Corn Sweetener Prices 2014: Sweet or Sour?

1. Corn Sweetener Prices 2014: Sweet or Sour? October 17, 2013

2. How to Participate Today 2. 1. • Open and close your Panel • View, Select, and Test your audio • Raise your hand • Submit text questions 3. 4.

3. Who We Are International Food Products is a manufacturer and distributor of quality ingredients and custom formulations for the food, beverage, and dairy industries. We are trusted ingredient advisors to our customers, providing commodity market expertise, product development, and technical support.

4. Today’s Presenters Stephen P. Nicholson Chief Economist, International Food Products Dr. Chad E. Hart Associate Professor of EconomicsCrop Markets Specialist, Iowa State University

5. 2013/14 Crop Market Outlook Oct. 13, 2013 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911

6. U.S. Corn Supply and Use Source: USDA-WAOB

7. Objective Yield Data Source: USDA-NASS

8. Projected Corn Yields Top: 2013 Projected Yield Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS

9. Early Reports on Corn Yields Source: AgWeb.com

10. World Corn Production Source: USDA-WAOB

11. Corn Export Shifts Source: USDA-FAS

12. Corn Export Sales Source: USDA-FAS

13. Corn Grind for Ethanol

14. Source: DOE-EIA, Annual Energy Outlook

15. Current Corn Futures 4.54 4.40 4.04 Source: CME Group, 10/11/2013

16. New Crop Prices

17. Crop Acreage Source: USDA-NASS

18. Crop Shifts Source: USDA-NASS

19. Thoughts for 2014 and Beyond • Supply/demand concerns • A lot of production uncertainty for harvest time • Corn demand rebounding? • Acreage allocation for 2014: Where do the extra corn acres go? • Markets favoring soybeans in the short term and corn longer term

20. Thank you for your time!Any questions?My web site:http://www.econ.iastate.edu/~chart/Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/Ag Decision Maker:http://www.extension.iastate.edu/agdm/

21. 2014 Corn Sweeteners Prepared by Stephen P. Nicholson, Economist International Food Products

22. Daily December Corn Futures ($/bu.)

23. Weekly Corn Futures ($/bu.)

24. Comparison July ‘13 Futures (ZCN13) vs. July ‘14 Futures (ZCH14)

25. Corn Sweetener Highlights • 2014 corn sweetener negotiations have not begun. • Some early price discussions have been futile. • Not expecting negotiations to begin until after Nov. USDA reports. • 2013 business has been soft. • Some major corn wet millers have seen substantial declines in volume • While sugar prices are off their lows, cheap sugar is going to keep pressure on corn sweetener prices. • Future in Mexico? • Proposal to tax sugary beverages—aimed at soft drinks. • Future of U.S. HFCS exports to Mexico? • Corn futures prices are down significantly from year ago levels--$2.20-$2.50 per bu. • In 2014 basis values will be down from 2013, but will be supported by strong demand—ethanol industry and exports. • Net corns will also be down, as co-product prices are also declining. • Surprisingly, capacity utilization rates still remain historically high.

26. Projections for 2013 Corn Sweeteners Prices • There have been no “official” pricing announcements • Market talk is that there will be no price announcements until Nov. • 2014 Pricing Indications (versus 2013 contract prices) • Liquid corn sweeteners: down $3.00-$6.00 per CWT • Dextrose: down $3.00-$6.00 per CWT • Corn Syrup Solids: down $2.00-$4.00 per CWT • Maltodextrins: down $2.00-$4.00 per CWT • Crystalline Fructose: $4.00-$6.00 per CWT • PFP Corn Starch: $4.00-$6.00 per CWT • Individual pricing will depend largely on where your price was in 2013.

27. Questions Everyone will receive an email with a link to view a recorded version of today’s session within 24 hours.

28. Next Webinar Sugar Dive: Now Over? Thursday November 21, 2013 Sign up at: ifpc.com/webinar

29. Daily Market Report

30. Contact Information Jamie Moritz VP Sales & Marketing 800.227.8427 jmoritz@ifpc.com http://www.linkedin.com/company/international-food-products @IntlFood

31. Thank You!