1© Copyright 2010 Weather Trends International

Global Agricultural Weather Impacts – 2010 Review

January 2011

Michael R. Ferrari, Weather Trends InternationalAmerican Meteorological Society Annual Meeting

Seattle, WA

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• Global Agricultural Weather Highlights – Major Stories from 2010

• MacroEcon Background• Mid Year Impacts →Russia/Argentina, Wheat• Late Year Impacts → Brazil/India, Sugar• 2010/11 Impacts → Australia, Sugar, Grains• Global Commodity Market Impacts• What to Expect in 2011

Topics for Discussion

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Global Macro Background

- FAO food Price Index- US Currency Fluctuations- Global Stocks (& Stock-to-Use)

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Sugar*source: FAO

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*source: FAO

Weaker USD provides Price Support

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*source: FAO

Weaker USD provides Price Support

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Global Macro Background

FOOD PRICE INDEX US DOLLAR STOCKS-TO-USE

RATIOS

Cyclical Behavior: Another Peak in 2011, or ‘SuperCycle to Continue??

Commodities more sensitive to daily fluctuations: translates in RawMat prices

Grains: Lowest Reserves in ~ 30 years

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Start of 2011: Very Different Scenario vs. Last Year

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Weather Served as the Trigger; Embargo Escalated Price Support

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*source: WTI White Paper Library

Dryness in Centre-South BR & Lackof rebound in IN kept market in Deficit

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→Oct/Nov 2009 Oct/Nov 2010

Queensland Rain will add tosupport in 2011

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*source: WTI White Paper Library

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Another Interesting Year in Store:

Energy: Following a lull, Crude Oil prices high once again with many analysts calling for $100+ oil by 2Q11. This, along with $USD movements will serve as the steering currents in the commodity spectrum for the start of the year. *Note: despite cold eastern US, NatGas still trading at a discount to oil.

Global S&D: Increasing global demand for grains & oilseeds from both the food and fuel sectors looks to remain constant (once again) over the next 6-12 months. Longer term support in the biofuel sector is more speculative but currently strong, so upside pressure on supplies and prices for food raw materials should remain. Wildcard: Cotton.

La Nina Transition: The next few months will be very important in assessing 2011 production and yields for major commercial crops. When USDA releases prospective acreage reports (Feb/Mar), this will be the first milestone in significantly adjusting supply expectations.

2011 outlook – Important fundamentals to monitor

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For any questions, please contact:

Michael Ferrari, PhDVice President, Applied Technology and Commodity Research

Weather Trends International, USATel: 610 807 3582Mobile: 484 542 0111 Email: mferrari@wxtrends.com