Helsinki, Finland

June 5-7, 2011

0 Past Performance Is Not Necessarily Indicative Of Future Results.

CAPITAL MARKETS IN THE

POST-CRISIS ENVIRONMENT

Part V Michael Drury

Chief Economist, McVean Trading & Investments, LLC

Sponsored by Global Interdependence Center and

Bank of Finland

China’s Share of World Commodity Consumption

Commodity China % of World

Cement 53.2%

Iron Ore 47.7%

Coal 46.9%

Pigs 46.4%

Steel 45.4%

Lead 44.6%

Zinc 41.3%

Aluminum 40.6%

Copper 38.9%

Eggs 37.2%

Nickel 36.3%

Rice 28.1%

Soybeans 24.6%

Wheat 16.6%

Chickens 15.6%

PPP GDP 13.6%

Oil 10.3%

Cattle 9.5%

GDP 9.4%

1 Past Performance Is Not Necessarily Indicative Of Future Results. Source: Barclays 2010

WTI vs Brent Crude Oil

2 Past Performance Is Not Necessarily Indicative Of Future Results.

30

50

70

90

110

130

150

Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

WTI BrentApr-11 Source: Bloomberg

Gasoline

3 Past Performance Is Not Necessarily Indicative Of Future Results.

0

50

100

150

200

250

300

350

Jan-89 Jan-93 Jan-97 Jan-01 Jan-05 Jan-09

Apr-11 Source: Bloomberg

Corn

4 Past Performance Is Not Necessarily Indicative Of Future Results.

100

200

300

400

500

600

700

800

Jan-89 Jan-93 Jan-97 Jan-01 Jan-05 Jan-09

Apr-11 Source: Bloomberg

US CORN ENDING STOCKS

5 Past Performance Is Not Necessarily Indicative Of Future Results.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

MIL

BU

PIPELINE USDA ESTIMATESource: McVean Trading Calculation

Gasoline (Wholesale) vs Corn

6 Past Performance Is Not Necessarily Indicative Of Future Results.

100

200

300

400

500

600

700

800

0

50

100

150

200

250

300

350

Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11

Gasoline CornApr-11

Source: Bloomberg

Corn / Wheat

7 Past Performance Is Not Necessarily Indicative Of Future Results.

0.4

0.5

0.6

0.7

0.8

0.9

1

Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11

Apr-11 Source: Bloomberg

Corn / Soybeans

8 Past Performance Is Not Necessarily Indicative Of Future Results.

0.25

0.3

0.35

0.4

0.45

0.5

0.55

0.6

0.65

Jan-89 Jan-91 Jan-93 Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11

Apr-11 Source: Bloomberg

Ethanol Production as a percent of US CORN CROP

9 Past Performance Is Not Necessarily Indicative Of Future Results.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Source: USDA

US CORN DOMESTIC DISAPPEARANCE

10 Past Performance Is Not Necessarily Indicative Of Future Results.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

MIL

BU

ETHANOL OTHERSource: USDA

US PLANTED ACRES

11 Past Performance Is Not Necessarily Indicative Of Future Results.

-

50

100

150

200

250

300

350

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MIL

AC

RE

S

CORN SOYBEANS OTHER CROPSSource: USDA

E10 Penetration – 2010

% of state gasoline blended with ethanol

12 Past Performance Is Not Necessarily Indicative Of Future Results.

Ethanol Margins, Calculated From Board Values

Variable Costs are Covered at 20-40 Cents

13 Past Performance Is Not Necessarily Indicative Of Future Results.

40

42

44

46

48

50

52

54

56

58

K11 N11 U11 Z11 H12 K12 N12

CE

NT

S/G

AL

CONTRACT MONTH Source: McVean Trading Calculation

Ethanol, Gasoline and Crude Oil Board Curves

14 Past Performance Is Not Necessarily Indicative Of Future Results.

2.40

2.60

2.80

3.00

3.20

3.40

K11 N11 U11 Z11 H12 K12 N12

$/G

AL

CONTRACT MONTH

ETHANOL GASOLINE CRUDE OILSource: CME

Global Stocks-To-Use Ratio

15 Past Performance Is Not Necessarily Indicative Of Future Results.

0.10

0.15

0.20

0.25

0.30

WHEAT CORN SOYBEANSSource: USDA

World Corn Stocks

16 Past Performance Is Not Necessarily Indicative Of Future Results.

0

50

100

150

200

250

MM

T

USA CHINA OTHER COUNTRIESSource: USDA

Chinese Corn Stocks

17 Past Performance Is Not Necessarily Indicative Of Future Results.

0

20

40

60

80

100

120

140

MM

T

Source: USDA

Chinese Soybeans Imports

18 Past Performance Is Not Necessarily Indicative Of Future Results.

0

10

20

30

40

50

60

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12

MM

T

Source: USDA

Chinese Spot Cash Grain Prices

19 Past Performance Is Not Necessarily Indicative Of Future Results.

100

150

200

250

300

350

10/2

6/0

1

2/2

6/0

2

6/2

6/0

2

10/2

6/0

2

2/2

6/0

3

6/2

6/0

3

10/2

6/0

3

2/2

6/0

4

6/2

6/0

4

10/2

6/0

4

2/2

6/0

5

6/2

6/0

5

10/2

6/0

5

2/2

6/0

6

6/2

6/0

6

10/2

6/0

6

2/2

6/0

7

6/2

6/0

7

10/2

6/0

7

2/2

6/0

8

6/2

6/0

8

10/2

6/0

8

2/2

6/0

9

6/2

6/0

9

10/2

6/0

9

2/2

6/1

0

6/2

6/1

0

10/2

6/1

0

2/2

6/1

1

US

$/M

T

WHEAT--HENAN INDICA RICE--HUNAN CORN--JILINSource: McVean Private Sources

CORN BALANCE SHEET

ALT #1 ALT #2

06/07 07/08 08/09 09/10 10/11 11/12 11/12 11/12

Planted Acres (mil.) 78.3 93.5 86.0 86.4 88.2 93.2 93.2 93.2

Harvested Acres (mil.) 70.6 86.5 78.6 79.5 81.4 85.5 83.9 85.7

% Harvested 90% 93% 91% 92% 92% 92% 90% 92%

Yield (Bu / acre) 149.1 150.7 153.9 164.7 152.8 161.5 154.2 151.6

Production 10.526 13.036 12.097 13.094 12.438 13.808 12.938 13.001

Ethanol use 2.119 3.049 3.709 4.568 4.975 5.075 5.075 5.075

Ethanol as % of crop 20% 23% 31% 35% 40% 37% 39% 39%

Non-Ethanol production 8.407 9.987 8.388 8.526 7.463 8.733 7.863 7.926

Ending stocks 1.967 1.304 1.624 1.673 1.708 0.696 0.696 0.696

Stocks as % of total production 19% 10% 13% 13% 14% 5%

Non-ethanol supply 10.374 11.291 10.012 10.199 9.171 9.429 8.559 8.622

Non-ethanol use 9.070 9.667 8.339 8.491 8.475 8.575 8.575 8.575

Ending Stocks 1.304 1.624 1.673 1.708 0.696 0.854 -0.016 0.047

20 Past Performance Is Not Necessarily Indicative Of Future Results.

Source: McVean Trading , USDA

Minnesota Spring Wheat Price

21 Past Performance Is Not Necessarily Indicative Of Future Results.

2

4

6

8

10

12

14

16

18

20

Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11

Apr-11

22

U.S. Domestic Meat Availability of Beef

(Boneless Equivalent)

Past Performance Is Not Necessarily Indicative Of Future Results.

8300

8500

8700

8900

9100

9300

9500

9700

990019

98 JA

N-J

UN

1998

JUL-

DEC

1999

JAN

-JU

N

1999

JUL-

DEC

2000

JAN

-JU

N

2000

JUL-

DEC

2001

JAN

-JU

N

2001

JUL-

DEC

2002

JAN

-JU

N

2002

JUL-

DEC

2003

JAN

-JU

N

2003

JUL-

DEC

2004

JAN

-JU

N

2004

JUL-

DEC

2005

JAN

-JU

N

2005

JUL-

DEC

2006

JAN

-JU

N

2006

JUL-

DEC

2007

JAN

-JU

N

2007

JUL-

DEC

2008

JAN

-JU

N

2008

JUL-

DEC

2009

JAN

-JU

N

2009

JUL-

DEC

2010

JAN

-JU

N

2010

JUL-

DEC

2011

JAN

-JU

N

2011

JUL-

DEC

(Mill

ion

Poun

ds)

U.S. Domestic Beef Availibility Boneless Equivalent U.S. Domestic Beef Availibility Boneless Equivalent Estimate

3% Increase since 1989

-3% -8%

Source: USDA

Monthly Kansas Slaughter Steer Price

23 Past Performance Is Not Necessarily Indicative Of Future Results.

$35.00

$45.00

$55.00

$65.00

$75.00

$85.00

$95.00

$105.00

$115.00

$125.00

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

($ p

er C

WT

.)

Through MarchSource: USDA

24

U.S. Domestic Meat Availability of Pork

(Boneless Equivalent)

Past Performance Is Not Necessarily Indicative Of Future Results.

8,500

9,000

9,500

10,000

10,500

11,000

11,500 19

89

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(Mill

ion

Poun

ds)

U.S. Domestic Pork Availibility Boneless Equivalent U.S. Domestic Pork Availibility Boneless Equivalent Estimate

Source: USDA

USDA Pork Cutout

25 Past Performance Is Not Necessarily Indicative Of Future Results. Source: USDA

26

U.S. Domestic Meat Availability of Broilers

(Boneless Equivalent)

Past Performance Is Not Necessarily Indicative Of Future Results.

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000 19

89

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(Mill

ion

Poun

ds)

U.S. Domestic RTC Broiler Availability Boneless Equivalent U.S. Domestic RTC Broiler Availability Boneless Equivalent Estimate

Source: USDA & McVean Estimate

27 Past Performance Is Not Necessarily Indicative Of Future Results. Source: USDA