Your SlideShare is downloading. ×
  • Like
Corn presentation 29 july
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Now you can save presentations on your phone or tablet

Available for both IPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Corn presentation 29 july

  • 1,543 views
Published

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
1,543
On SlideShare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
58
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide
  • 07/29/10 20:14
  • Change picture to a vast corn field or ears of corn, put this picture on the ethanol slide, check/update figures accurately and source the data 07/29/10 20:14
  • Source the data 07/29/10 20:14
  • Put in a picture of some very crowded Chinese or Indian city reflecting growth 07/29/10 20:14
  • Need chart created from FAS world demand figures with format matching “Supply Uncertainty – US Inventory” slide’s chart 07/29/10 20:14
  • Check data accuracy, add source data info of “US Department of Energy and Houston Biofuels Consultants, LLC”, add picture from “Largest Grain” slide 07/29/10 20:14
  • Add source data from wherever we got this 07/29/10 20:14
  • Check data accuracy, add source data info, Google “Shanghai JC Intelligence, Hanover Li,” to confirm estimates, change picture 07/29/10 20:14
  • Check data accuracy, source it. Get average px/bbl of oil for the years mentioned from some official source. change picture.
  • Replace chart with crude oil price history from 1980, corn from 1980, mark data points on chart where china began importing energy, corn. 07/29/10 20:14
  • Change picture or add chart showing rising demand 07/29/10 20:14
  • Middle bullets are really one bullet; third bullet needs to be an indent to the second, but I do not know how. Change picture to some nastier looking corn or corn field if you can find one 07/29/10 20:14
  • Cite source 07/29/10 20:14
  • Cite source and date of source’s report 07/29/10 20:14
  • Add source data 07/29/10 20:14
  • 07/29/10 20:14
  • Need a chart that is more clear and yearly grids if possible. 07/29/10 20:14
  • Change picture; add bullets citing specific years of yield declines of 5% or more, how much yield has increased in past 20 years, how much demand has increased past 20 years, source data 07/29/10 20:14
  • Make chart bigger, add source data. This should reflect info in bullets on previous page. 07/29/10 20:14
  • Remove beans data, source the remaining data 07/29/10 20:14
  • Same as corn chart. Clean up if possible and make yearly increments if possible. 07/29/10 20:14
  • Replace with same table from latest data from usda site – no newedge estimates 07/29/10 20:14
  • Change picture to the one on the “knowing the commodity “ slide 07/29/10 20:14
  • Replace these bullets with ag allocations in other major ag indexes and etfs 07/29/10 20:14
  • Change picture to a staid trading room environment, advisors in suits being oh-so-smart for their clients 07/29/10 20:14
  • Picture of a crowded futures trading pit 07/29/10 20:14
  • Picture of a trading screen – preferable the yahoo site with our iiv; maybe change the last bullet based on what we can/cannot say. Check with Barb 07/29/10 20:14
  • Picture of NYSE ticker with CORN would be great here. Needs better formatting. 07/29/10 20:14
  • Change picture and page formatting so it looks better 07/29/10 20:14
  • Cite source as our latest prospectus. 07/29/10 20:14

Transcript

  • 1. NYSE Ticker: CORN
  • 2. Corn – Largest Grain
    • Largest of all U.S. Agricultural Commodities
    • Uses include: Animal Feed, Ethanol Production, Human Consumption, Polymer Production
    • 88 million US acres planted in 2010/11 crop year; 81 million harvestable at 163.5 bu/acre
    • 1 bushel of corn equals 56 pounds
    • U.S. demand: 28 million bushels/day in 2008/09
    • World demand: 84 million bushels/day in 2008/09
    • World demand (est.): 89.6 million bu/day in 2010/11
    07/29/10 20:14 Sources: National Agricultural Statistics Service Crop Production Summary Jan 12, 2009 USDA World Agricultural Supply and Demand Estimates July 9, 2010 US Foreign Agricultural Services Spectrumcommodities.com
  • 3. Corn – Everywhere In The World Economy
    • Primary global use: livestock feed.
    • Second largest global use: US ethanol production.
    • Human consumption: mainly sweeteners and direct use of corn kernel.
    • Increasing use as a polymer feedstock for production of plastic; Wal-Mart switched to corn-based plastic bags in 2007.
    • Of the 10,000 items in a typical grocery store, at least 2,500 items use corn in some form during production or processing.
    07/29/10 20:14 Sources: US Grains Council USDA Feed Grains Database: Yearbook Smithsonian.com Aug 2006 Ontario Corn Producers Assoc
  • 4. Corn – Demand Rising with Population & Prosperity
    • Rising world population is decreasing amount of arable land for crops, but also brings increased demand for corn and corn products.
    • As incomes in developing countries rise, consumers tend to diversify their diets – increasing the relative consumption of meat (protein), dairy products and processed foods – all of which increases corn demand.
    • Economic growth in developing countries is projected to average more than 5.6% annually during the period 2010-19
    07/29/10 20:14
  • 5. Corn – Global Demand Rising Steadily 07/29/10 20:14 Source: USDA.gov July 9, 2010 Global Corn Consumption 2006-2010 In Thousand metric Tons
  • 6. Corn – The Ethanol Story
    • Ethanol has permanently replaced MTBE as the primary oxygenate in the US gasoline pool.
    • The average ethanol content in the 137 billion gallon US gasoline pool is 8.9%
    • USDA projects 13 billion gallons of ethanol will be produced in 2010 from 4.5 billion bushels of corn.
    • 1 bushel of corn = 2.8 gallons of ethanol
    • In California, the average SUV uses about 1 bushel of corn in each tank of gasoline.
    07/29/10 20:14 Source: USDA.gov/oce/forum/2010 Houston Biofuels Consultants
  • 7. Corn – The Ethanol Story 07/29/10 20:14
  • 8. Corn – The China Factor
    • The Chinese population is projected to grow by 6.6 million people in 2010.
    • China became a net importer of corn in the 2009/10 crop year.
    • China could import up to 1.7 million metric tons of corn in the 2010/11 crop year.
    • According to some analysts, China could import up to 15 million metric tons of corn by 2014/15
    • 1 million metric tons = 39,368,000 bushels
    07/29/10 20:14 Sources: CIA Factbook USDA Foreign Agricultural Service Bloomberg Business Week: China Enters ‘New Era of Buying Corn July 26, 2010
  • 9. Corn, China & Energy – “déjà vu all over again”
    • In 2004, Chinese net oil imports rose sharply – 38%
    • From 2003 to 2004, Chinese net oil Imports rose 700,000 barrels per day
    • Impacted world oil supply and price
    • In 2008, Chinese net corn imports rose sharply - 400%
    • Proteins are becoming an increasingly larger part of the diet in China as incomes rise and urbanization continues
  • 10. Corn, China & Energy – “déjà vu all over again” 07/29/10 20:14 Waiting for data price of corn vs price of oil
  • 11. Supply Uncertainty – Inelastic Demand
    • For the period 2006 to 2010, the USDA estimates that 99% of all corn grown each year will be consumed, leaving virtually no excess inventory to meet worldwide demand.
    • The USDA estimate for the 2010/11 corn “carry-out” (excess inventory) in the U.S. is for only 37 days of supply.
    • Farmers must produce 100% of global demand every year just to maintain already low inventories.
    07/29/10 20:14 Source: USDA Foreign Agricultural Service USDA World Agricultural Demand and Supply Estimate
  • 12. Supply Uncertainty – Not Just Bible Stories
    • Floods, Drought, Disease, Pestilence all directly affect crop output every crop year.
    • Corn production can be more vulnerable than Sugar, Wheat or Soybeans
      • Corn production is concentrated in the Northern Hemisphere with only one crop cycle each calendar year.
    • Unexpected shortages can cause major price increases lasting one or more crop years.
    07/29/10 20:14 Sal – why are other products more vulnerable?
  • 13. Supply Uncertainty – Not Just Bible Stories 07/29/10 20:14
  • 14. Supply Uncertainty: Northern Hemisphere = Corn 07/29/10 20:14
  • 15. Supply Uncertainty: What A Difference a Month Makes... 07/29/10 20:14
  • 16. Supply Uncertainty – US Inventory 07/29/10 20:14
  • 17. Supply Uncertainty – US Inventory & Prices 07/29/10 20:14
  • 18. Monthly Corn Futures 07/29/10 20:14 What is the source?
  • 19. Crop History – Drought Happens 07/29/10 20:14 2002 Midwest Drought Source:National Corn Growers Assoc
  • 20. Yield: A Question of Weather
    • 1980: Drought
    • 1983: Hot Summer
    • 1988: Drought
    • 1993: Floods
    • 1996: Floods
    • 2002: Drought
    • Every Three to Five Years
    07/29/10 20:14 Source: ??
  • 21. 07/29/10 20:14 Source:??? US or global
  • 22. Wheat Monthly Returns 07/29/10 20:14 What is the source?
  • 23. 07/29/10 20:14 What is the source?
  • 24. Corn – Emerging Market and BRIC Play
    • Industrial Metals ETFs being used as proxy for autos and other consumer goods
    • Corn can be used as a proxy for the developing world - as income grows, diet diversification and protein consumption grows – often before other consumable goods.
    • Corn can be used as a proxy for arable land and water - both of which are issues in the developing world.
    07/29/10 20:14
  • 25. Asset Allocation and Ags
    • Oppenheimer Funds Commodity Strategy Total Return Fund – 10% in all Ags
    • Deutsche Bank Agriculture (DBA) – 12.5% in corn
    • Deutsche Bank Commodity (DBC) – 5.3% in corn
    • Rogers International Commodity Index (RICI) – 4.8% in corn
    • Rogers International Commodity Index Agriculture (RICIA) – 13.6% in corn
    • iPath DowJones-UBS Agriculture Subindex Total Return ETN (JJA) – 23.1% corn
    • iPath DowJones-UBS Grains Subindex Total Return ETN (JJG) – 35.9 % corn
    07/29/10 20:14
  • 26. CORN and How it Works
    • CORN is designed to provide investors with a vehicle that allows direct exposure to corn without having to open a futures account
    • CORN allows investors direct exposure to the world’s largest most important agricultural commodity in an NYSE stock.
    • The U.S. corn futures pit averages approximately $4 billion per day on the CME
    07/29/10 20:14 Source: CBOT Exchange ADV Monthly report published by CME group (Jan 2009 to May 2010)
  • 27. CORN and How it Works: Liquidity
    • The approximately $4 billion of corn futures traded every day in the U.S. corn pits dictate the liquidity of CORN - not the shares outstanding or the average daily volume.
    • Market makers will create more shares each day to accommodate any size/liquidity needs of investors based on the corn futures pits
    • Active commodity/agricultural traders can take advantage of CORN’s daily price volatility
    • CORN is designed to mirror the volatility of corn futures and is often more volatile than that of other commodity/agricultural exchange traded securities
    07/29/10 20:14
  • 28. CORN: Volatility 07/29/10 20:14 Source: Teucrium Corn Fund
  • 29. CORN and How it Works: Intraday Indicative Value (IIV)
    • SEC requires that all exchange traded products make available the IIV of the securities’ share price so that Investors have transparency, similar to that of professional market-makers
      • The IIV is calculated and updated every 15 seconds throughout the trading day based upon the value of the underlying holdings in a exchange traded product’s  portfolio.
      • The IIV is independently calculated and disseminated by the listing exchange - in the case of the CORN the IIV is calculated by the NYSE.
    • The IIV for Teucrium Corn Fun can be found at: http://finance.yahoo.com/^corn-iv
    07/29/10 20:14
  • 30. Teucrium Trading LLC – the Commodity Experts
    • Every commodity has important seasonal and structural differences - requires specialized skills and knowledge.
    • Teucrium’s principals are commodities experts with commodities industry experience.
    • Teucrium’s products are designed around the specific commodity: CORN.
    • Seasonality, Liquidity, Structural Trading Mechanisms and Patterns are well understood by the Teucrium team and incorporated into our products.
    07/29/10 20:14
  • 31. Teucrium Trading LLC - Designing Product Specific Benchmarks
    • CORN has been specifically designed to mitigate contango and backwardation issues versus other commodity exchange traded securities
    • CORN’s Benchmark is composed of three different futures contracts, reducing turnover and minimizing negative effects of “rolling.”
    • Unlike other commodity exchange traded products and indices - CORN holds no spot month futures.
    • CORN uses December as the “Anchor” month in its Benchmark.
    • CORN provides investors with an investment tool allowing precise allocation to corn, the largest U.S. agricultural commodity, in their portfolios.
    • CORN allows investors to hedge their corn exposure in other mixed-commodity holdings by increasing or decreasing their amount of corn exposure.
    07/29/10 20:14
  • 32. CORN Tracking vs Benchmark After 1 Month
    • GRAPH
    • Can we produce? Does kelly have this?
    07/29/10 20:14
  • 33. Tracking vs Spot Corn 07/29/10 20:14 Source???
  • 34. Tracking vs Corn Curve – Providing Exposure to the Underlying Commodity not just Spot 07/29/10 20:14 From prospectus?
  • 35. Seasonality/Liquidity/Forward Curve/OTC 07/29/10 20:14 Do we need?
  • 36. Certainty of Supply in Energies/Metals
    • Quantity of ore is fairly certain
    • Mine production/output - a known quantity each
    • quarter.
    • Developing newly found oil deposits is an expensive and lengthy process – allows investors time to digest the news.
    • There is large stored supply of metals and energies making them less volatile then Ags.
    07/29/10 20:14 Source:geology.com
  • 37. CORN Volatility vs Other AG ETFS
    • CORN is designed to mirror the volatility of corn futures.
    • Other AG ETFS hold a basket of commodities and thus are not as volatile as CORN
    • For example on June 30 CORN gained 8.17% on news that 1 million fewer acres had been platted then expected, DBA moved only 1.6% as corn is only 6.62% of the fund.
    07/29/10 20:14 Do we need?
  • 38. 07/29/10 20:14