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

FX

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)


FX

Mega Trend

Producer / Consumer effect

US$ / CRB


US$ Index – 40 years


FX

Mega Trend


US$ / CRB


US$ / Brazil Real

www.vicorus.ch Jonathan Grange 18 June 2015

FX

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

India

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

600

700

800

900

1,000

GLOBAL CORN & WHEAT USE

Wheat Corn

'000

MT

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

50

100

150

200

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

17

22

27

32

37

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

10

15

20

25

30

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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