February 23, 2015 Judith Ganes

President J. Ganes Consulting, LLC

Softs Fast Facts Webinar

2

Coffee: Delayed Drought Impact

Sugar: Oversupply, Weak Physical Interest

Cotton: Market Looking Towards Plantings

Cocoa: Grind Margins Weigh on Consumption

FCOJ: Retail Prices Ensuring Demand Decline

3

Full Impact of Brazilian Drought on Coffee Output to be Felt in 2015-2016?

Cents Per Pound

Source: Futuresource

130

150

170

190

210

230

250

Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15

4

2013-14 was Likely to Be Last in String of Consecutive Surpluses for Coffee Market

Million 60-kg Bags

Source: USDA, J. Ganes Consulting

100

110

120

130

140

150

160

99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16

Output Demand

5

Huge Water Problems in Brazil Robusta Zone Compound Prior Problems

5

6

Both Arabica and Robusta Output Now Impacted but the Size Remains Uncertain

Million 60-kg Bags

Source: USDA, J. Ganes Consulting

24.4 23.6 26.0 27.6 33.0 34.7

39.5

0

10

20

30

40

50

60

70

00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

JGC ForecastRobustaArabica

7

Speculators Haven’t Yet Fully Abandoned Hopes for Another Rally

Thousand Contracts and Cents per Pound

Source: CFTC, Futuresource

80

130

180

230

280

330

-30

-20

-10

0

10

20

30

40

50

60

70

Feb-07 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Feb-13 Feb-14 Feb-15

8

Brazil, Vietnam Exports Making Up for Weak Indonesian Shipments

Million 60-kg Bags (Oct – Nov)

Source: ICO

0

1

2

3

4

5

6

7

94/95 98/99 02/03 06/07 10/11 14/15

BrazilVietnamColombiaIndonesia

9

Muted Physical Interest Preventing Sustained Sugar Rally

Cents Per Pound

Source: Futuresource

14

15

16

17

18

19

20

21

Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15

10

String of Sugar Surpluses End in Sight

Million Tons

Source: USDA, J. Ganes Consulting

120

130

140

150

160

170

180

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Output Demand

11

Weaker Real Helped Offset Low Prices, Kept Brazilian Exports From Major Decline

Million Tons

Source: USDA, J. Ganes Consulting

0

5

10

15

20

25

30

35

40

45

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Output Exports

12

With Brazilian Blending Up to E27 from E25, More Cane Being Used for Fuel

Share of Brazilian Cane Used for Ethanol

44%

46%

48%

50%

52%

54%

56%

58%

60%

62%

08/09 09/10 10/11 11/12 12/13 13/14 14/15

Source: UNICA

13

U.S. Cotton Exports Up but Focus Remains on Planting Intentions

Cents Per Pound

Source: Futuresource

50

55

60

65

70

75

80

85

90

Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15

14

Global Cotton Market Expanded the Surplus in 2014/2015 but Should Shrink Again

Million Running Bales and Stocks / Use

Source: USDA, J. Ganes Consulting

30%

40%

50%

60%

70%

80%

90%

40

50

60

70

80

90

100

110

120

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Ending StocksStocks / Use

15

The Majority of Global Stocks are Still in China

Million Running Bales

Source: USDA, J. Ganes Consulting

0%

10%

20%

30%

40%

50%

60%

70%

10

20

30

40

50

60

70

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Ending Stocks

Chinese Share of GlobalStocks

16

China Still Importing to Fill Cotton Deficit

Million Running Bales

Source: USDA, J. Ganes Consulting

10

15

20

25

30

35

40

45

50

55

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Use Output

17

China, Vietnam Helping U.S. Cotton Export Sales

Million Running Bales

Source: USDA, J. Ganes Consulting

0

2

4

6

8

10

12

14

16

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

ExportsSales

18

Fueled Entirely by Imports, Vietnamese Cotton Demand Seeing Rapid Growth

Million Running Bales

Source: USDA, J. Ganes Consulting

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Imports Use

19

W. African Weather Concerns Behind Most Recent Cocoa Rally From 12 Month Low Point

Dollars per Ton

Source: Futuresource

2,600

2,700

2,800

2,900

3,000

3,100

3,200

3,300

3,400

Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15

20

As El Nino, Ebola Fears Prove Unfounded, Focus Turns to Weakening Cocoa Demand

Million Tons

Source: USDA, J. Ganes Consulting

3

3

4

4

5

5

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Output Demand

21

Sharp Fall in Butter Prices Hurting Grind Margins

Butter – Powder to Bean Price Ratios

Source: Milling & Baking News

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14

ButterPowder

22

Margins Falling Below Level That Motivates Cocoa Grind Expansion

Combined Butter – Powder to Bean Price Ratio

Source: Milling & Baking News

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14

23

Weak Butter / Powder Pricing Ratio Catching Up, Grind Volumes Fall in Q4

Million Tons

Source: NCA, ECA, CAA* aata available beginning in 2011

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2008 2009 2010 2011 2012 2013 2014

AsiaNorth AmericaEurope

24

OJ Market Suffering From Cooperative Weather, Persistent Demand Weakness

Cents per Pound Solids

Source: Futuresource

120

130

140

150

160

170

180

Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15

25

OJ Crops Dented by Disease, Not Enough to Overcome Weak Demand

Million 90-lb Boxes

Source: USDA, J. Ganes Consulting

0

50

100

150

200

250

300

350

400

450

98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15

Sao Paulo Florida

26

OJ Retail Price Rises Ensure Continued Decline in Volumes

Million Gallons, US Dollars per Gallon

Source: Nielsen Scantrack

$4.00

$4.50

$5.00

$5.50

$6.00

$6.50

$7.00

30

35

40

45

50

55

60

65

70

75

80

Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14

www.jganesconsulting.com to sign-up for softs research

reports and services.

http://www.jganesconsulting.com/

Softs Fast Facts WebinarSlide Number 2Full Impact of Brazilian Drought on Coffee Output to be Felt in 2015-2016? 2013-14 was Likely to Be Last in String of Consecutive Surpluses for Coffee MarketHuge Water Problems in Brazil Robusta Zone Compound Prior ProblemsBoth Arabica and Robusta Output Now Impacted but the Size Remains UncertainSpeculators Haven’t Yet Fully Abandoned Hopes for Another RallyBrazil, Vietnam Exports Making Up for� Weak Indonesian ShipmentsMuted Physical Interest Preventing Sustained Sugar RallyString of Sugar Surpluses End in Sight�Weaker Real Helped Offset Low Prices, Kept Brazilian Exports From Major DeclineWith Brazilian Blending Up to E27 from E25, More Cane Being Used for FuelU.S. Cotton Exports Up but Focus Remains on Planting IntentionsGlobal Cotton Market Expanded the Surplus in 2014/2015 but Should Shrink AgainThe Majority of Global Stocks are Still in ChinaChina Still Importing to Fill Cotton DeficitChina, Vietnam Helping U.S. Cotton Export SalesFueled Entirely by Imports, Vietnamese Cotton Demand Seeing Rapid GrowthW. African Weather Concerns Behind Most Recent Cocoa Rally From 12 Month Low PointAs El Nino, Ebola Fears Prove Unfounded, Focus Turns to Weakening Cocoa DemandSharp Fall in Butter Prices Hurting Grind MarginsMargins Falling Below Level That Motivates Cocoa Grind ExpansionWeak Butter / Powder Pricing Ratio Catching Up, Grind Volumes Fall in Q4OJ Market Suffering From Cooperative Weather, Persistent Demand WeaknessOJ Crops Dented by Disease, Not Enough to Overcome Weak DemandOJ Retail Price Rises Ensure Continued Decline in Volumeswww.jganesconsulting.com� to sign-up for softs research reports and services.