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El Nino cheers up soybean producers

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Table of Contents (1/2)

01Executive Summary

• Epilogue• Global Soybean Market Overview• Contract Structures

02Market Analysis

• Global Market Outlook

– Current Market Size

– Demand–Supply Trends and Forecast

– Key End-use Industries

– Trade Dynamics

• Regional Market Outlook (US, Europe, and Asia)

– Current Market Size

– Demand–Supply Trends and Forecast

– Key End-use Industries (where applicable)

– Trade Dynamics

03Industry Analysis

• Industry Outlook (US, Europe, and Asia)

– Drivers and Constraints for the Industry

– Mergers & Acquisitions

– Innovations

– Porter’s Five Forces Analysis

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Table of Contents (2/2)

04Cost and Pricing Analysis

• Cost & Price Analysis (US, Europe, and Asia)

– Cost Structure Analysis

– Cost Drivers for Soybean

– Price Forecast for Soybean

05Industry Best Practices

• Key Sourcing Parameters

• Contract Structures

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Executive Summary

Sources: Government Reports, UN Comtrade, USDA, Beroe Analysis

GLOBAL SUPPLY (2016/2017)403.41 MMT GLOBAL CONSUMPTION (2016/2017) 329.81 MMTGLOBAL ENDING STOCKS 2016/2017) 71.24 MMT

KEY PRODUCINGCOUNTRIESUS (33%)Brazil (31%)Argentina (17%)China (4%)India (4%)

KEY EXPORTINGCOUNTRIESBrazil (43%)US (38%)Argentina (8%)Paraguay (3%)Canada (3%)

KEY CONSUMINGCOUNTRIESChina (31%)US (17%)Argentina (15%)Brazil (13%)EU (5%)

KEY IMPORTINGCOUNTRIESChina (64%)EU (9%)Mexico (3%)Japan (2%)Taiwan (2%)

Surplus Stocks (2016/2017 vs. past five years average)Global – 10.7% US – 94.4 %Brazil – (-0.3%) Argentina – 14.7%

EMERGING SUPPLY COUNTRIESUkraine: 2010 vs. 2015 - 24 percent growth in supply

TRADE TARIFFSUS – 1.5% (China), 0% (Mexico), 0% (Japan), 0% (Germany), and 0% (Indonesia)

Brazil – 1.5% (China), 0% (Spain), 80% (Thailand), and 0% (Netherlands)

Argentina – 1.5% (China), 0% (Egypt), 4% (Iran), 4% (Pakistan), and 80% (Thailand)

BENCHMARK PRICE INDICESCBOTUS GulfDutch Fob ex-millEtc.

COST DRIVERSApproximate 3.3 percent increase in the US production Seed – 12.8 percent of total costFertilizers and Chemicals – 13 percent of total cost

ENGAGEMENT MODELSContract Length: 1–3 months Contract Type: CBOT based + Basis BEST PRICE-LOCK MONTHS: Dec–Feb

PRICES IN KEY REGIONSUS: 9.72 $/BuBRAZIL: 417 $/MTARGENTINA: 253 $/MT

Weather Impact (2016/2017)US – Unfavorable (dry)Brazil – Unfavorable (dry)Argentina - Unfavorable (dry)

KEY SUPPLY CONSTRAINTS/DRIVERSExpected La Nina weather conditionsDecrease in Chinese importsDemand from the crushing industry

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Executive Summary

01 US

Production – 33 percent globallyConsumption – 17 percent globallyPrice – 9.72 $/Bu

02 Brazil

04 China

03 Argentina

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• Global soybean supply has been witnessing a steady growth of 5.2 percent CAGR during 2012–2016 crop years. The current crop year (2016/2017) production is expected to increase by 5.7 percent against the previous crop year (2015–2016). The anticipated increase is primarily due to El Nino weather conditions, which favored the soybean growth

• In 2016/2017, China’s recovering swine production will cause an increase in soybean demand, while in 2015/2016, the government’s decision to release soybean reserves is expected to offset the import demand

KeyTakeaway

03

Production – 31 percent globallyConsumption – 13 percent globallyPrice – 413 $/MT

Production – 17 percent globallyConsumption – 15 percent globallyPrice – 243 $/MT

Production – 4 percent globallyConsumption – 31 percent globallyPrice – 427 $/MT

Sources: Government Reports, UN Comtrade, USDA, Beroe Analysis

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