Globoil 29 September 2015 Jonathan Grange

Globoil 29 September 2015

www.vicorus.ch Jonathan Grange

An innovative international brokerage business specializing in physical agricultural commodities with offices in Montreux, Madrid, Istanbul, Hamburg, Georgetown, Mumbai

Product origination: Black Sea (Russia, Ukraine, Romania, Hungary, Bulgaria, EU)

Destination: consumer business in the Mediterranean to Turkey, through the Middle East to North Africa, Spain, Italy and Greece & SE Asia

A diverse client base including farmers, originators, trading houses, importers, processors and consumers.

CerealsWheat, Corn, Barley, Rye, Millet

OilseedsSoybeans, Sunflower seeds, Rapeseeds, Linseeds

FeedstuffsSunflower meal, Rape meal, Wheat Bran, Rice bran, Sugar Beet Pulp, Soybean meal

PulsesYellow peas, Feed peas, Chick Peas

Vegetable oilsSunflower oil, Rape oil, Soya oil

www.vicorus.ch Jonathan Grange 25 Sep 2015

Global Agri Outlook

Agenda

Macro economic factors

Supply

Logistics

Demand

Technology

Conclusion

Macro economic factors

Geo Politics

Interest rates

Energy Prices

Fund activity

Geo Politics

China – slowdown / S China sea

India - next motor

Industrial Commodity producers - price hit

Russia – punching above weight

M East – non functioning states, except Iran

Interest Rates

Global growth• China – hard landing / transformation• US – energy dividend• India - future motor• EU – deflation risk like Japan, immigrants?

Fed Policy• Employment measure

Inflation / deflation

Ag industry risk

35 years Interest Rates – US T Bond (10y)

Mega Trend

Producer / Consumer effect

US$ / CRB

US$ Index – 40 years

Mega Trend

US$ / CRB

US$ / Brazil Real

www.vicorus.ch Jonathan Grange 18 June 2015

Mega Trend

US$ / CRB

US$ Index / CRB

www.vicorus.ch Jonathan Grange 18 June 2015

Energy Prices

Changing world flows

Fracking – US exports

OPEC - Saudi

Efficiency / alternatives

WTI Crude Monthly

US Natural Gas

Fund Activity

Mass of money – US$ 350 bln

Asset class

Macro driven - CTA

Market volatility

Fund Activity

Fund Returns

Supply

Weather

Crops - Area / Growing conditions

Farmer selling

Origin competition

Supply – Weather

N Hemisphere

El Nino• Forecast• So Far• Possibilities

Weather – El Nino

Supply

Crops - Area / Growing conditions Profitability Switching

Devaluation Logistics, Rent, Labour, Admin

Oil price• Fuel, fertilizer,

Matif Wheat Monthly

Soybean / Corn Chicago Monthly (2nd month)

Supply

Farmer selling• Farm is ‘rich’• Local currency values• Technology moving fast

Origin competition• Multi origins with good availabilities

Logistics

Freight rates

US Transport & Elevation capacity - full

Black Sea • Floating Elevators • Domestic transport

S. America - Strikes / Elevation Capacity

Baltic Tanker Clean Index Monthly

Demand

Calorific intake

Biofuels

Consumer behaviour / Pipeline effect

World Grain Demand

98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16500

GLOBAL CORN & WHEAT USE

Wheat Corn

Global Corn Use Growth: 22.48 mln mt/pa. Average 18-Y growth: 3.9%

Global Wheat Use Growth: 7.66 mln mt/pa. Average 18-Y growth: 1.3%

US Biofuels

Technology

EU / China / Turkey GMO acceptance – France

Euro Fracking

China / Turkey Testing

Quality management – complexity• Sustainability• Traceability

Conclusion

‘Normal’ weather except El Nino

Consistent crops

‘Normal’ Demand - slowing

Growing stocks - Stocks Use ratios• Govt stocks vs Just in time

Role of the market

Price outlookwww.vicorus.ch Jonathan Grange 25 Sep 2015

Global Stocks – Wheat, Corn, Soybeans (mln mt)

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/160

Wheat Corn Soybeans

Stocks / Use Ratios – Global Wheat & Corn (%)

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/1612

Wheat Corn

Stocks / Use Ratios – Global Soybean & Palm (%)

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/165

Soybeans Palm Oil

CBOT Corn Monthly

CBOT Wheat Monthly

CBOT Soybeans Monthly

Crude Palm oil - Monthly

Thank you for your attention

Globoil 29 September 2015 Jonathan Grange

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