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ADM-Benson Quinn

Miller, SD

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The Land of Plenty?A Grain Market Outlook

Kim Rugel, Benson Quinn Commodities, Inc.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial

condition. This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not

guarantee its accuracy or completeness. Any reproduction or retransmission of this report without the express written consent of Benson Quinn Commodities, Inc. is strictly prohibited. The information and comments contained herein is provided by Benson Quinn Commodities, Inc. (“BQCI") and in no way should be construed to be information provided by Archer Daniels

Midland Company. BQCI is a wholly owned subsidiary of Archer Daniels Midland Company and An Introducing Broker for ADMIS

February 26, 2014

Miller, SD

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Grain Markets 2014

Glass

Half Empty?Glass

Half Full?

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Fundamental Price Factors

Grain Markets

Long term US/World supply needs

Basic supply/ demand input Weather

ChinaInvestmentCommunity

World Macro-Economic Conditions

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High Prices are the Cure for High Prices

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“What Goes Up, Must Come Down.”High prices encouraged increased global plantings

World wheat, corn and soybean production was record large

High prices shifted demand to other markets

Brazil was world’s largest exporter of corn last year

New low price environment has attracted demand

World feed demand shifting back to corn from wheat

Demand is not exceeding supplies for first time in 5 years

Bearish supply environment has shifted investment funds

away from commodities or to shorting the market

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Supply Bull to Supply Bear Market

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Supply Bull to Supply Bear Market

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Shifting World Export Markets

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World Corn Demand Rebounding

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World Wheat Trade Recovers

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The Money Left the Marketplace

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The Money Left the Marketplace

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Improving Export Outlook: Corn

China rejecting MIR 162 and cancelling US sales

Unshipped sales to China: 1.5 MMT or 60 mil bus.

South Korea and Japan taking rejected cargoes

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Improving Export Outlook: Wheat

China bought SRW early in season

Brazil bought HRW in fall due to Argentine issues

US demand picking up due to Canada logistic issues

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Similar Dynamics in the Beans

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Rebounding US Production

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Global Supply Exceeds Demand

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Yet, China Demand Grows 15.3%

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Demand for US Beans not Slacking

Exports at 105% of forecast +78 mil; shipments at 84%

China cancellation expected 2-3 MMT or 73.5-110 mil bus.

China unshipped sales: 4.03 MMT or 148 mil bus.

Unknown destination unshipped sales: 1.52 MMT or 55.8

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The Money Has Skin in the Game

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US Stocks Remain Tight vs. Global

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2014 – Record Production?

USDA Outlook Forum: First look at 2014 S&Ds

Starts with assumption US weather will be normal

Production forecasts based on trendline yields

Early acreage estimates based on economics

US balance sheet seen expanding

Are we moving into new marketing environment?Protecting cost of production vs. maximizing profits

Have a Marketing Plan:To sell old crop, new crop and 2015 crop

ASP contract, Minimum Price, Floor Price, Min/Max Contract

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US Snow Cover

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US Drought Monitor

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US Short Term Temp Outlook

Mar 2-6 Mar 4-10

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Spring Outlook MAM/NOAA

TEMPS PRECIP

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Spring Drought Outlook/Noaa

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Summer Outlook JJA/NOAA

TEMPS PRECIP

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US Planted Acreage Outlook14/15 253.8 down 1.6 mil

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USDA Supply/DemandUSDA

OutlookFeb

USDA

Feb 13 USDA

Baseline

Feb 2014 USDA

BaselineUSDA

OutlookInforma

2/14

Feb 14 USDA

Baseline

Feb 14 USDA

BaselineUS Corn 07/08 08/09 09/10 13/14 13/14 14/15 14/15 14/15 14/15 15/16 16/17Planted Acres 93.5 86 86.4 96.5 95.4 90.0 93.5 92.0 93.3 91.0 89.0Harvested Acres 86.5 78.6 79.5 88.8 87.7 82.3 86.1 84.6 85.8 83.6 81.6Yield 150.7 153.9 164.7 163.6 158.8 164.7 165.6 165.3 163.0 167.6 169.6

Beginning Stocks 1,304 1,624 1,673 632 821 2,177 1,887 1,481 1,481 2,607 2,877Production 13,038 12,092 13,092 14,530 13,925 13,548 14,260 13,985 13,985 14,010 13,840Imports 20 14 8 25 35 25 25 25 10 25 25 Total Supply 14,362 13,729 14,774 15,187 14,781 15,750 16,172 15,491 15,477 16,642 16,742

Feed & Residual 5,858 5,182 5,125 5,400 5,300 5,300 5,500 5,400 5,325 5,550 5,575Food, Seed & Industry 4,442 5,025 5,961 6,110 6,400 6,270 6,365 6,430 6,350 6,415 6,460 Ethanol for Fuel 3,049 3,709 4,591 4,675 5,000 4,825 4,900 5,000 4,900 4,925 4,950 Total Domestic Usage 10,300 10,207 11,086 11,510 11,700 11,570 11,865 11,830 11,675 11,965 12,035Exports 2,437 1,849 1,980 1,500 1,600 1,900 1,700 1,550 1,850 1,800 1,900 Total Usage 12,737 12,056 13,066 13,010 13,300 13,470 13,565 13,380 13,525 13,765 13,935

Ending Stocks 1,624 1,673 1,708 2,177 1,481 2,280 2,607 2,111 1,952 2,877 2,807Stocks/Use Ratio 12.8% 13.9% 13.1% 16.7% 11.1% 16.9% 19.2% 15.8% 14.4% 20.9% 20.1%Farm Price $4.20 $4.06 $3.55 $4.80 $4.50 $4.10 $3.65 $3.90 $3.85 $3.30 $3.35

US Corn Supply and Demand

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Corn Stocks Grow Exponentially

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USDA Supply/Demand USDA USDAFeb

USDAOutlook

USDAFeb

USDA

Feb 13 USDA

Baseline

Feb 14 USDA

BaselineOutlook

USDAInforma

2/14

Feb 14 USDA

Baseline

Feb 14 USDA

BaselineUS Soybeans 10/11 11/12 12/13 13/14 13/14 14/15 14/15 14/15 14/15 15/16 16/17Planted Acres 77.4 75 77.2 77.5 76.5 74 78 79.5 81.3 77.8 77.5Harvested Acres 76.6 73.8 76.2 76.6 75.9 73.1 77.0 78.5 80.3 76.7 76.5Yield 43.5 41.9 39.8 44.5 43.3 44.9 45.2 45.2 44.5 45.6 46.1

Beginning Stocks 151 215 169 125 141 250 170 150 140 204 232Production 3,329 3,094 3,034 3,405 3,289 3,283 3,480 3,550 3,572 3,500 3,527Imports 14 16 36 15 30 15 15 15 20 15 15 Total Supply 3,495 3,325 3,239 3,545 3,459 3,548 3,665 3,715 3,732 3,718 3,774

Crush 1,648 1,703 1,689 1,660 1,700 1,665 1,705 1,725 1,700 1,720 1,735Exports 1,501 1,362 1,320 1,500 1,510 1,480 1,640 1,600 1,600 1,650 1,675Seed 87 90 89 87 87 85 116 89 102 116 117Residual 43 1 1 48 12 52 16 40 Total Usage 3,280 3,155 3,098 3,295 3,309 3,282 3,461 3,430 3,442 3,486 3,527

Ending Stocks 215 169 141 250 150 266 204 285 290 232 247Stocks/Use Ratio 6.6% 5.4% 4.6% 7.6% 4.5% 8.1% 5.9% 8.3% 8.4% 6.7% 7.0%Farm Price $11.30 $12.50 $14.40 $10.50 $12.70 $10.35 $9.75 $9.65 $8.65 $8.85 $8.90

US Bean Supply and Demand

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Bean Stocks to Nearly Double

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USDA Supply/Demand USDA USDAFeb

USDAOutlook

USDAFeb

USDA

Feb 13 USDA

Baseline

Feb 14 USDA

BaselineOutlook

USDAInforma

2/14

Feb 14 USDA

Baseline

Feb 14 USDA

BaselineUS Soybeans 10/11 11/12 12/13 13/14 13/14 14/15 14/15 14/15 14/15 15/16 16/17Planted Acres 53.6 54.4 55.7 56 56.2 54 57 55.5 55.8 56 54Harvested Acres 47.6 45.7 48.9 46.5 45.2 46.2 48.5 47.2 48.4 47.7 46.0Yield 46.3 43.7 46.3 45.2 47.2 45.6 45.8 45.8 46.3 46.2 46.6

Beginning Stocks 976 862 743 691 718 733 565 558 594 642 745Production 2,207 1,999 2,266 2,100 2,130 2,105 2,220 2,160 2,239 2,205 2,145Imports 97 112 123 130 170 125 140 150 140 150 160 Total Supply 3,279 2,974 3,131 2,921 3,018 2,963 2,925 2,868 2,973 2,997 3,050

Food, Seed & Industry 997 1,017 1,018 1,032 1,034 1,034 1,033 1,041 1,022 1,037 1,041Feed & Residual 132 162 388 300 250 200 225 190 170 190 190 Total Domestic Usage 1,128 1,180 1,406 1,332 1,284 1,234 1,258 1,231 1,192 1,227 1,231Exports 1,289 1,051 1,007 950 1,175 925 1,025 1,050 1,050 1,025 1,025 Total Usage 2,417 2,231 2,414 2,282 2,459 2,159 2,283 2,281 2,242 2,252 2,256

Ending Stocks 862 743 718 639 558 804 642 587 731 745 794Stocks/Use Ratio 35.7% 33.3% 29.7% 28.0% 22.7% 37.2% 28.1% 25.7% 32.6% 33.1% 35.2%Farm Price $5.70 $7.24 $7.77 $7.00 $6.80 $5.40 $4.90 $5.30 $6.00 $4.35 $4.30

US Wheat Supply and Demand

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Wheat Stocks Steady Growth

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Marketing Tools

Hedge to Arrive – futures only, if bullish basis

Basis – basis only, if bullish futures

Open Offer – target price marketing

Average Seasonal Price – Spring pricing window

Minimum Price Contract – attach call, use if bullish

Floor Contract – attach put, use if bearish

Min/Max Contract – attach options sets floor and ceiling

ADM Marketing Partners Advisory recommendations

ADM Advantage

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Corn Cost of Production 14/15Miller, SD Insurance CZ14 CZ14 CZ14 Break Even CZ15 CZ15 Break EvenFutures 2/25/14 $4.61 $4.62 $5.59 $4.68 $5.65Basis $0.00 -$0.69 -$0.69 -$0.75 -$0.75Net 7-yr Ave $4.61 $3.93 $4.90 $3.93 $4.90Gross Revenue 112 $515.76 $440.16 $548.80 $440.16 $548.80

Fert/Seed/Chem Costs $237.50 $237.50 $237.50 $237.50 $237.50Planting/Harvest Costs $109.00 $109.00 $109.00 $109.00 $109.00Storage Costs $0.00 $0.00 $0.00 $0.00 $0.00Crop Insurance 75% coverage $15.00 $15.00 $15.00 $15.00 $15.00Operating Interest $15.00 $15.00 $15.00 $15.00 $15.00Trucking Costs $32.00 $32.00 $32.00 $32.00 $32.00Irrigation $0.00 $0.00 $0.00 $0.00 $0.00Total Input Costs $408.50 $408.50 $408.50 $408.50 $408.50Gross Profit Per Acre $107.26 $31.66 $140.30 $31.66 $140.30Land Rent $140.00 $140.00 $140.00 $140.00 $140.00Net Profit Per Acre -$32.74 -$108.34 $0.30 -$108.34 $0.30

Machinary Depreciation $45.00 $45.00 $45.00 $45.00 $45.00Overhead/Labor Costs $62.50 $62.50 $62.50 $62.50 $62.50Net Profit Per Acre -$140.24 -$215.84 -$107.20 -$215.84 -$107.20

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December Corn Chart

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Bean Cost of Production 14/15Miller, SD Insurance SX14 SX14 Break Even SX14 SX15 Break Even SX15Futures 2/25/14 $11.31 $11.62 $11.16 $11.16 $11.23Basis $0.00 -$0.81 -$0.81 -$0.88 -$0.88Net 7-yr ave $11.31 $10.81 $10.35 $10.28 $10.35Gross Revenue 34.5 $390.11 $372.95 $357.08 $354.66 $357.08

Fert/Seed/Chem Net Costs $128.00 $128.00 $128.00 $128.00 $128.00Planting/Harvest Costs $55.00 $55.00 $55.00 $55.00 $55.00Storage Costs $0.00 $0.00 $0.00 $0.00 $0.00Crop Insurance 75% coverage $12.00 $12.00 $12.00 $12.00 $12.00Operating Interest $12.00 $12.00 $12.00 $12.00 $12.00Trucking Costs $10.00 $10.00 $10.00 $10.00 $10.00Irrigation $0.00 $0.00 $0.00 $0.00 $0.00Total Input Costs $217.00 $217.00 $217.00 $217.00 $217.00Gross Profit Per Acre $173.11 $155.95 $140.08 $137.66 $140.08Land Rent $140.00 $140.00 $140.00 $140.00 $140.00Net Profit Per Acre $33.11 $15.94 $0.07 -$2.34 $0.07

Machinary Depreciation $45.00 $45.00 $45.00 $45.00 $45.00Overhead/Labor Costs $62.50 $62.50 $62.50 $62.50 $62.50Net Profit Per Acre -$74.39 -$91.56 -$107.43 -$109.84 -$107.43

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November Soybean Chart

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Best Return Current Market14/15Miller, SD SX14 CZ14 MWU14Futures 2/25/14 $11.62 $4.62 $6.70Basis -$0.81 -$0.69 -$0.70Net $10.81 $3.93 $6.00Gross Revenue $372.95 $440.16 $240.00

Fert/Seed/Chem Net Costs $128.00 $237.50 $171.00Planting/Harvest Costs $55.00 $109.00 $60.00Storage Costs $0.00 $0.00 $0.00Crop Insurance 75% coverage $12.00 $15.00 $18.00Operating Interest $12.00 $15.00 $15.00Trucking Costs $10.00 $32.00 $12.00Irrigation $0.00 $0.00 $0.00Total Input Costs $217.00 $408.50 $276.00Gross Profit Per Acre $155.95 $31.66 -$36.00Land Rent $140.00 $140.00 $140.00Net Profit Per Acre $15.94 -$108.34 -$176.00

Machinary Depreciation $45.00 $45.00 $45.00Overhead/Labor Costs $62.50 $62.50 $62.50Net Profit Per Acre -$91.56 -$215.84 -$283.50

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US Acreage Mix: Corn vs. Beans

US Weather

China/World Weather

Money Flow

US Economy/Inflation?

Black Swan?

What Could Change Price Outlook

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Corn to Bean Price Ratio

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Summer Outlook/World Weather

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Global Weather Hot Spots

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World Corn Ending Stocks

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World Wheat Ending Stocks

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Money Flow Out of Commodities

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Equity Bubble?

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World Unrest/Black Swan?

Attributed: Reuters/Khaled Abdullah

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Kim RugelBenson Quinn Commodities, Inc.

Minneapolis, MN800-438-7070

kim.rugel@adm.comADM-Benson QuinnHitchcock, SDJeff Gottman and Kallie Craig605-266-2530

Sources:USDACFTC Commitment of Traders reportsWorld Weather Spring OutlookNOAANASS Census County Yield dataCharts from The Hightower Report and DTNCost of Production analysis estimated on regional data