NYSE Ticker: CORN
Corn – Largest Grain  <ul><li>Largest of all U.S. Agricultural Commodities </li></ul><ul><li>Uses include: Animal Feed, Et...
Corn  –  Everywhere In The World Economy <ul><li>Primary global use: livestock feed. </li></ul><ul><li>Second largest glob...
Corn – Demand Rising with Population & Prosperity <ul><li>Rising world population is decreasing amount of arable land for ...
Corn – Global Demand Rising Steadily 07/29/10   20:14 Source: USDA.gov July 9, 2010 Global Corn Consumption 2006-2010 In T...
Corn  –  The Ethanol Story <ul><li>Ethanol has permanently replaced MTBE as the primary oxygenate in the US gasoline pool....
Corn – The Ethanol Story 07/29/10   20:14
Corn  –  The China Factor <ul><li>The Chinese population is projected to grow by 6.6 million people in 2010. </li></ul><ul...
Corn, China & Energy – “déjà vu all over again” <ul><li>In 2004, Chinese net oil imports rose sharply – 38%  </li></ul><ul...
Corn, China & Energy – “déjà vu all over again” 07/29/10   20:14 Waiting for data price of corn vs price of oil
Supply Uncertainty – Inelastic Demand <ul><li>For the period 2006 to 2010, the USDA estimates that 99% of all corn grown e...
Supply Uncertainty – Not Just Bible Stories <ul><li>Floods, Drought, Disease, Pestilence all directly affect crop output e...
Supply Uncertainty – Not Just Bible Stories 07/29/10   20:14
Supply Uncertainty: Northern Hemisphere = Corn 07/29/10   20:14
Supply Uncertainty: What A Difference a Month Makes... 07/29/10   20:14
Supply Uncertainty – US Inventory 07/29/10   20:14
Supply Uncertainty – US Inventory & Prices 07/29/10   20:14
Monthly Corn Futures 07/29/10   20:14 What is the source?
Crop History – Drought Happens 07/29/10   20:14 2002 Midwest Drought Source:National Corn Growers Assoc
Yield: A Question of Weather <ul><li>1980: Drought </li></ul><ul><li>1983: Hot Summer </li></ul><ul><li>1988: Drought </li...
07/29/10   20:14 Source:??? US or global
Wheat Monthly Returns 07/29/10   20:14 What is the source?
07/29/10   20:14 What is the source?
Corn – Emerging Market and BRIC Play <ul><li>Industrial Metals ETFs being used as proxy for autos and other consumer goods...
Asset Allocation and Ags <ul><li>Oppenheimer Funds Commodity Strategy Total Return Fund – 10% in all Ags </li></ul><ul><li...
CORN and How it Works <ul><li>CORN is designed to provide investors with a vehicle that allows direct exposure to corn wit...
CORN and How it Works: Liquidity <ul><li>The approximately $4 billion of corn futures traded every day in the U.S. corn pi...
CORN: Volatility 07/29/10   20:14 Source: Teucrium Corn Fund
CORN and How it Works:  Intraday Indicative Value (IIV) <ul><li>SEC requires that all exchange traded products make availa...
Teucrium Trading LLC – the Commodity Experts <ul><li>Every commodity has important seasonal and structural differences -  ...
Teucrium Trading LLC - Designing Product Specific Benchmarks <ul><li>CORN has been specifically designed to mitigate conta...
CORN Tracking vs Benchmark After 1 Month <ul><li>GRAPH </li></ul><ul><li>Can we produce?  Does kelly have this? </li></ul>...
Tracking vs Spot Corn 07/29/10   20:14 Source???
Tracking vs Corn Curve – Providing Exposure to the Underlying Commodity not just Spot 07/29/10   20:14 From prospectus?
Seasonality/Liquidity/Forward Curve/OTC 07/29/10   20:14 Do we need?
Certainty of Supply in Energies/Metals <ul><li>Quantity of ore is fairly certain </li></ul><ul><li>Mine production/output ...
CORN Volatility vs Other AG ETFS <ul><li>CORN is designed to mirror the volatility of corn futures. </li></ul><ul><li>Othe...
07/29/10   20:14
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Corn presentation 29 july

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  • 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
  • Corn presentation 29 july

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

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