Grain Outlook Dean Cooper INTL FCStone Inc.

Transcription

1 Grain Outlook Dean Cooper INTL FCStone Inc.

2 Disclaimer The trading of derivatives such as futures, options, and swaps may not be suitable for all investors. Derivatives trading involves substantial risk of loss and you should fully understand those risks prior to trading. Past financial results are not necessarily indicative of future performance. All references to futures/options trading are made solely on behalf of FCStone, LLC. All references to swap execution and bi-lateral swaps are made solely on behalf of INTL Hanley, LLC. FCStone, LLC will clear swaps when applicable. Swaps are only available to eligible counterparties. This material should be construed as the solicitation of any trading strategies and/or services provided by FCStone, LLC noted in this presentation. FCStone, LLC 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 FCStone 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 FCStone, LLC. All forecasting statements made within this material represent the opinions of the author, without exception. Factual information believed to reliable, was used to formulate these statements of opinion; and FCStone, LLC cannot guarantee the accuracy and completeness of the information being relied upon. Accordingly, these statements do not necessarily reflect the viewpoints and trading strategies employed by FCStone, LLC. All forecasts of market conditions are inherently subjective and speculative, and actual results and subsequent forecasts may vary significantly from these forecasts. No assurance or guarantee is made that these forecasts will be achieved. Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading.

3 Corporate Overview INTL FCStone is a customer-centric business focused predominantly on mid-market customers. MISSION We seek to provide high-value-added financial solutions to allow our customers to efficiently and effectively utilize the financial markets to control risk and protect margins. We provide customers across the globe with execution and advisory services in commodities, capital markets, currencies, asset management and more. Our mission is founded on the concept of educating our customers in a transparent fashion. AS OF SEPTEMBER MARKET POSITIONING OF INTL FCSTONE SUBSIDIARIES We have one of the leading franchises in grains and metals markets. We are one of the largest traders of agricultural and softs options and structured products designed to mitigate customer risk. We are a recognized leader in global payments and treasury management services. In many verticals, we are recognized as industry experts providing advisory services to industry-leading corporations. FCStone, LLC had $1.9 billion in required customer segregated customer assets, and executed more than 45.8 million exchange-traded contracts in fiscal year INTL FCStone traded more than $68 billion of physical commodities in Record operating revenues and net income for fiscal year Serving more than 20,000 ACCOUNTS in more than 100 COUNTRIES through a network of more than 1,000 PROFESSIONALS across 33 OFFICES around the world. Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading. INTL FCStone Corporate Overview Page 3

4 Global Presence Located in Key Growth Markets U.S. Offices: New York (HQ) Bloomington Bowling Green Chicago Des Moines Indianapolis Kansas City Miami Minneapolis Nashville Omaha Orlando Saint Louis Spirit Lake Topeka International Offices: Asunción Beijing Buenos Aires Campinas Dubai Dublin Goiania London Maringá Montevideo Porto Alegre São Paulo Shanghai Singapore Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading. Sydney Winnipeg 6

5 Wheat United States and World Supply and Demand Information INTL FCStone Inc. Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading.

6 Production down 22% from last year Drought and freeze took its toll Big export program HRW Highlights Very strong basis-- KC 12 s 70 to 80 cents higher than last 5 year average, Gulf also much higher Strong export demand, early feed competition & quality hrw problems world wide Strong spreads See above Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading.

7 Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading.

8 US Supply Demand 2012/13 ALT/13/14 USDA carryout at 181 mb FCStone estimate is 160 mb USDA 72 day supply FCS 62 day supply Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading. FCStone Estimate by Mike O Dea. Source: FCStone Research.

9 Wheat Fundamentals US Wheat Feed/Ind Use (million bushel) Source: USDA HRW M M Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading.

10 Wheat Fundamentals HRW M M FCS estimate 450M HRW M M FCS estimate 455M

11 So far this year approximately 128 m bu. 28% of HRW exports Probably more to come

12 Wheat Fundamentals Argentina Wheat Production (mmt) Source: USDA Domestic use around 6 mmt per yr

13 Wheat Fundamentals Commodity trading involves risks, and you should fully understand those risks prior to trading. FCStone, LLC assumes no liability for the use of any information contained herein. Please refer to Slide 3 for additional information regarding the risk of futures/options trading.

14 Low quality domestic crop has led to import of US SRW

15 Wheat Fundamentals US Wheat Exports (million bushel) Source: USDA USDA projecting exports 118 mb higher than last year Brazil and China imports of US wheat are around 170 mb higher than last year

16 Protein spreads have tightened (and even inverted at times) this year Protein spreads have tightened (and even inverted at times) this year

17 KC Basis KC has Basis been has from been 40 to 70 from cents 40 higher to 70 cents than past higher 5 year than average past 5 year average

18 Gulf HRW Gulf HRW Basis Basis well above average levels levels

19 2000 Wheat Fundamentals US Wheat Carryout (million bushel) Source: USDA

20 SWW -3 % HRW +2%

21 World Wheat (mmt) Source: USDA Wheat Fundamentals World Wheat Production (mmt) World Wheat Total Use (mmt)

22 Carryout is at a 95 day supply

23 35 Wheat Fundamentals Australia Wheat Production (mmt) Source: USDA

24 Wheat Fundamentals 120 FSU-12 Wheat Production (mmt) Source: USDA

25 160 EU-27 Wheat Production (mmt) Source: USDA Wheat Fundamentals

26 40.00 Canada Wheat Production (mmt) Source: USDA Wheat Fundamentals

27 $CD Index

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30 CONCLUSION Demand is improving Ukraine is a new issue the past 3 weeks Canada will be good competition for both export and domestic demand From a world perspective, more and more wheat will be fed (just not in the US) Weather will be the driver in the near term

31 Corn United States and World Supply and Demand Information INTL FCStone Inc.

32 Corn Fundamentals Source: USDA 2/11/2014 U.S. Corn Supply/Demand Source: USDA (Million Bushels) 09/10 10/11 11/12 12/13 13/14 Planted Acres Harvested Acres Yield Carryin Production Imports Total Supply Feed Exports Food/Seed/Ind Total Use Carryout Free Carryout CO/Use Ratio Avg Farm Price

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34 Corn Fundamentals US Planted Corn Acres (million) Source: USDA

35 Corn Fundamentals US Corn Production vs Use (million bushel) Source: USDA US Corn Use Total (million bushel) US Corn Production (million bushel)

36 Corn Fundamentals Ethanol = 43% of last years corn crop Ethanol = 36% of this years corn crop Ethanol usage has hit the blend wall Economics will determine the amount Of production above/below that level

37 Corn Fundamentals

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39 Corn Fundamentals Source: DOE Data.

40 Corn Fundamentals Source: DOE Data.

41 Corn Fundamentals 6500 US Corn Feed Use (million bushel) Source: USDA

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45 2600 US Corn Exports (million bushel) Source: USDA Corn Fundamentals Double last years

46 Corn Fundamentals

47 Corn Fundamentals 5000 US Corn Carryout (million bushel) Source: USDA Also doubled

48 Corn Fundamentals 1000 World Corn (mmt) Source: USDA 900 World Corn Use (mmt) World Corn Production (mmt)

49 Corn Fundamentals Corn World Carryout 61 days Supply

50 16.00 Corn Fundamentals China Corn Imports-Exports (mmt) Source: USDA Imports Exports

51 China Corn Production (mmt) Source: USDA Corn Fundamentals

52 China Corn Use (mmt) Source: USDA Corn Fundamentals

53 China 57% of World Hog Production Source: FCStone Research.

54 Corn Fundamentals DDG s imports into China avoids import tax of 13%. Import tax is what the value is at port (China). Milo meets the same criteria. As comparison soybean and soymeal have a 3% import tax.

55 New Crop Corn Matrix Last two year s corn yield has ranged from to FCStone Estimate by Mike O Dea.

56 CONCLUSION We have gone from a year of extreme shortage to a year of excess. Producers are reluctant sellers Demand is increasing But not as fast as production Export pace picking up--could be mb higher than USDA

57 CONCLUSION Corn acres should decline next year China is still a wild card PED virus could be a big thing Wet on-farm corn will be hitting the market this spring South American execution is improving Weather US South America

58 Soybeans United States and World Supply and Demand Information INTL FCStone Inc.

59 Soybean Fundamentals

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61 80 Soybean Fundamentals US Planted Soybean Acres (million) Source: USDA

62 3500 Soybean Fundamentals US Soybean Production (million bushel) Source: USDA

63 Soybean Fundamentals US Soybean Production vs Use Source: USDA US Soybean Use Total (million bushel) US Soybean Production (million bushel)

64 Soybean Fundamentals 1600 US Soybean Exports (million bushel) Source: USDA

65 Soybean Fundamentals

66 Soybean Fundamentals 700 US Soybean Carryout (million bushel) Source: USDA

67 Soybean Fundamentals 700 US Soybean Carryout (million bushel) Source: USDA

68 Soybean Fundamentals World Soybean Use (mmt) Source: USDA

69 80 Soybean Fundamentals World Soybean Carryout (mmt) Source: USDA

70 Soybean Fundamentals Major Soybean Exporters Production (mmt) Source: USDA USA Brazil Argentina

71 Soybean Fundamentals Chinese Soybean Imports (mmt) Source: USDA

72 Soybean Fundamentals China Soybean Use (mmt) Source: USDA

73 Soybean Fundamentals China Soybean Oil Use (mmt) Source: USDA

74 60 Soybean Fundamentals China Soybean Meal Use (mmt) Source: USDA

75 US feeds approximately 2.5 times as much meal per pig as China Source: USDA Data

76 China 57% of World Hog Production Source: FCStone Research.

77 FCS Forward Look Last year yield 43.3, last 3 years, 41.9, 39.8, & 41.3

78 CONCLUSION Demand remains strong for beans until SA crop comes off Chinese demand is insatiable South America is getting a little better at execution Acres should increase next year PED effect on meal consumption? Weather

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80 Canada has 15 times as many acres as US

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82 Canada produced 18 times as much as US last year!

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85 Soybean futures vs. Canola futures

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87 Thank You! Dean Cooper INTLFCstone