 years to see why (Below)

30 SOYBEANS Why are futures rising?

31 1992/ / / / / / / / / / / / / / / / / / / / / / / / /17 Million Tons 4.0% Average Annual Growth Rate for World Soybean Usage Since World Soybeans Total Use 6 Billion People 7 Billion People Source: USDA WASDE Roach Ag Marketing, Ltd.

32 1992/ / / / / / / / / / / / / / / / / / / / / / / / /17 Ending Stocks (Days of Supply) Requires big crops World Soybeans Ending Stocks Days of Supply Ending Stocks USDA Price $18.00 $16.50 $15.00 $13.50 $12.00 $10.50 $9.00 $7.50 $6.00 $4.50 Avg. Farm Price ($/bu) 20.0 $3.00 Source: USDA WASDE Roach Ag Marketing, Ltd.

33 Source: USDA WASDE Roach Ag Marketing, Ltd.

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35 U.S. pork accounts for only 17% of China s total imports January-August 2016, pork exports to China doubled to 12% of total U.S. shipments. The recent rise in Chinese hog and pork prices will stimulate herd recovery and thus production expansion will be initiated in Source USDA FAS

36 China s Swine recovery driving Bean demand Higher priced domestic pork allows herds to grow and justifies increases to bean imports Risk next year -- Chinese govt policy to increase bean acreage

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38 November 2017 Soybean Sales Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

39 SOYBEAN OUTLOOK U.S. soybean demand at historically high levels World livestock herds are rebuilding (China, Australia and U.S.) Growers have risk at stake in several areas for 2017/18. 1) U.S. acre estimates are larger 2) Brazil is off to a very good start 3) Market leading Palm Oil due for a correction 4) China s bean planting? S. American growing season is VERY long. Plan for market volatility as we are seeing today.

40 WEATHER 2 issues

41 Source: Roach Ag Marketing, Ltd.

42 Source: worldagweather.com Roach Ag Marketing, Ltd.

43 Source: worldagweather.com Roach Ag Marketing, Ltd.

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45 How Should U.S. Farmers Market Their Crops in 2017? Roach Ag Marketing, Ltd.

46 Roach Ag Plan $8.00 $7.50 $7.00 $6.50 $6.00 $5.50 Sell New Crop Corn Buy Puts on Balance Buy calls on sold grain in buy signals Sell Balance of Old Crop Repeat New Crop Strategy $5.00 $4.50 Don't Sell Here! Reownership $4.00 Mar Apr May Jun Oct Nov Mar Apr May Jun Oct Nov Past performance is not necessarily indicative of future results

47 Focus the majority of sales in the 1 st half of the year Best Prices Usually Occur in March to July, sometimes August Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

48 Sell when markets are giving us a Roach Ag Sell Signal Roach Ag Marketing, Ltd.

49 Roach Ag Sell & Buy Signals Your Digital Thermometer For Prices Roach Ag Marketing, Ltd.

50 Roach Ag Sell Signals Our We system will direct gives you the to grower the best ! selling opportunities /yr Roach Ag Marketing, Ltd.

51 December 2016 Corn Sales Pre-Harvest Average: $4.05 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

52 December 2015 Corn Sales Pre-Harvest Average: $4.26 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

53 Figure out the percentage of bushels you are comfortable selling each and every spring and tie that % to the your crop insurance policy coverage level / farm profits Roach Ag Marketing, Ltd.

54 Market Plan Farm Name: Phone: Date: Account #: Unpriced grain Old Crop # of sell signals Bushels to sell per sell signal in spring of '17 Approximate bushels to sell per day for 5 days 2016 Corn Beans Wheat Acres Expected Yield 2017 Production New Crop Plan to Forward Price Bushels already sold Bushels to Sell Spring of '17 # of Sell Signals Bushels to Sell Per Sell Signal in Spring of ' Corn Beans Wheat Approximate Bushels To Sell per Day Put Options Unsold Bushels Estimated Number of Sell Signals Put Contracts to buy per Sell Signal Total Contracts 2017 Corn Beans Wheat Notes: Call Options Sold Bushels Estimated Number of Buy Signals Call Contracts to buy per Buy Signal Total Contracts 2017 Corn Beans Wheat Roach Ag Marketing, Ltd.

55 Make sure you have enough on-farm or other owned storage to hold the balance of a crop with room for upside in yields. Roach Ag Marketing, Ltd.

56 Make sure you sell enough in the spring prior to harvest to generate necessary cashflow from harvest through February Roach Ag Marketing, Ltd.

57 Track your local basis looking for trends

58 Legacy Corn basis

59 Legacy Bean basis

60 $4 corn and $10+ returned every year past 4 Corn and soybean rallies from pre-season or mid-season lows 4 year average corn cents cents cents cents 4 year average soybeans 13 $ $ $ $3.09 Average : 79 ¼ cents/bu Average : $2.12 / bu

61 Selling Accuracy 12 of the last 14 years the Dec corn high came during a Roach Ag Sell Signal. 6 of the last 9 years for Nov soybeans Our results improve when: Roach Ag Sell Signals Money Flow Seasonality Cash Price vs. Forecasted Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

62 Highest prices tend to come Mar-Aug during key U.S crop development 7 of 10 years for corn when spec money flow most positive. Seasonality 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

63 Highest soybean prices tend to come Dec-Jan during South American crop development and Mar-Aug during U.S crop development SA Crops US Crop Development 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

64 Target the top-end USDA cash price estimates When: Average farm gate price Is close to or greater than: Top End USDA Price Range = Selling opportunity Corn- $ Beans Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

65 Why Roach Ag? Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

66 In 11 of the last 13 years, the Dec. Corn high came during a Sell Signal. 12/14 on Jan 1 91% of our subscribers renewed in 2015 and In 2015, Dec corn futures fell an average of 25 cents following a Sell Signal that number was.. Customers in 45 states utilizing our system for cash grain sales. Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

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69 Roach Ag Marketing, Ltd. 568 East Yamato Road Suite 200 Boca Raton, FL Roach Ag Marketing, Ltd.

70 Next slides for Research and Q/A

71 1/3 1/10 1/17 1/24 1/31 2/7 2/14 2/21 2/28 3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25 5/2 5/9 5/16 5/23 5/30 6/6 6/13 6/20 6/27 7/4 7/11 7/18 7/25 8/1 8/8 8/15 8/22 8/29 9/5 9/12 9/19 9/26 10/3 10/10 10/17 10/24 10/31 11/7 11/14 11/21 11/28 12/5 12/12 December Corn Seasonality 20-Yr 15-Yr 10-Yr 5-Yr 100% 80% 60% 40% 20% 0% Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

72 1/3 1/10 1/17 1/24 1/31 2/7 2/14 2/21 2/28 3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25 5/2 5/9 5/16 5/23 5/30 6/6 6/13 6/20 6/27 7/4 7/11 7/18 7/25 8/1 8/8 8/15 8/22 8/29 9/5 9/12 9/19 9/26 10/3 10/10 10/17 10/24 10/31 11/7 November Soybeans Seasonality 20-Yr 15-Yr 10-Yr 5-Yr 100% 80% 60% 40% 20% 0% Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

73 Money flow drives the best selling opportunities 8 of 10 years for corn Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

74 Money flow drives the best selling opportunities 8 of 10 years for beans Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

75 December 2015 Corn Sales Pre-Harvest Average: $4.26 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

76 December 2014 Corn Sales Pre-Harvest Average: $4.66 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

77 December 2013 Corn Sales Pre-Harvest Average: $5.84 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

78 December 2012 Corn Sales Pre-Harvest Average: $6.47 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

79 December 2011 Corn Sales Pre-Harvest Average: $6.09 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

80 December 2010 Corn Sales Pre-Harvest Average: $4.14 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

81 December 2009 Corn Sales Pre-Harvest Average: $4.42 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

82 December 2008 Corn Sales Pre-Harvest Average: $5.73 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

83 November 2015 Soybean Sales Pre-Harvest Average: $9.88 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

84 November 2014 Soybean Sales Pre-Harvest Average: $11.75 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

85 November 2013 Soybean Sales Pre-Harvest Average: $12.96 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

86 November 2012 Soybean Sales Pre-Harvest Average: $13.50 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

87 November 2011 Soybean Sales Pre-Harvest Average: $13.25 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

88 November 2010 Soybean Sales Pre-Harvest Average: $9.58 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

89 November 2009 Soybean Sales Pre-Harvest Average: $9.77 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

90 November 2008 Soybean Sales Pre-Harvest Average: $13.07 Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

91 Highest prices tend to come Mar-Aug during key U.S crop development 7 of 10 years for corn when spec money flow most positive. Seasonality 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.

92 Highest soybean prices tend to come Dec-Jan during South American crop development and Mar-Aug during U.S crop development SA Crops US Crop Development 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Source: Futuresource Past performance is not necessarily indicative of future results Roach Ag Marketing, Ltd.