2014 OUTLOOK

Ray Grabanski

Progressive Ag

Fargo, ND

Trading futures and options involves risk. Past performance is not indicative of future results.

North Dakota Marketing Year Average Price

YearSpring Wheat Soyeans Corn

1971-2006 1.30 - 4.71 2.87 - 7.37 1.00 - 3.16

2007 7.45 9.63 4.06

2008 7.19 9.71 3.74

2009 4.90 9.26 3.18

2010 6.78 10.90 5.01

2011 8.17 11.90 5.81

2012 8.19 14.00 6.46

2013 – IN REVIEW

Jan-13 Dec-13 Change

Chi Wht H 7.7800 6.0500 -22.2%

Chi Wht N 7.9400 6.1700 -22.3%

KC Wht H 8.3100 6.4000 -23.0%

KC Wht N 8.2700 6.4300 -22.2%

Mpls Wht H 8.6500 6.3500 -26.6%

Mpls Wht U 8.9500 6.6600 -25.6%

2013 – IN REVIEWJan-13 Dec-13 Change

Corn H 6.9800 4.2200 -39.5%

Corn Z 5.8600 4.5000 -23.2%

Soybean H 14.1900 13.1200 -7.5%

Soybean X 13.0300 11.3500 -12.9%

Soybean Oil

H 49.16 38.82 -21.0%

Soybean Meal H 420.60 437.70 4.1%

2013 – IN REVIEW

Jan-13 Dec-13 Change

Live Cattle G 129.900 134.500 3.5%

Feeder Cattle F 151.400 166.700 10.1%

Lean Hog G 85.720 85.420 -0.3%

2013 – IN REVIEW

Jan-13 Dec-13 Change

GOLD G 1677.10 1201.90 -28.3%

Silver H 30.38 19.34 -36.3%

Copper G 3.64 3.44 -5.5%

Platinum F 1538.70 1371.10 -10.9%

Palladium H 717.40 702.65 -2.1%

2013 – IN REVIEW

Jan-13 Dec-13 Change

Crude Oil G 91.79 98.42 7.2%

RBOB G 2.81 2.79 -0.9%

Heating Oil G 3.05 3.08 1.1%

Ethanol G 2.19 1.91 -12.7%

Natural Gas G 3.37 4.23 25.6%

2013 – IN REVIEW

Jan-13 Dec-13 Change

Dow Jones H 13070.00 16494.00 26.2%

S&P 500 H 1422.50 1841.10 29.4%

Nasdaq H 2652.00 3584.00 35.1%

Dollar 79.88 80.32 0.6%

CRB Index 313.37 277.68 -11.4%

Stocks Breakout to New Highs

10 year Monthly DJIA

CORN

Corn’s IssuesBigger than expected crop (158.8 bu)

Demand

Exports started poor/cancellation/improving

Ethanol pace slowing

EPA changing RFS

1.6 Million less Soft Red Acres

Corn Exports To Date

Sales Shipments USDA

2012 .538 0.312 .731

2013 1.32

60.0/week1.8/3.12 BB

0.574

26.1/week783/1.357

1.6

22 weeks into corn’s marketing year, 30 weeks to goSales need to average 9.3/Shipments 34.2

Corn Category   09/10   10/11   11/12   12/13   13/14   14/15Supply                 Beginning Stocks 1,673 1,708 1,128 989 821 1,481 Production 13,092 12,447 12,360 10,780 13,925 13,871 Imports 8 28 29 162 35 15 Total Supply 14,774 14,182 13,517 11,932 14,781 15,367Use Food, Seed, Ind. 1,370 1,407 1,428 1,396 1,400 1,425 Ethanol 4,591 5,019 5,000 4,648 5,000 4,600 Feed and Residual 5,125 4,795 4,557 4,335 5,300 5,000 Exports 1,980 1,834 1,543 731 1,600 1,750 Total Use 13,066 13,055 12,528 11,111 13,300 12,775 Ending Stocks 1,708 1,128 989 821 1,481 2,592

Stocks/Use Ratio 13.1 8.6 7.9 7.4 11.1 20.35 Year Average 11.2 Planted Acres 86.4 88.2 91.9 97.2 95.4 92.5Harvested Acres 79.5 81.4 84.0 87.4 87.7 85.1Yield Per Acre (Bu.) 164.7 152.8 147.2 123.4 158.8 163.0

Average Price 3.55 5.18 6.22 6.89 4.50 3.35

USDA 2014 L-R Projections

93.5 million acres, 86.1 hvstd. 165.6 bu/acre yield 14.26 billion bu crop Ethanol 4.9 billion bu. 2.6 billion carryout ($3.65) But reduce 400 mb since Nov. (2.2 B)

USDA 10 yr. projections

2014-2018: $3.30-$3.65 2019-2024: $3.75-$4.20

B/E now is $4.14 Target Price is now $3.70

Monthly corn: Consolidation?

Weekly Chart: Bottoming???

Mar 14 Corn: $4.45 sell July

Dec 14 Corn: $4.65/$5.35?

SAM Weather

SOYBEAN

Soybean IssuesSouth America:

Brazil: huge acres, 5 to 8% increase,

early harvest good, getting hot south

Argentina: hot dry conditions/improving

US demand impressively strong

Crush demand very strong

meal demand main reason

Exports very strong but China has huge

Soybean Exports To Date

Sales Shipments USDA

2012 1.25 1.01 1.32

2013 1.58

71.8/week2.15/3.73 BB

1.16

52.7/week1.58/2.74 BB

1.51

22 weeks into corn’s marketing year, 30 weeks to goSales are over expectations/Shipments need 11.7

Soybean Export Destinations

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.00

2.50

5.00

7.50

10.00

12.50

15.00

17.50

20.00

22.50

25.00

China

Mexico

Japan

Taiwan

Indonesia

Netherlands

Soybeans Category 09/10   10/11   11/12   12/13   13/14   14/15  Supply Beginning Stocks 138 151 215 169 141 150 Production 3,359 3,329 3,094 3,034 3,289 3,484 Imports 15 14 16 36 30 15 Total Supply 3,512 3,495 3,325 3,239 3,459 3,649Use Crush 1,752 1,648 1,703 1,689 1,700 1,750 Exports 1,499 1,501 1,365 1,320 1,510 1,550 Seed and Feed 90 87 90 89 87 90 Residual 20 43 -2 1 12 25 Total Use 3,361 3,280 3,155 3,099 3,309 3,415

Ending Stocks 151 215 169 141 150 234

Stocks/Use Ratio 4.5 6.6 5.4 4.5 4.5 6.95 Year Average 5.2

Planted Acres 77.5 77.4 75.0 77.2 76.5 79.5Harvested Acres 76.4 76.6 73.8 76.2 75.9 78.3Yield Per Acre (Bu.) 44.0 43.5 41.9 39.8 43.3 44.5

Average Price 9.59 11.30 12.50 14.40 12.70 10.35

USDA Baseline 2014 no’s

78 million acres 45.2 bu/acre yield 3.480 billion bu crop

203 million bu carryout ($9.75)• But reduced 20 mb after Nov. (183)

USDA 10 yr. projections

2014-2021: $8.85 to $9.75 2022-2024: $9.95 - $10.15

Target price is $8.40

Soybean Monthly: Downside Risk?

Weekly: Consolidation???

Mar 14 Sbns: inverted, sell

Nov 14 Sbns: $11.65/$12.35

7 Yr. 6 Yr. 5 Yr. 4 Yr. 3 Yr. 2 Yr. 2012600

700

800

900

1000

1100

1200

Corn Revenue Rankings

Progressive Ag

AgResources

Agrivisor

Agrivisor

Brock

Stewart-Peterson

Utterback

DoaneRev

enu

e $/

Acr

e

7 Yr. 6 Yr. 5 Yr. 4 Yr. 3 Yr. 2 Yr. 2012400

450

500

550

600

650

700

Soy Revenue Rankings

Progressive Ag

AgResources

Agrivisor

Brock

Stewart-Peterson

Top Farmer

Utterback

Doane

Year of Rankings

$ Revenue Per Acre

Check Out Our Website

www.progressiveag.com

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WHEAT

Wheat’s Issues - USUS Winter Wheat going into dormancy at

very good condition

Exports started strong,

slowing due to strong dollar

Winter Wheat crop high quality

Spring Wheat average quality, discounts

Oct/Nov/Dec Crop Production Report BEARISH, not expected

Wheat’s Issues - USUS Winter Wheat Crop Condition Rating

KS: 63% G/E 58% 35%

OK: 77% G/E 63% 36%

TX: 32% G/E 38/35/37% 19%

CO: 55% G/E

18 States: 62% G/E

Last Year: 33% G/E

Winter Wheat Acres Down

State 2007 2008 2009 2010 2011 2012 2013 2014KS 10.40 9.60 9.30 8.60 8.80 9.40 9.50 8.80 -7%TX 6.20 5.80 6.40 5.40 5.30 5.70 6.20 6.20 0%OK 5.90 5.60 5.70 5.20 5.10 5.40 5.60 5.30 -5%

MT 2.24 2.60 2.55 2.00 2.25 2.30 2.00 2.50 25%CO 2.50 2.15 2.60 2.40 2.30 2.35 2.30 2.90 26%IL 1.00 1.20 0.85 0.35 0.80 0.66 0.88 0.74 -15%IN 0.42 0.58 0.47 0.30 0.43 0.35 0.47 0.43 -9%NE 2.05 1.75 1.70 1.50 1.52 1.38 1.47 1.50 2%OH 0.82 1.12 1.01 0.80 0.88 0.50 0.69 0.63 -9%

Total 45.01 46.31 43.31 37.10 40.65 41.20 43.10 41.90 -3%

WW Acres

2007 2008 2009 2010 2011 2012 2013 20140.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

9.00

9.50

10.00

10.50

Kansas

Texas

Oklahoma

Montana

Colorado

Illinois

Indiana

Nebraska

Ohio

Wheat Exports To Date

Sales Shipments USDA

2012 0.772 0.599 1.007

2013 0.981

28.0/week476 MB/1.46

0.811

23.2/week394 MB/1.21

1.175

35 weeks into marketing year, 17 weeks to goSales need average 11.4/Shipments 21.4

Wheat Category   09/10   10/11   11/12   12/13   13/14   14/15  Supply Beginning Stocks 657 976 862 743 718 558 Production 2,218 2,207 1,999 2,266 2,130 2,366 Imports 119 97 112 123 170 120 Total Supply 2,993 3,279 2,974 3,131 3,018 3,044Use Food 919 926 941 945 960 950 Seed 69 71 76 73 74 75 Feed and Residual 150 132 162 388 250 275 Exports 879 1,289 1,051 1,007 1,175 1,200 Total Use 2,018 2,417 2,231 2,414 2,459 2,500Ending Stocks Total Ending Stocks 976 862 743 718 558 544

Stocks/Use Ratio 48.4 35.7 33.3 29.7 22.7 21.810 Year Average 28.5 Planted Acres 59.2 53.6 54.4 55.7 56.2 57.5Harvested Acres 49.9 47.6 45.7 48.9 45.2 52.0Yield Per Acre (Bu.) 44.5 46.3 43.7 46.3 47.2 45.5

Average Price 4.87 5.70 7.24 7.77 6.80 6.50

2014 USDA Baseline no’s

57 million acres, 48.5 hvstd. 45.8 bu/acre 2.220 billion bu production

642 million bu carryout ($4.90)• Only 7 mb reduction since Nov. (635)

USDA 10 yr. projections

2014-2020: $4.30 - $4.90 2021-2024: $4.90-$5.35

Target Price is $5.50 in new farm bill

Mar Mpls: $6.95/$7.35 sell

Sept 14 Mpls: $7.00/$7.35