With an uneventful planting season thus far and little fresh demand news for grains or livestock, one of the biggest events this month has been the rapid and alarming spread of avian influenza at turkey farms and chicken facilities, mostly in the Upper Midwest. Say “bird flu” and you are going to catch the attention of cable news and newspapers, and the ag markets can’t help but notice too.

The outbreak has without a doubt been a hardship for the individual farms affected, and a challenge for the poultry industry as a whole. As for the broader impact on agriculture, that remains to be seen. At this point, it does not seem to be a “Black Swan” type of market-changing event.

GETTING UP TO SPEED The highly pathogenic avian influenza

virus, is much like the regular flu, with the potential to cause respiratory distress, loss of appetite and diarrhea. The latest outbreak started on the West Coast in December in backyard flocks. A separate strain, H5N2, was first found in January in Washington

state, and has since been spreading across the Mississippi flyway (see chart below).

Researchers believe it has been spread by ducks and geese flying north for the winter. While most of the cases have been found in the Mississippi flyway, USDA’s chief veterinarian said ultimately it is likely to be found in all four major U.S. flyways, including the Atlantic flyway, which includes significant poultry producing areas.

H5N2 can virtually wipe out an entire flock within a couple days, and those birds that show no symptoms nonetheless have to be culled. Losses can and have mounted quickly. As the chart below shows, the virus has affected 3.2 million turkeys, mostly in Minnesota, and 4.1 million egg-laying chickens, mostly in Iowa.

The damage is most immediately a problem for poultry companies. The one hit hardest at this point is Hormel. More than half of the Minnesota farms affected by the flu are suppliers to Hormel’s Jennie-O turkey division. A Wisconsin farm is also a supplier. The company has warned that

April 24, 2015

BLACK SWAN OR CHICKEN LITTLE?

“The first farmer was the first man. All historic nobility rests on the possession and use of land.”

–Ralph Waldo Emerson

DEC

ISIO

NS,

DEC

ISIO

NS

The grains trade is focused squarely on U.S. weather right now, and it is becoming increasingly likely that the Corn Belt will see a smooth planting season. Although corn planting got off to a slow start and remained sluggish this week, it is not very far behind.

More importantly, conditions in the Midwest are expected to be warmer and drier in the week ahead, and beyond that the National Weather Service outlook for the 6-to-10 and 8-to 14-day periods indicates below average precipitation and seasonable temperatures across the entire Midwest. We are getting to the ideal time of the year to plant corn in the

heart of the Corn Belt, and the weather outlook could not be better.

In that environment, it will be tough for the grains complex to rally in the near-term, and that realization may have driven some of the weakness this week.

The crop outlook for wheat is also mostly favorable, as most of hard red winter wheat country has seen ample rain recently. If there is a concern it is about continued dryness in the Northern Plains.

States with Confirmed Avian Influenza

Flock size (1,000s)

Avian Influenza in Commercial Flocks

Pacific

CentralMississippi

Atlantic

TurkeyChickens, layers

TurkeyChickens,l

ayersCalifornia 134 113

Iowa 27 3,800

Wisconsin 127 200

Arkansas 40

Minnesota 2,555

Missouri 29

S. Dakota 286

N. Dakota 40

Total: 3,238 4,113

Avian Influenza in Commercial Flocks

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the flu will disrupt its sales and weigh on its earnings.

BACKED UP POULTRY COULD HIT PORK, BEEF

More than 7 million dead birds sounds like a lot, but the 3.2 million turkeys represents only 1.3% of total annual slaughter, or 5.4% of quarterly slaughter. The 4.1 million laying hens is roughly 1.1% of the U.S. flock. Importantly, none of the outbreaks thus far have been in broiler chicken flocks, whose numbers dwarf turkeys and egg layers.

So why is this outbreak even worth discussing? Look to poultry exports. China and South Korea both responded quickly to the outbreak with a blanket ban on all imports of U.S. poultry. Mexico has enacted a ban on poultry and eggs from states where there have been cases,

although USDA is pressuring Mexico to only ban imports from specific counties where there have been infections.

Exports were already expected to be down this year, but USDA in its latest supply/demand report slashed them by another 420 million pounds, or 5.9%, leaving them down 8.5% from a year ago.

That reduction will mean more poultry in the domestic market, where they will increase the competition for pork and beef at the grocery store. Already, frozen chicken stocks increased 2.7% in March according to USDA’s Cold Storage report. Analysts had been expecting a significant decline. Total frozen poultry supplies as of March 31 were 18.6% bigger than a year ago, and well above the five-year average.

MINOR STORY IN FEED There’s been plenty of talk about the

potential impact on feed demand from the bird flu. It’s possible the outbreak has put some psychological pressure on the grains complex, including soybean meal, but ultimately the impact should be minimal.

According to the National Chicken Council, the average broiler chicken consumes roughly 11.6 pounds of feed, including both corn and soybean meal, and lives 47 days. The U.S. slaughters roughly 8.6 to 9.0 billion broilers per year. Looking specifically at corn, broilers consume about 7 to 7.5 pounds of corn per bird, or 0.125 to 0.13 bushels. Assuming 8.8 billion broilers in a given

year, that would amount to roughly 1.1 billion bushels.

So if this virus were to hypothetically claim 1% of the entire broiler flock for an entire year – keep in mind there hasn’t been a single case in a broiler flock yet – that could result in a 11-million bushel cut in corn demand. Assume similar reductions for corn demand for laying hens and turkeys, which is also unlikely given that each layer consumers less corn and the relatively small size of the turkey flock, and you are looking at a reduction in corn demand of 33 million bushels, out of more than 5 billion bushels for corn used as feed each year. That’s not an absolute worst-case scenario, but it is an unlikely one, and even that would have limited actual impact on feed markets.

THE BOTTOM LINEThis flu outbreak is expected to be

like any other outbreak in that once the weather warms up it will fade away. For the grains, any impact on the markets is mostly in traders’ heads. For livestock, the poultry export bans will cause supply to back up and force retailers to lower prices to move the product, which could weigh on beef and pork demand.

Researchers expect the virus will re-emerge in the fall, and possibly stick around for a few years. And although there is little threat to human health and there have been no human cases, that prospect will keep the virus in the national news. If there is a human case, the concern immediately shifts to consumer demand.

As it did with the Porcine Epidemic Diarrhea virus in hogs, the USDA is working on a vaccine for the bird flu. But ultimately bird flu is not likely to be as much of a problem as PED.

BIRD FLU OUTBREAK... (continued)

© Can Stock Photo Inc. / ugibugi

Metric tons % of 2014 Jan-Feb 2015 vs. last year

Mexico 927,220 25% 3%

Angola 234,195 6% -61%

Canada 173,035 5% 7%

China 145,461 4% -85%

Russia 144,089 4% -100%

Cuba 143,638 4% -5%

Taiwan 118,387 3% 54%

Hong Kong 111,977 3% 15%

Guatemala 87,331 2% 25%

Korea, South 67,462 2% -91%

Rest of World 1,544,054 42% -9%

World Total: 3,696,848 100% -14%

Top 10 -17%

Source: USDA GATS Rest of World -9%

U.S. Combined Turkey and Broiler Chicken Exports off to a Bad Start

© Can Stock Photo Inc. / hinnamsaisuy

3EMAIL BREPORT@BROCKREPORT.COM

Lead story . . . . . . . . . . . . .1Fundamentals . . . . . . . . .3News Analysis . . . . . . . . .4Corn . . . . . . . . . . . . . . . . .6Soybeans . . . . . . . . . . . . .8Management/Biofuels . .10Wheat . . . . . . . . . . . . . . .12

Rice . . . . . . . . . . . . . . . . .14Cotton . . . . . . . . . . . . . . .15Hogs . . . . . . . . . . . . . . . .16Cattle . . . . . . . . . . . . . . .17Feed/Inputs . . . . . . . . . .18Financials/Energy . . . . .19Positions . . . . . . . . . . . . .20 C

ON

TEN

TS

While nearly 40% of the 2014/15 marketing year for corn and soybeans is still ahead, a look at forward sales for 2015/16 offers insights into what to expect from the demand side longer term, especially for soybeans. Meanwhile, in the wheat market, the demand focus is shifting quickly to new crop with 2015/16 only 5-1/2 weeks off.

The advance soybean sales data is probably most eye-opening. The soybean market has gotten used to big advance export bookings, primarily to China, but this year is different because of record world/South American supplies and the strong dollar. While U.S. soybean sales for next market-ing year have picked up since early March, they are nearly 47% behind a year ago and 33.5% behind the 5-year average. This suggests a much slower start to the 2015/16 U.S. export campaign, which will mean reduced competition for supplies at har-vest and weaker prices/basis levels. South Ameri-can 2014/15 crop beans should be competitive in the export market well into 2015/16.

The strong dollar and large world supplies will lead to a weak start for new-crop U.S. wheat ex-ports as well. Wheat export sales for next market-ing year are running 42.5% below last year and 24.4% below the 5-year average. With the Euro-pean Union crop looking very good and Black Sea region crop prospects improving, it won’t be easy for exports to catch up. Next marketing year corn sales are not especially far behind a year ago or the 5-year average, but they may be slow to pick-up seasonally this summer. Buyers are in no rush to book forward needs due to ample corn stocks and the strong dollar. On the positive side, foreign competition should ease somewhat in 2015/16.

FUNDAMENTALSCOMMENTARY

2015 Decisions Summer Seminar Series Mon; June 22nd Bloomington, IL

Tues; June 23rd Lafayette, IN

Wed; June 24th Grand Island, NE

Thurs; June 25th Ames, IA

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80 mil bushels so far vs .88 mil bushels last year,87 mil bushel 5-year average

Advance Soybean Sales for 2015/16 Marketing Year

Advance Wheat Sales for 2015/16 Marketing Year

150 mil bushels so far vs .283 mil bushels last year,226 mil bushel 5-year average

59 mil bushels so far vs .102 mil bushels last year, 78 mil bushel 5-year average

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scrapped its soybean stockpiling program last year. Beijing has promised subsidies to offset low prices, but hasn’t set subsidy rates.

UKRAINE SEES CORN AREA DOWNUkraine’s agriculture ministry this week said the country’s corn

area will fall about 8% from last year due to financial difficulties faced by Ukrainian producers, pegging plantings at 4.0 million hectares. The news had no noticeable impact on the corn market, though, as the trade has been anticipating a drop in Ukraine’s production due to the steep devaluation of its currency and producers’ inability to obtain loans. A shortage of funds is forcing producers to switch acreage into oilseeds to cut costs. This is likely to mean lower use of inputs, possibly resulting in lower yields.

TRUCKERS STRIKE, NO IMPACTSome independent Brazilian truckers went on strike again

starting Thursday after failing to win concessions from the government on freight rates and fuel prices. However, the strike does not look like a widely coordinated effort. It was already sputtering on Friday with road blockages down to 11 from 17 the night before, according to police. With Brazil’s soybean and first-crop corn harvest winding down and large supplies at ports, this strike seems unlikely to disrupt grain exports much.

WORLD NEWS ANALYSIS

COFCO’S BIG PLANSChina’s large state-run grain trader COFCO has plans to become

a major player in the international grains market in the near future, competing on the level of the so-called “ABCD” firms – ADM, Bunge, Cargill and Louis Dreyfus – that dominate world trade. COFCO chairman Ning Gaoning on Tuesday told a conference in Geneva, Switzerland that the firm could look to list its stock publicly within 3 to 5 years. Since February of 2014, COFCO has invested $2.8 billion to establish joint ventures with Hong Kong-based Noble Group Ltd’s agribusiness and Dutch grain trader Nidera. COFCO paid $1.5 billion for a 51% interest in Noble Agri and bought a 51% stake in Nidera for about $1.3 billion.

COFCO plans further investments and is already eyeing North American interests. “That is a place you cannot ignore,” Ning said when asked if COFCO could expand in North American markets. Last month, Paul Liu, COFCO’s head of North America, told the Wall Street Journal the company had begun sounding out U.S. companies on potential deals that could expand its U.S. presence. Such deals could include acquisitions or partnerships with rivals to secure U.S. ports and grain terminals, giving COFCO better access to large U.S. corn and soybean supplies, Mr. Liu said.

COFCO’s plans may anticipate Chinese policy changes. Ning said China must rethink its food supply policy, noting production costs are higher due to land prices, water and other services becoming more expensive. “Put it all together and policymakers have to rethink their self-sufficiency policy. They have to (adopt) an adequate import policy. It is a good thing to replace a higher cost (product) and leverage power on world market,” he said.

CHINA TO BOOST CORN PLANTINGSWhile producers in many corn producing countries are cutting

acreage due to lower prices, Chinese farmers are set to expand corn plantings again this year as the country’s grain stockpiling program continues to support domestic corn prices at levels well above the world market. Initial estimates by Shanghai JC Intelligence Co. Ltd. and Beijing Orient Agri-business Consultant Co. Ltd. are for corn plantings to grow by 3%, Reuters News Service reports. This will further complicate China’s efforts to reduce its huge corn reserves, reportedly now at a record high 150 MMT after record purchases from the 2014/15 crop.

The rise in corn plantings will come partly at the expense of soybean acreage, which is set to fall again, making China even more reliant on soybean imports to meet its large needs. Chinese analysts see soybean plantings falling another 10-15%. Chinese producers don’t know what subsidies to expect from the government, which

WORLD WEATHER HOTSPOTSSouthern Asia is likely to see reduced monsoon rains this

year with an full El Nino weather event likely to be in place by summer. India’s government this week forecast the country’s monsoon rains at 93% of normal (defined as 96%-104% of the 50-year average). This raises the potential for below-normal production of India’s summer crops for a second straight year. In 2014, the monsoon rains were only 88% of normal against against a forecast of 95%.

In China, favorable conditions supporting early spring fieldwork and planting are expected to continue in the North China Plain and east-central Provinces the middle of next week, before rains arrive.

World Weather Inc. says the increase in moisture will cause a brief delay in fieldwork and planting, but sufficient rainfall is expected to ensure favorable conditions prevail in the North China Plain and east-central Provinces for continued planting and early-season crop development. Meanwhile, the moisture will be welcome from Inner Mongolia into western portions of the key Northeast growing provinces where a boost in soil moisture is expected.

5EMAIL BREPORT@BROCKREPORT.COM

ANOTHER DRONE USE FOR AG: CROP INSURANCE CLAIMS

Crop insurance adjusters may have some competition, or at least a new tool to make their jobs a lot easier, in the coming years. Archer Daniels Midland said this week it plans to use drones to check out crop insurance claims as soon as summer 2016.

The company is one of a small number of businesses connected to agriculture, including Monsanto’s ClimateCorp, that have won FAA exemptions to the ban on commercial drone use, according to Reuters. The company said costs savings would be “significant,” without providing specifics. It will save adjusters from having to walk into fields to measure damage.

ADM’s Crop Risk Services already owns two drones and will begin testing the technology this year, with a hope of rolling it out next year. The FAA, after a long delay, proposed rules on commercial drones in February limiting their use, but those regulations won’t be final for months if not years. The FAA exemption allows ADM to fly the drones within 400 feet of the ground and within sight of the operator. ADM must have farmer permission to fly the drones over their land.

Companies must certify that the drones will be operated by licensed pilots, and that a second person will be on hand to observe the flights in order to get an FAA exemption.

DESPERATION, BUT NOT FOOD PRICES, UP IN CALIFORNIA California’s drought, seemingly as bad as a drought can get, managed to get a little worse last week. The weekly U.S. Drought Monitor showed that the portion of the state in “exceptional” drought, the worst category, inched higher to 46.77%, from 44.32% the prior week. That is the highest it has been since early December, when some modest rains prompted temporary optimism that the situation could improve.

We’re still a few months away from the next rainy season, and between now and then there will be all sorts of proposed remedies. The actor William Shatner drew some attention this week by suggesting a pipeline from Seattle. More serious voices in the Upper Midwest have started to question when, or if, the West Coast will start asking about Great Lakes supplies. One Minnesota news outlet raised the prospect of a 900-mile pipeline from Lake Superior to southwest Wyoming.

Despite all the concern and growing sense of desperation, the drought has had little impact on food prices. A new USDA report this week says that the impact of the drought on the price of

fresh fruit and vegetables is mitigated by a strong U.S. dollar and cheaper oil prices.

Meanwhile some areas along the coast have not been quite as dry, and mild weather has made for strong crop prospects for certain items, such as strawberries. USDA’s most recent estimate is for fruit and vegetable prices to climb 2.5% to 3% this year, in line with historical averages.

EPA SAYS GLYPHOSATE TESTING A POSSIBILITY

With environmental groups focusing increasingly on glyphosate because of its widespread adoption, the EPA says it “may”

recommend testing food for glyphosate residues.Although U.S. regulators and others around the

world have said glyphosate, the active ingredient in Monsanto’s Roundup herbicide, is safe, a research arm of the World Health Organization said last month that it was “probably carcinogenic.” As

we explained then, this designation still does not indicate it is an actual threat to human health, and

was hotly contested by the industry.But that WHO report only adds to public scrutiny, which the

EPA recognized. “Given increased public interest in glyphosate, EPA may recommend sampling for glyphosate in the future.” EPA said that ultimately any decision on testing would be up to USDA.

CORN GROWERS REORGANIZE, FOCUS ON BUILDING DEMAND

With the prospect of another strong crop burying corn prices, the industry is hoping for a revival in demand to help keep the farm economy afloat. The National Corn Growers Association announced Friday it has launched an immediate search for a new Vice President for Market Development, tasked with “managing market initiatives to build demand for ethanol, livestock feed, biobased products and food uses of corn.

The group’s CEO Chris Novak said “we need to be looking for new markets to create sustainable opportunities for today’s farm families.” The NCGA announcement is part of a broader reorganization “that brings greater focus on building corn demand.”

The NCGA noted that farmers are worried about whether current market prices will rise to cover the cost of production, availability of operating capital, and the future for their children on the farm. See next week’s Brock Report for special coverage of how farmers and agriculture in general are dealing with the ever-increasing strain on the farm economy.

NATIONAL NEWS ANALYSIS

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CASH CORN

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WEEKLY CONTINUOUS

CENTRAL ILLINOIS CASH CORN

CORN

14 DAY RSI

Contract Size: 5,000 buDaily Limit: 25 cents/bu

Source: USDA AMS

BrokenResistance

JULY 2015

BrokenSupport

BrokenSupport

Resistance

High: 6.12 1/4 12/6/12

Low: 3.46 3/410/1/14

7EMAIL BREPORT@BROCKREPORT.COM

Year begins Sept 1 13/14 Est. 14/15 Proj 13/14 14/15 15/16ACREAGE (million)

Planted Area 95.4 90.6 95.4 90.6 88.5Harvested Area 87.5 83.1 87.5 83.1 81.4Yield 158.1 171.0 158.1 171.0 167.5

SUPPLY (mil bu) Beg. Stocks 821 1,232 821 1,232 1,828Production 13,829 14,216 13,829 14,216 13,635Imports 36 25 36 25 25

Total Supply 14,686 15,472 14,686 15,473 15,488USAGE (mil bu)

Feed & Residual 5,036 5,250 5,036 5,300 5,300Food/Seed/Ind 6,501 6,595 6,501 6,545 6,650

Ethanol & By-Products 5,134 5,200 5,134 5,150 5,200Domestic Use 11,537 11,845 11,537 11,845 11,950Exports 1,917 1,800 1,917 1,800 1,850

Total Use 13,454 13,645 13,454 13,645 13,800

Ending Stocks (mil bu, Aug 31) 1,232 1,827 1,232 1,828 1,688CCC 0 0 0 0 0Privately-Owned 1,232 1,827 1,232 1,828 1,688Stocks/Use 9.2% 13.4% 9.2% 13.4% 12.2%Farm Price ($/bu) $4.46 $3.55-3.85 $4.46 $3.45-3.85 $3.30-4.00

Brock USDA

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Commitments of TradersFutures and Options Combined, as of April 14, 2015

Commercials

PriceContracts

Large Specs

Source:CFTC

Price(dotted line, left scale)

VOLUME

OPEN INTEREST

CORN

U.S. SUPPLY & DEMAND

DECEMBER 2015 High: 6.00

9/19/12Low: 3.64 1/4

10/1/14

COMMENTARY

This market fell steadily throughout the week, and losses accelerated Friday as futures broke through March lows to their lowest levels since the fall. It’s been a long spring for growers in the Delta and lower Midwest, but for most of the Corn Belt the weather outlook for the next couple weeks could not be better. Prospects for a rally on planting problems are fading. Basis levels have remained firm on slow farmer selling, as producers are focused on planting and hoping for a better price. But there is still a lot of corn left to sell, and those who haven’t sold much are running out of time.Cash-only Marketers’ Strategy: Old crop sales are at 80%, new crop at 40%. Hedgers’ Strategy: Old-crop cash sales are now at 90%. In the new crop, 20% is forward contracted and we are hedged on 60% with 40% in December futures and 20% in March ’16 futures. 10% of the 2016/17 crop is hedged with long December ’16 $4.20 puts and short (2) December $5.00 calls establishing a floor of $4.20.

SEPTEMBER 2015 High: 5.50

4/30/13Low: 3.54 1/4

10/1/14

BrokenSupport

BrokenSupport

Resistance

Resistance

Resistance

DECEMBER 2016 High: 5.60

12/18/12Low: 3.9010/1/14

Broken support

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WEEKLY CONTINUOUS

14-DAY RSI

850900950100010501100

Oct Nov Dec Jan Feb Mar Apr

CENTRAL ILLINOIS CASH SOYBEANS

SOYBEANS

Resistance

Source: USDA AMS

Broken Support

Contract Size: 5,000 buDaily Limit: 70 cents/bu Reversal

down

JULY 2015High: 13.01

9/04/12Low: 9.35 1/4

10/1/14

9EMAIL BREPORT@BROCKREPORT.COM

COMMENTARY

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Large Specs

Commercials

Source:CFTC

Price(dotted line, left scale)

VOLUME

OPEN INTEREST

NOVEMBER 2015High: 13.00 10/11/12

Low: 9.27 1/29/28/14

AUGUST 2015High: 12.72 1/2

5/22/14Low: 9.41 3/4

9/29/14

SOYBEANS

Year Begins Sept 1 13/14 14/15 Proj 13/14 14/15 15/16

ACREAGE (million)Planted Acres 76.8 83.7 76.8 83.7 87.5Harvested Acres 76.3 83.1 76.3 83.1 87.0Yield 44.0 47.8 44.0 47.8 45.0SUPPLY ( mil bu) Beg. Stocks 141 92 141 92 365Production 3,358 3,969 3,358 3,969 3,915Imports 72 30 72 25 20 Total Supply 3,570 4,091 3,570 4,086 4,300USAGE (mil bu) Crush 1,734 1,795 1,734 1,795 1,800Exports 1,647 1,790 1,647 1,790 1,800Seed 97 98 97 98 98Residual 0 38 0 38 30 Total Use 3,478 3,721 3,478 3,721 3,728

Ending Stocks (mil bu, Aug 31) 92 370 92 365 572 CCC 0 0 0 0 0 Privately-Owned 92 370 92 365 572Stocks/Use 2.6% 9.9% 2.6% 9.8% 15.3%Farm Price ($/Bu) $13.00 $9.60-10.60 13.00$ $9.25-10.75 $8.00-9.50

BrockUSDA

U.S. SUPPLY & DEMAND

Resistance

Resistance Soybean futures ratcheted higher much of the week on fund short covering, improved sentiment toward Chinese demand and concerns about availability of large South American supplies. However, prices retreated from 2-1/2 week highs on Friday fin-ishing near unchanged for the week. Our outlook on soybean prices has not changed. We still see major downside risk due to burdensome world supplies. Prices could break as soon as the market is assured the U.S. crop will get off to a good start. For Nov. soybeans, a drop through major support at $9.27 1/2-$9.34 will likely start a new major move down.Cash-only Marketer’s Strategy: Old-crop is 85% sold and 40% of the new-crop been forward contracted.Hedgers’ Strategy: Old-crop is long gone. New crop is 10% cash contract-ed and we boosted hedge coverage in short Nov. futures to 60% of the crop this week. We also sold Nov. ‘16 fu-tures on 30% of the ‘16 crop and are now 40% hedged for that crop.

Brokensupport

Resistance

NOVEMBER 2016High: 12.50

12/6/12Low: 9.43 1/4

3/19/15

Brokensupport

Support

Reversaldown

Reversaldown

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WEATHER

MANAGEMENT DECISIONSINSIDE BROCK

Bank regulations have requirements, restrictions, and guide-lines that are tougher than in the past, and are becoming strict-er. The creditors that finance farms aren’t only under pressure internally, but also from regulators. When farm profitability was stronger, lenders may have become more complacent along with farmers. This is changing—especially for next year. Regu-lators that have less than 5 years of experience may tend to panic more quickly, and create added pressure for lenders and ultimately farmers. Good records will take you over that hurdle.

How do you start? Hire a firm to figure your accrual profit-ability if you can’t do it yourself. Maybe even go back a few years and have it figured for a better picture. If you didn’t have a strong year in 2014 and face an equally or more challenging 2015, you will benefit from historical records averagingn in a previous year that may have been more profitable. For example, you may have made $300,000 in 2013 and lost $100,000 in 2014, but on average made $100,000. An adjusted average may present a comfortable track record, and prevent you from get-ting overconfident based on any one year.

Paper equity may be misleading. Land values have made bal-ance sheets artificially strong in some cases—making you feel stronger than you really are. This will adjust. Up to date re-cords take equity adjustments into consideration while provid-ing a better value of the business’s assets. Your burn rate that measures negative cash flows in terms of years you can survive without having a positive income, will change with these eq-uity adjustments.

Dr. Kohl stressed having a plan B, so I recommend knowing where you are to know when the plan B needs to come into play. The quicker you know your situation, the quicker you can adjust. Sell your strengths with proper records. Liquidity will be your saving grace, and good records will paint the true pic-ture for planning and survival.

-Email Katie at khancock@brockreport.com

ON TOPIC

GOOD RECORD-KEEPING MAKES A DIFFERENCE

INSIDE BROCK

Katie HancockMarketing Consultant

I’ve had the opportunity to hear Dr. Dave Kohl, professor emeritus at Virginia Tech, speak twice recently—once at out Brock Ag Economic Symposium, and again closer to home in western Kentucky for a farm meeting sponsored by River Valley AgCredit. He has a background in agricultural and applied eco-nomics and helps farmers and lenders worldwide. Besides being an influential speaker, Dr. Kohl has great knowledge about what creditors and farmers need to work together. The biggest take-away for me was the importance of financial records.

We all know the importance of business record keeping, es-pecially in highly leveraged farm situations. Why? Because you have to prove your strengths. Hearing rumors of farms going out of business makes us more focused on what it takes to survive.

The biggest threat we’re seeing during tough times is financ-ing. Brock Associates held around 30 marketing meetings with lenders across the U.S. this past winter. Each lender was not only concerned with farm marketing, but also the financial planning tools their farmers used to make these decisions. The concern existed even before 2015 financing needed renewing.

How do you protect yourself from losing financing? Simply put, sell yourself through financial records. You may be one of the greatest producers and even have a financially solid busi-ness, but detailed financial records will make or break your sell-ing point. If you can’t show your strengths in a confident manner through records, don’t expect much buying power in terms of interest rates or a loan in general.

A GLOSSARY OF RECOMMENDATIONSOur staff meets each morning shortly after the market open to

discuss the market, our strategies and trade recommendations. For new readers or those who could use a refresher, here are the types of trade recommendations we most commonly make.

Market Order: Our consultants and brokers have decided to sell or buy a commodity at the current market price, whatever that happens to be. The recommendation in this case will in-struct to buy or sell “at the market.”

Straight Stop: This is a recommendation to establish an order that is triggered if the market hits a set price. In a downtrend-ing market, we might set a straight sell stop at a price below the market. If the market hits that price at any point during the ses-sion after the recommendation is made, we sell. In uptrending markets, we would establish a buy stop.

Stop Close Only: This is a stop that is triggered only if the mar-ket trades at or above (or below, depending on the recommen-dation) during the last five minutes of trade before the market closes.

11EMAIL BREPORT@BROCKREPORT.COM

BIOFUELS

As for the imports, it’s tough to read very much into one week, which could turn out to be a blip. The 53,000 barrels were the first ethanol imports in four months, and according to Platts the largest amount in a couple years. While we have noted recent-ly that the outlook for Brazil exports are strong, U.S. ethanol prices are likely not high enough to encourage wide-spread imports.

CHINA DDG IMPORTS IMPROVE

Ethanol production mar-gins are expected to improve as the year progresses, and could get a further boost if China continues to add to its distiller dried grains imports. After effectively banning imports of U.S. DDGs through last fall, China has slowly been returning to the market.

Customs data showed China imported 243,000 metric tons of DDGs, in March. That is down 44% from a year ago, but it is triple February’s total, and serves as con-firmation of reports at the start of the year that China was looking to book DDG shipments for late winter and early spring.

NEW PROJECT USES STEEL TO MAKE FUEL Waste-to-ethanol is not a new concept,

but a project in China appears to be breaking new ground in this field. China Steel Corp. said this week it would invest $46 million to attach an ethanol facility to a steel plant in Taiwan. The project would be the first commercial scale pro-ducer of ethanol using waste gas technology.

The new technology uses proprietary mi-crobes to capture and

reuse carbon-rich gasses and turn them into fuel. The plant is expected to produce 30 million gallons annually. China of course has tremendous air pollution problems, and a project like this attacks those problems on two fronts: by converting the carbon gases instead of releasing them into the air, and by displacing fossil fuels with a renew-

able energy source. The technology has been developed by Chicago-based

Lanza Tech, and one wonders if it will also be applied at the nearby steel mills in Gary, Ind.

Another project revealed this week is a little more con-

ventional: Perdue Farms and AgEnergy USA are teaming up

on a project that will convert poultry waste into biogas. The facility is expected to process as much as 200,000 tons of waste annually.

As with the China project, this Mary-land-based project will address a pollution concern: water quality in the Chesapeake Bay. Agriculture in that area faces strict reg-ulations on water quality compared to the Mississippi River watershed.

ETHANOL POLITICS: IT’S COMPLICATED Unlike most of the rest of what goes on in Washington, the politics of ethanol show no clear partisan divide. Ethanol largely supports rural, conservative areas, but the history of government support has made foes of some conservatives. Meanwhile some environmentalists have turned on ethanol while others continue to promote it as a safer, “greener” alternative to crude oil. In this latter category is a group called Americans United for Change, a lib-eral group that has launched a six-figure advertising campaign in the Midwest promoting the RFS and warning that its repeal could result in another inci-dent like the Deepwater Horizon spill. The Hill newspaper says the campaign is meant to target Republican presiden-tial candidates who oppose the RFS.

ETHANOL OUTPUT TRAILS USDA OUTLOOK

Ethanol stockpiles continue to swell, as EIA reported an increase of 697,000 bar-rels to 21.3 million barrels in the week ended Friday, a 3.4% increase. Although the gain was accompanied by an uptick in production, daily output of 930,000 bar-rels per day, up from 924,000 the week before, is still lackluster. EIA also reported imports of 53,000 barrels per day on the East Coast.

USDA should have to cut its forecast for 2014-15 corn-for-ethanol use a bit further, based on recent production levels. Over the past 4 weeks, U.S. ethanol output has averaged 935,500 barrels per day, 2% above last year, but below the level implied by USDA’s use forecast. The 4-week aver-age production implies corn-for-ethanol use of 98.2 million bushels per week (at 2.8 gal. of ethanol per bu.), and usage must avg. 100.5 million bushels per week to reach USDA’s target.

Ethanol output should rise seasonally into late spring/early summer, but contin-ued poor margins for producers and the fact U.S. ethanol stocks are 29.2% above a year ago, suggest the seasonal recovery may be smaller than normal. We have been es-timating corn-for-ethanol use at 50 mil-lion bushels below USDA for some time, so any USDA cut would not change our balance sheet.

4,431

4,531

4,631

4,731

4,831

4,931

5,031

5,131

5,231

5,331

5,431

85

90

95

100

105

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

Weekly (mil bu)

2013/14

2014/15

Source: EIA, Brock Associates

100.45needed per

week

5,500

5,000

5,250

4,750

4,500

Annualized

Weekly Corn for Ethanol Still Less Than Needed

12 800-558-3431

CHICAGO WEEKLY

CHI #1

CHI #2

CHI #3

WHEATCHICAGO JULY 2015

High: 8.00 9/28/12

Low: 4.84 1/23/6/15

High: 7.72 5/9/14

Low: 5.09 1/43/6/15

DECEMBER 2015

JULY 2016High: 7.32

5/6/14 Low: 5.31

3/6/15

Contract Size: 5,000 buDaily Limit: 35 cents/bu

Brokensupport

Brokensupport

Resistance

Resistance

Resistance

Brokensupport

Support

13EMAIL BREPORT@BROCKREPORT.COM

450

500

550

600

650

700

Nov Dec Jan Feb Mar Apr

650

700

750

800

850

900

Nov Dec Jan Feb Mar Apr

Wheat futures rebounded modestly through Thursday, but the bottom fell out on Friday as the market succumbed to a bearish atmosphere in the grains generally and a lack of worry about U.S. crops. Prices set new lows in many contracts. Although the HRW crop in the southwest Plains continues to suffer from drought, most other areas have seen much-needed rains this month that put to rest any bullish supply story. Crop conditions are also favorable in Europe and into the Black Sea region. Competition for U.S. exporters remains stiff and is unlikely to let up soon. The selloff in corn is another headwind for wheat.Cash-only Marketers’ Strategy: Old-crop has been sold for a long time and 40% of the new crop has been forward contracted.Hedgers’ Strategy: Old crop is sold and 30% of the new crop is priced. We have no hedges on.

COMMENTARY

Year Begins June 1 13/14 14/15 Proj 13/14 14/15 15/16

ACREAGE (million)Planted Area 56.2 56.8 56.2 56.8 55.3Harvested Area 45.3 46.4 45.3 46.4 46.1Yield 47.1 43.7 47.1 43.7 43.5SUPPLY (mil bu) Beg. Stocks 718 590 718 590 711Production 2,135 2,026 2,135 2,026 2,005Imports 169 145 169 145 160 Total Supply 3,021 2,761 3,021 2,761 2,876USAGE (mil bu) Food/Seed 1,029 1,037 1,029 1,030 1,030Feed & Residual 226 160 226 160 175

Domestic Use 1,255 1,197 1,255 1,190 1,205Exports 1,176 880 1,176 860 950 Total Use 2,431 2,077 2,431 2,050 2,155

Ending Stocks (mil bu, May 31) 590 684 590 711 721 CCC 0 0 0 0 0 Privately-Owned 590 684 590 711 721Stocks/Use 24.3% 32.9% 24.3% 34.7% 33.5%Farm Price ($/Bu) 6.87$ $6.00-6.10 6.87$ $5.85-6.15 $5.50-6.30

BrockUSDA

U.S. SUPPLY & DEMAND

500

550

600

650

700

Oct Nov Dec Jan Feb Mar Apr

MINNEAPOLIS CASH (U.S. #1, 14% PROTEIN)

High: 7.90 5/6/14

Low: 5.52 4/17/15

WHEATKANSAS CITY

July 2015High: 8.20 5/9/14

Low: 5.06 1/44/24/15

Source: USDA AMS

KANSAS CITY CASH

ST. LOUIS CASH

Source: USDA AMS

Source: USDA AMS

MINNEAPOLISSeptember 2015

Daily Limit: 60 centsContract size: 5,000 bu

Daily Limit: 40 cents/buContract size: 5,000 bu

BrokenSupport

BrokenSupport

14 800-558-3431

Year begins Aug 1 13/14 14/15 Proj. 13/14 14/15 15/16ACREAGE (Mil. Acres)

Planted Area 2.49 2.94 2.49 2.94 2.96Harvested Area 2.47 2.92 2.47 2.92 2.94Yield (Pounds) 7,694 7,572 7,694 7,572 7,625

SUPPLY (Mil. cwt)Beg. Stocks 36.4 31.8 36.4 31.8 42.6Production 190.0 221.0 190.0 221.1 223.9Imports 23.1 23.5 23.1 23.0 19.0

Total Supply 249.5 276.4 249.5 275.9 285.5USAGE (Mil cwt) Domestic & Residual 124.9 129.0 124.9 129.6 133.5Exports 92.7 105.0 92.7 103.7 109.5 Rough 28.6 35.0 28.6 34.5 36.0 Milled (Rough Eq.) 64.1 70.0 64.1 69.2 73.5Total Use 217.6 234.0 217.6 233.3 243.0Ending Stocks 31.8 42.4 31.8 42.6 42.5 Farm Price ($/cwt) 16.30 14.00-14.40 16.30 13.90-14.50 12.00-14.00

BrockUSDA

Rice futures on Monday held sup-port at the bear-market lows estab-lished the prior Friday, and climbed from there amid short-covering and a sluggish U.S. planting season. As rebounds go, this was “tepid,” as by Friday nearby May futures were back below the $10 market. Prices for May and July are more then 20 cents off the bear-market lows, however.

Planting in Arkansas was 28% done as of April 19, well off the aver-age of 44%, and there has been some talk of reduced acreage. However the supply outlook is still comfortable in the U.S. and world prices remain on the defensive, with prices in Thailand and Vietnam hitting fresh 10-month lows in the past week. Weekly net export sales were improved but un-exceptional at 65,600 metric tons. The swoon across the grains complex does not bode well for rice, although the market can be contrary.

Strategy: Hedgers and cash-only sellers are now 70% sold on 2014 production in the cash market. They are carrying all risk in the cash mar-ket for the 2015 crop.

COMMENTARYNEARBY CONTRACT

DEFERRED CONTRACT

RSI

WEEKLY CONTINUOUS

14-DAY RSI

RICE

Year Beginning Stocks Production Consumption Ending

StocksStocks/Use

Ratio

2007/08 75.29 432.95 427.3 80.93 18.9%

2008/09 80.93 449.13 437.5 92.55 21.2%

2009/10 92.55 440.89 438.7 94.74 21.6%

2010/11 94.74 449.96 444.9 99.80 22.4%

2011/12 99.80 466.99 460.0 106.80 23.2%

2012/13 106.80 471.94 468.5 110.22 23.5%

2013/14 110.22 476.88 480.09 107.01 22.3%Change from March 0.08 -0.20 -0.68 0.56 0.1%

2014/15 107.01 474.60 483.03 98.58 20.4%Change from March 0.56 -0.26 -0.65 0.94 0.2%

* Values in million metric tons; bold numbers are USDA projections.

WORLD SUPPLY & DEMAND U.S. SUPPLY & DEMAND

SEPTEMBER 2015

Contract Size: 2,000 cwtDaily Limit: $1.10/cwt

Resistance

JULY 2015

High: 12.50 12/12/14

Low: 10.26 1/24/17/15

Broken support

Resistance

Resistance

High: 12.915 12/19/14

Low: 10.00 1/24/17/15

Broken support

15EMAIL BREPORT@BROCKREPORT.COM

WEEKLY CONTINUOUS

COMMENTARY

14-DAY RSI

DECEMBER 2015High: 82.95

5/5/14 Low: 61.28

1/23/15

COTTON

Marketing year begins August 1 13/14 Est. 14/15 Proj 13/14 14/15 15/16

ACREAGE (million acres)Planted Area 10.41 11.04 10.41 11.04 9.50Harvested Area 7.54 9.71 7.54 9.71 8.45Yield 821 806 821 806 825

SUPPLY (million 480-lb. bales) Beginning Stocks (August 1) 3.80 2.45 3.80 2.45 4.36Production 12.91 16.30 12.91 16.30 14.52Imports 0.01 0.01 0.01 0.01 0.00

Total Supply 16.72 18.76 16.72 18.76 18.88USAGE (million 480-lb. bales)

Mill Use 3.55 3.65 3.55 3.70 3.90Exports 10.53 10.70 10.53 10.70 10.70

Total Use 14.08 14.35 14.08 14.40 14.60Unaccounted 0.19 0.01 0.19 0.00 0.00

STOCKS (million 480-lb. bales) Ending Stocks (July 31) 2.45 4.40 2.45 4.36 4.28

Farm Price (¢/lb) 77.90 59 -61 77.90 61-64 57-68

Brock USDA

U.S. SUPPLY & DEMANDYear Beginning

Stocks Production Consumption Ending Stocks

Stocks/Use Ratio

2007/08 63.11 120.57 121.3 62.37 51.4%

2008/09 62.37 108.30 108.4 62.24 57.4%

2009/10 62.24 103.36 118.2 47.37 40.1%

2010/11 47.37 117.59 114.4 50.60 44.2%

2011/12 50.60 127.45 104.4 73.64 70.5%

2012/13 73.64 123.63 107.2 90.04 84.0%

2013/14 90.04 120.43 108.65 101.82 93.7%Change from March 0.02 -0.01 -0.10 0.11 0.2%

2014/15 101.82 119.23 110.96 110.09 99.2%Change from March 0.11 -0.02 0.07 0.03 0.0%

* Values in million 480-pound bales; bold numbers are USDA projections.

WORLD SUPPLY & DEMAND

JULY 2015High: 83.40 05/5/14

Low: 58.571/23/15

Daily Limit: 4¢/lb.Contract Size: 50,000 lbs.

Resistance

Cotton Planting Progress as of May 11

Cotton prices stabilized this week after last week’s swoon and then popped on Thursday, soaring by 4% in the July contract. The market fol-lowed that up with gains on Friday, and was approaching the upper end of the trading range from the past couple months. It will need to take out those highs, at 67.19 in May and 65.98 in December, to maintain the upward momentum.

Bull spreading drove the market late in the week. The market had swooned prior to this week as demand dried up, but it re-emerged on the break. Weekly export sales were unexcep-tional but much improved, with old crop net sales totaling 144,900 bales and new crop sales of 67,100. Ship-ments were up sharply from a week ago at 324,000 bales. The crop out-look is mostly benign, with conditions in Texas improved from recent years.

Strategy : For 2014 crop, cash-only marketers and hedgers are now 100% sold in the cash market. For the 2015 crop, we took advantage of the rally this week by making a 20% sale for cash-only marketers and hedgers, our first sale of the year.

Support

Support

16 800-558-3431

9-DAY RSI

After stumbling last week, hog fu-tures rebounded in volatile trade this week as indications of improving pork demand provided fundamental sup-port. Futures overcame pressure from worries about building poultry sup-plies amid widening bird flu problems. Demand worries helped send prices to 3-week lows on Monday.

The composite pork cutout value rose $3.53 during the week ended Thurs-day to its highest level since Feb. 24, despite continued large production. Weekly slaughter looks set to run about 2.3% below last week, but still 10.1% above a year earlier. Monthly slaugh-ter data shows March hog slaughter wound up 14% above a year earlier.

Thursday’s monthly USDA Cold Storage report showed U.S. frozen pork stocks fell 2.6% during March, which is a normal seasonal drop. This suggests exports continued to recover. Some an-alysts had expected an increase, so the data was viewed as mildly friendly, even though March 31st pork stocks were record high and up 16% from last year.

The chart picture for hog futures is looking firm again with summer-month futures looking set to challenge their mid-April swing highs. A close by most-active June futures above $79.75 should open further upside to at least $82-$83. The summer contracts may not have upside past the low $80s, though, with Q3 hog supplies seen up nearly 10% versus last year. October fu-tures continue to run into resistance in the $71-$72 range amid expectations for record Q4 hog supplies.Hedgers’ Strategy: Hedgers remain aside futures. Continue to take risk in the cash market for now.

COMMENTARY

AUGUST 2015

High: 99.65 7/22/14

Low: 72.053/24/15

HOGS

High: 95.35 11/24/14

Low: 73.553/24/15

OCTOBER 2015

FEBRUARY 2016

High: 92.50 5/5/14

Low: 64.7253/20/15

Daily Limit: 3¢/lb.Contract Size: 40,000 lbs.

JUNE 2015

High: 77.10 11/25/14

Low: 64.0253/19/15

Broken

resistance

Resistance

Broken

Resistance

350400450500550600650700750

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: USDA NASS

2015

20145-year average

million lbs. Pork in Cold Storage (end of month)

Broken

resistance

17EMAIL BREPORT@BROCKREPORT.COM

9-DAY RSI

After taking it on the chin from fund selling for a second straight session on Monday, both live cattle and feeder cattle futures rebounded strongly. Support came from futures’ discount to cash, stronger wholesale beef prices and expectations for Friday’s monthly Cattle-on-Feed report to show March placements down from last year.

Light to moderate live cattle trade developed in Kansas on Wednesday and Thursday. Wednesday sales were at mostly $157-$158, down $3 from last week, but Thursday trade was at $160 as futures rallied. The Nebras-ka dressed carcass market traded at mostly $252-$253, down about $4. The Choice beef cutout pushed above $260 per cwt., but met resistance from buyers there, which raises new doubts about demand amid stiff competition from large pork and poultry supplies.

Cattle supplies remain very tight with this week’s slaughter likely down 7.5% from a year earlier. Friday’s report is not likely to suggest larger supplies. On average, the trade expects USDA to peg March feedlot placements 5.1% below last year, and put the April 1 feedlot inventory at 1.2% smaller, ac-cording to a Bloomberg News survey.

Technically, live cattle futures will post strong upward hook reversals off 5-week lows, with most-active June futures set to close more than $6 off its weekly low of $145.18. The market has significant resistance in the $153.00-$154.00 area. June’s discount to cash has narrowed to less than $9.00. Hedgers’ Strategy: Live cattle hedg-ers are short Aug. and Dec. futures on 25% of Q3 and Q4 marketings. Feeder cattle sellers sold Aug. feeder futures on 25% of Q3 marketings on Monday and are short Oct. on 25% of Q4 sales.

COMMENTARY

WEEKLY CONTINUOUS

CATTLE

AUGUST 2015

High: 162.925 11/21/14

Low: 129.4251/31/14

High: 171.10 11//14

Low: 130.2011/26/13

LIVE CATTLE JUNE 2015

OCTOBER 2015

High: 160.40 11/2/14

Low: 137.7255/1/14

FEEDER CATTLE MAY 2015

Daily Limit: 4.5¢/lb Contract Size: 50,000 lbs.

High: 237.95 10/9/14

Low: 196.6752/25/15

AUGUST 2015

High: 237.525 10/9/14

Low: 190.4255/28/14

Brokensupport

Bearishreversal

Brokensupport

Broken support

Bearishreversal

Bearishreversal

Bearishreversal

Bearishreversal

Brokensupport

Brokensupport

18 800-558-3431

FEED/INPUTS

Feeds: There has been plenty of chatter about reduced feed demand in the wake of the bird flu, but as we note in our lead story in reality the im-pact should be minimal, and that was reflected in the soybean meal market. Futures were steady to slightly lower on the week. Basis levels were firm, owing mainly due to snug near-term supplies as some processors take downtime. De-mand is not great, and old crop soymeal net export sales slipped to 107,400 metric tons this week.

Prices for distiller dried grains were mixed in the past week. As noted on page 11, exports to China continued to pick back up in March. However the swoon in corn prices this week should keep a lid on DDG prices.

Fertilizers: Increased demand in some areas have done little to boost potash prices, which remain steady/slightly lower. Phosphate prices were mixed, with some scattered interna-tional demand boosting world prices while domestic prices were flat. Am-monia and UAN prices were steady/weaker.

Fuels: Crude oil prices along with heating oil continued to climb this week. Crude rallied to its highest level since late last year, fueled by concerns about the unrest in Yemen, along with signs that U.S. production has started to weaken.

At this stage the upside in crude and heating oil appears to be significantly greater than the downside. It is a good time to consider making fuel purchas-es. The approach of summer driving season could give a further lift to the complex.

COMMENTARY

75

100

125

150

175

200

Oct Nov Dec Jan Feb Mar Apr

$/ton

Source: USDA AMS

DRY DISTILLERS GRAINS NEBRASKA

SOYBEAN OIL JULY 2015

High: 48.75 5/6/13

Low: 29.79 1/29/15

SOYBEAN MEALJULY 2015

High: 409.30 5/22/14

Low: 294.4010/3/14

Contract Size: 100 tonsDaily Limit: $30/ton

Contract Size: 60,000 lbs.Daily Limit: 3.5 cents/lb

Brokensupport

Resistance

HEATING OIL JUNE 2015

BrokenResistance

Support

Broken Support

Support

19EMAIL BREPORT@BROCKREPORT.COM

FINANCIALS/ENERGYCOMMENTARY

The U.S. economy slowed in the first quarter, but the real question is whether the economy and corpo-rate profits rebound in Q2? GDP growth in the 1st quarter is expected to be just 1.2%, with economists looking for a rebound to 3.1% in Q2.

With 202 of 500 S&P 500 companies reporting, Q1 earnings are now estimated to be 0.4% lower than last year on 5.1% lower revenue. Second quarter earnings are expected to be better than Q1, but still 5.6% less than the same quarter a year ago.

Looking ahead, 2nd quarter manufacturing activity around the globe is slowing. Markit’s flash manufac-turing PMI for April calls for slower growth in the U.S. and the Euro zone, but in China, flash PMI for April fell to a one-year low of 49.2 from 49.6. Any-thing below 50 suggests contraction in the sector.

Although U.S. Durable Goods Orders in March rose 4% from February, the real story is that business investment spending or Core Capital Goods Orders fell 0.5%, the seventh straight monthly decline.

Global stock markets got a boost after China re-duced bank reserve requirements, a stimulus move that boosted the appetite for stocks. The NASDAQ Composite index hit a new record high, and the S&P 500 is poised to do the same.

U.S. crude oil production fell for the 3rd time in 4 weeks, but inventories increased to another 80-year high. After an almost $13/barrel rally over 4 weeks, June crude oil (WTI) paused just under recent highs.

Current Positions Open P/L Closed P/L

Corn S3CU5 @ $3.8425 $0 ($800)Soybeans S4SN5 11.00 calls $3,525 ($3,600)

Lean Hogs None $0 $1,820

Cotton None $0 ($430)

E-Mini S&P 500 None $0 $13

Crude Oil None $0 $2,190Hog - Cattle

SpreadL1HEV5 and S1LEV5 spread @ $80.375 $840 $0

2015 Total Profit (Loss) as of 4/23/15 $4,365 ($807)2014 Total Profit: $17,316

Recommendations since last Brock Report through 4/23/15: 4/17/15: Sold 1 December 2015 cotton @ 63.80 to exit4/22/15: Sold 3 December 2015 corn @ $3.8425 to open

There is a risk of losses as well as profits when trading futures and options. Position size is based on account size of $60,000. Profit/(loss) does not include brokerage commissions.

SPECULATIVE POSITIONS

U.S. DOLLAR INDEX

Support

E-MINI S&P 500JUNE 2015

CRUDE OIL (WTI)JUNE 2015

GOLDJUNE 2015

Charts on this page updated at 1 p.m., before the market close.

BrokenSupport

BrokenResistance

Support

12-year high

BrokenResistance

Support

Brokenresistance

20 800-558-3431

Monday’s Crop Progress report will be the most important ag report of the week. The Fed’s Federal Open Market Committee meets Tuesday and Wednesday, followed by a statement but no press conference. Also Wednesday, the advance estimate for U.S. Q1-GDP will be released. GDP growth estimates average 1.2% for Q1. No less than five manufacturing reports will provide an early look at how the second quarter started. Economists are looking for a rebound to 3.1% in Q2 GDP.

THE WEEK AHEAD

14/15 15/16 16/17Strictly Cash 80% 40% 0%

Hedgers Cash 90% 20% 0%Hedgers F&O 0% 60% 10%

14/15 15/16 16/17Strictly Cash 85% 40% 0%

Hedgers Cash 100% 10% 0%Hedgers F&O 0% 60% 40%

14/15 15/16 16/17Strictly Cash 100% 40% 0%

Hedgers Cash 100% 30% 0%Hedgers F&O 0% 0% 0%

14/15 15/16 16/17Strictly Cash 100% 20% 0%

Hedgers Cash 100% 20% 0%Hedgers F&O 0% 0% 0%

HOGS 15-I 15-II 15-III 15-IVFutures 0% 0% 0% 0%

Options 0% 0% 0% 0%

CATTLE 15-I 15-II 15-III 15-IVFutures 0% 0% 25% 25%

Options 0% 0% 0% 0%

FEEDERS 15-I 15-II 15-III 15-IVFutures 0% 0% 25% 25%

Options 0% 0% 0% 0%

MILK Apr May Jun JulCash 0% 0% 0% 0%

Futures 0% 0% 0% 0%

14/15 15/16 16/17Strictly Cash 70% 0% 0%

Hedgers Cash 70% 0% 0%Hedgers F&O 0% 0% 0%

CORN 15-I 15-II 15-IIICash 0% 0% 0%

Futures/Options 0% 0% 0%

MEAL 14-IV 15-I 15-IICash 0% 0% 0%

Futures/Options 0% 0% 0%

CONTACT USFor more information or customer service:

Brock Associates2050 W. Good Hope Rd., Milwaukee, WI 53209

Call 414-351-5500 or toll-free 800-558-3431 Email: breport@brockreport.com

PUBLICATIONSTHE BROCK REPORTPublished 48 times per year; © 2015 by Richard A Brock & Assoc., Inc.Subscription price: 1 year $525; 6 mo. $290; 3 mo. $160.

DAILY MARKET COMMENTSComments include all new advice, cash strategies, current positions. Issued three times daily; via email/Internet, for $425/year. Also available to subscribers of The Brock Report for $150/year.

MARKET EDGEThese online presentations provide in-depth analysis of USDA’s key reports, as well as occasional other topics of importance to the markets. Issued monthly via email for $249/year for non-subscribers to The Brock Report or Daily Comments; $175/year for subscribers.

COMMODITY NETWORK SYSTEMUse your phone to monitor recommendations even when you’re away from your desk. Buy a pre-paid block of minutes.

CONSULTING SERVICESBrock Associates offers different levels of personal marketing assistance. Call 800-558-3431.

BROKERAGE SERVICESBrock Investor Services offers complete brokerage services. Call 800-426-0923; in Indiana, 866-260-9819; in Louisiana, 800-525-2903.

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