Overview of the U.S. and Global Markets for Oilseeds and Products

1. Overview of the U.S. and Global Markets for Oilseeds and Products John Baize President John C. Baize and Associates National Cottonseed Products Association 118th Annual Meeting Amelia Island, Florida May 5, 2014

2. U.S. Planted Area of Corn, Soybeans and Cotton2000 – 2012 and USDA Forecast for 2014

3. U.S. Cotton Planted Area2000 – 2013 and Forecast for 2014

4. U.S. Cotton Harvested Area2000 – 2013

5. U.S. Cottonseed Production2000 – 2013

6. U.S. Cottonseed Crush and Direct Use for Feed2000/01 – 2012/13 and USDA Forecast for 2013/14

7. MississippiPlantings of Corn, Soybeans and Cotton2000 – 2012 and USDA Forecast for 2013

8. Cottonseed Production in Louisiana and Mississippi2005 - 2013

9. U.S. Cotton Harvested Area as Percentage of Planted Area2000 - 2013

11. U.S. Mid-South Cottonseed PriceOctober 2006 – April 2014

12. Price of U.S. Soymeal and Cottonseed MealOctober 2011 – March 2014

13. Price of U.S. Crude Soyoil and PBSY Cottonseed OilOctober 2011 – April 2014Lack of cottonseed oil supply has sent price through the roof!

14. Cottonseed Oil Consumption in U.S. and Rest of World2000/01 – 2012/13and USDA Forecast for 2013/14

15. U.S. Consumption of Vegoils for Food and For Industrial Products2000/01 – 2012/13 and Forecast for 2013/14

16. China’s and India’s Cotton Production2000 - 2013

17. China’s and India’ Consumption of Cottonseed Meal2000/01 – 2012/13 and USDA Forecast for 2013/14

18. China’s Preeminent Role in Cotton Industry • China is the world’s largest cotton producer and consumer. • It also is world’s largest cotton importer with a share of 49% in last 2 marketing years. • China is now holding 61% of global cotton stocks. • China can collapse global cotton prices anytime it wants by selling its cotton stocks and/or by stopping cotton imports.

19. Cotton Ending Stocks held by China and Rest of World2001 – 2013 and USDA Forecast for 2014

20. China’s Consumption and Ending Stocks of Cotton2000/01 – 2012/13 and USDA Forecast for 2013/14

21. China’s and India’s Share of Key Global Demand FactorsCurrent Marketing Year

22. Argentina and Brazil Cotton Harvested Area2001 – 2014

23. U.S. Consumption of Cottonseed Meal and Oil2000/01 – 2012/13 and USDA Forecast for 2013/14

24. U.S. Production of Distiller Dried Grain and Solubles2006/07 – 2011/12 and Forecast for 2013/14Little Future Growth Expected Source: Dr. Robert Wisner, Biofuels Economist, Iowa State University

25. U.S. Consumption of Canola Meal2000/01 – 2012/13 and USDA Forecast for 2013/14

26. U.S. Consumption of Palm Oil and Canola Oil2000/01 – 2012/13 and USDA Forecast for 2013/14

27. U.S. Soymeal and Soyoil Consumption1980/81– 2013/14

28. Global Soybean Production and Consumption2000/01 – 2012/13 and Forecast for 2013/14

29. Argentina and Brazil Soybean Harvested Area2001 – 2014

30. Soybean ProductionU.S., Argentina, Brazil and China2000/01 – 2013/14

31. Soybean Imports by China and Rest of World1995/96 – 2012/13 and USDA Forecast for 2013/14No Growth Outside China

32. China’s Enormous Importance to Soybean Sector • China now is importer of 65% of all soybean exports. • It’s soybean imports are almost 50% greater than exports of U.S. and of Brazil. • When China gets a fever, soybean exporting countries get the flu. • In past 3 weeks Chinese companies have defaulted on up to 15 soybean cargoes and other defaults are possible. • Marubeni/Columbia Grain is the main supplier impacted by defaults. • Bunge says it has suffered no defaults. • Each default means losses $8 million or more to exporter. Most defaults will be Brazilian shipments, not U.S. • Import in April of 6.9 MMT, 20% above monthly average. At least 1 MT of Brazilian shipments to the U.S

33. Global Palm Oil Production and Consumption2000/01 – 2012/13 and USDA Forecast for 2013/14Production Up by 141% in 13 Years

34. Global and U.S. Vegoil Stocks to Use Ratio2000/01 – 2012/13 and USDA Forecast for 2013/14

35. Outlook for 2014/15 • U.S. farmers likely to plant less corn and more soybeans than USDA’s prospective plantings report indicates because of late spring and high soybean/corn price ration for the fall. • If El Nino develops as forecasted it is unlikely there will be a late-season drought in Midwest which should mean higher average U.S. soybean yield. The genetic potential today will allow for national average soybean yield that is as high as 47 - 48 bushel/acre. • If that yield is achieved 2014 soybean crop could be as high as 4 billion bushels. If that occurs cash soybean price likely will be $10/bushelor less. That price would slow or reverse South American expansion. • However, El Nino also is likely to reduce palm oil production and Indian soybean production which will be positive for vegoil prices. • Development of El Nino also should result in end of drought in Texas and New Mexico and better cotton yields.

36. Key Factors for The Future • China’s imports of soybeans. USDA forecast is for imports of 112 MMT in 2023/24, China’s forecast is 73.5 MMT. • China’s cotton import and stock policies. • U.S. policies on corn-based ethanol and biodiesel. • Argentina’s export policies – particularly on differential export taxes. • India’s economic growth rate and its consumption of vegoils and soy protein. • Brazil’s investments in transportation and port infrastructure particular in the north • U.S. – China relations.

37. Questions? John C. Baize John C. Baize and Associates 7319 Brad Street Falls Church, VA 22042 Tel: 703-698-5908 Email: jbaize@attglobal.net