TOOL #5: C&S WASDE PRICE STUDY FOR DECEMBER CORN 7/09/10 For the July 9 th to the August 12 th time frame for CZ 2010

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1 TOOL #5: C&S WASDE PRICE STUDY FOR DECEMBER CORN 7/09/10 For the July 9 th to the August 12 th time frame for CZ 2010 Brief summary: In the month ahead, my best estimate is that CZ 2010 could trade in about a 50-cent range, possibly in the $4.10 to the $3.60 area between now and the next WASDE report on August 12 th The increasing importance of outside market factors, like the value of the US$ Index and Crude Oil prices, along with Non-Ag Money Flows are making price projections that are based on history extremely difficult. Tool 5 is a study of how the CZ Highs and Lows, following each USDA WASDE Report, compare with the average of the WASDE estimated Highs and Lows for Corn, and projects my best estimate of what those Highs and Lows in CZ will be until the next WASDE Report. WASDE stands for World Agriculture Supply and Demand Estimates. The table below shows the U.S. and World Corn Data for this year plus the last 5 previous years for the current month. U.S. World World Corn Ending U.S. World World Corn Ending Corn Ending Stocks Corn WASDE CZ WASDE CZ WASDE CZ Corn Ending Corn Stocks Stocks Million STUR Low Low High High Average Average Stocks STUR Pounds Per Days Of Year Bushels % Price Price Price Price Price Price MMT % Capita Use Jul-05 2, Jul-06 1, Jul-07 1, Jul Jul-09 1, Jul-10 1, ? ? ? The charts on page 2 and 3 show the CZ-WASDE price relationship since The price relationship scale on the right side of the chart corresponds with the left side percentage scale. Notice a % line from left to right. This represents the average of the WASDE estimated High and Low price for this month. This line will assist you in determining, at a glance, what the price will be for whatever percent you think the High and Low percent line will be in the month ahead. HIGHS: Please see the chart on Page 2. Last month's High versus the WASDE average price was 110.3% versus 113.7% the previous month. I expect the CZ High, as a percent of the WASDE average price to be a little lower next month, possibly in the 109% area, or around the $4.10 area. LOWS: Please see the chart on Page 3. Last month's Low versus the WASDE average price was 95.4% versus 101.3% the previous month. I expect the CZ Low as a percent of the WASDE average price to be a little lower next month, possibly in the 93% area, or around the $3.50 area. RANGES: Since FTF started in 1997, the ranges for CZ during the month following the July WASDE report have ranged from between.25 cents in 8 to cents in 0, and have averaged about cents. Please notice the Scatter Analysis on pages 4 and 5 of the Highs and Lows in CZ versus the Opening Prices following the WASDE Report for the current month. Likewise, please notice the Scatter Analysis on pages 6 and 7 of the Highs and Lows in CZ versus the WASDE estimated Highs and Lows for Corn following the WASDE Report for the current month. Also you may want to refer to this month's track record for C&S Tool 5 predictions since 1999 on page 8. BOTTOM LINE: 1. Based on chart patterns, history and mathematical computer projections, the CZ 2010 High between now and the next WASDE report issued on 8/12/10 could be somewhere in the $4.10 area +/- 10 cents. 2. Based on chart patterns, history and mathematical computer projections, the CZ 2010 Low between now and the next WASDE report issued on 8/12/10 could be somewhere in the $3.60 area +/- 10 cents. 1

2 PERCENT THE CZ HIGH AS A PERCENT OF THE WASDE AVERAGE PRICE PRICE EQUALING THIS MONTH'S PERCENT Dec-96 Apr-97 Aug-97 Dec-97 Apr-98 Aug-98 Dec-98 Apr-99 Aug-99 Dec-99 Apr-00 Aug-00 Dec-00 Apr-01 Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 DATE THE CZ HIGH AS A % OF THE WASDE AVERAGE PRICE FOLLOWLING EACH WASDE REPORT THE % LINE THE WASDE AVERAGE PRICE IN JULY 2010 IS $3.75 Carry Planted Harvest % Yield Beginning Total Total Total Over Year Acres Acres Harvested Per Acre Stocks Production Imports Supply Feed FSI Domestic Exports Use Stocks Jul ,115 10, ,910 5,850 2,870 8,720 1,950 10,670 2, Jul ,062 10, ,812 6,050 3,535 9,585 2,150 11,735 1,077 Jul ,137 12, ,992 5, 4,790 10,490 2,000 12,490 1,502 Jul ,598 11, ,328 5, 5,295 10,495 2,000 12, Jul ,770 12, ,075 5, 5,375 10,575 1,950 12,525 1,550 Jul ,478 13, ,733 5,350 6,060 11,410 1,950 13, 1,373 2

3 PERCENT THE CZ LOW AS A PERCENT OF THE WASDE AVERAGE PRICE Dec-96 Apr-97 Aug-97 Dec-97 Apr-98 Aug-98 Dec-98 Apr-99 Aug-99 Dec-99 Apr-00 Aug-00 Dec-00 Apr-01 Aug-01 Dec-01 Apr-02 Aug-02 Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Dec-10 Apr-11 Aug-11 Dec-11 DATE THE CZ LOW AS A PERCENT OF THE WASDE AVERAGE PRICE FOLLOWING EACH WASDE REPORT THE % LINE THE WASDE AVERAGE PRICE IN JULY 2010 IS $ PRICE EQUALING THIS MONTHS PERCENT 3

4 CZ HIGHS CZ HIGHS AFTER THE JULY WASDE REPORT The High Correlation to the post WASDE Open is very high in July at 97.8%. The maximim deviation from the trendline has been from about + 56 cents in 1974 to about - 20 cents in CZ OPENS AFTER THE JULY WASDE REPORT CZ HIGHS AFTER THE JULY WASDE REPORT Linear (CZ HIGHS AFTER THE JULY WASDE REPORT) 4

5 CZ LOWS CZ LOWS AFTER THE JULY WASDE REPORT The Low Correlation to the post WASDE Open is very high in July at 97.2%. The maximim deviation from the trendline has been from about + 30 cents in 1974 to about - 27 cents in CZ OPENS AFTER THE JULY WASDE REPORT CZ LOWS AFTER THE JULY WASDE REPORT Linear (CZ LOWS AFTER THE JULY WASDE REPORT) 5

6 CZ HIGHS CZ HIGHS AFTER THE JULY WASDE REPORT VERSUS THE WASDE HIGHS The High Correlation in July is high at 94.8%, and the maximum deviation from the trendline has been from about +45 cents above in 1988 to about - 65 cents below in 9, which may be too wide to be of much use JULY WASDE CORN HIGHS CZ HIGHS AFTER THE JULY WASDE REPORT Linear (CZ HIGHS AFTER THE JULY WASDE REPORT) 6

7 CZ LOWS C&S GRAIN MARKET CONSULTNG CZ LOWS AFTER THE JULY WASDE REPORT VERSUS THE WASDE LOWS The Low Correlation in July is high at 94.0%, and the maximum deviation from the trendline has been as from about + 60 cents above in 1980 to about - 40 cents below in 1985, which is may be too wide to be of much use JULY WASDE CORN LOWS CZ LOWS AFTER THE JULY WASDE REPORT Linear (CZ LOWS AFTER THE JULY WASDE REPORT) 7

8 C&S Grain Market Consulting T5 Accountability Track Record Since 1998 C&S Grain Market Consulting Record Of Estimated Highs And Lows Versus The Actual Highs And Lows For CZ Between The WASDE Reports CZ CZ CZ CZ CZ CZ CZ CZ CZ Estimated Actual Amount Of Estimated Actual Amount Of Estimated Actual Amount Of Month High High High Miss Low Low Low Miss Range Range Range Miss Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul Jul ??.00?? 50.00?? Average