Cme Group Inc. · NASDAQ:CME

Cme — LMC International — CME Group Second Annual APAC Agri Week 2022

18 slides from Cme's conference presentation, 2022

  1. Slide 1: Edible Oils, Oilseeds and Biofuels – Weather, Protectionism or a Green Revolution to Reign?

    Edible Oils, Oilseeds and Biofuels – Weather, Protectionism or a Green Revolution to Reign? Dr Julian Conway McGill CME Group - Second Annual APAC Agri Week

  2. Slide 2: (Many) commodity prices have appreciated strongly

    (Many) commodity prices have appreciated strongly Change in monthly average commodity prices since January 2021 The EU and US are Brent Crude Oil currently engaged in Soybean oil two “wars”: Wheat (US Gulf) 1. A proxy war against Palm oil Russia over the fate Maize of the Ukraine. Sugar 2. A war aga

  3. Slide 3: Prices are above their long run trends

    Prices are above their long run trends Annual palm oil prices and long run trend Annual soybean meal prices and long run trend 3,000 1,200 2,500 1,000 Real USD per tonne Real USD per tonne 2,000 800 1,500 600 1,000 400 500 200 0 0 1950 1960 1970 1980 1990 2000 2010 2020 1950 1960 1970 1980 1990 2000

  4. Slide 4: We need US investment in fracking to replace Russia

    We need US investment in fracking to replace Russia Crude oil price against number of rigs drilling for shale oil 1,600 160 1,400 140 1,200 120 No. of US shale oil rigs WTI, $ per barrel 1,000 100 800 80 600 60 400 40 200 20 0 0 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 Jan-21 No. of rigs for

  5. Slide 5: Instead, investment is flowing into renewable diesel

    Instead, investment is flowing into renewable diesel Renewable diesel capacity (plants with annual capacity of over 100,000 tonnes) v v Operating Expanding Under construction v Planned Discussed © 2022 LMC International. All rights reserved. CME Group - Second Annual APAC Agri Week 5

  6. Slide 6: Which will require large amounts of feedstocks

    Which will require large amounts of feedstocks Fatty Acid Methyl-Ester (FAME), Renewable Diesel (RD) and Sustainable Aviation Fuel demand, historical and forecast 160 140 120 Million tonnes 100 80 60 40 20 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 FAME RD SAF

  7. Slide 7: And will rely mostly on vegetable oils

    And will rely mostly on vegetable oils Global biodiesel and SAF feedstock use, 2021 Other Animal fat 14% 8% UCO 16% Rapeseed oil 10% Soy oil Palm oil 24% 28% © 2022 LMC International. All rights reserved. CME Group - Second Annual APAC Agri Week 7

  8. Slide 8: While vegetable oil output has slowed dramatically

    While vegetable oil output has slowed dramatically Global vegetable oil output against long run trend 250 200 millions of tonnes 150 100 50 0 1980 1990 2000 2010 2020 Trend in vegetable oil output Total vegetable oil output © 2022 LMC International. All rights reserved. CME Group - Second Annual APA

  9. Slide 9: While vegetable oil output has slowed dramatically

    While vegetable oil output has slowed dramatically Global vegetable oil output since 2010 against long run trend 240 220 millions of tonnes 200 180 160 140 120 100 2010 2012 2014 2016 2018 2020 2022 Trend in output since 1980 Total vegetable oil output since 2010 © 2022 LMC International. All rights

  10. Slide 10: The last decade has seen structurally lower growth

    The last decade has seen structurally lower growth Annual growth rate in supply by decade Annual growth rate in demand by decade 7% 7% 2.7% Compound annual growth in vegetable oil output 6% 6% Compound annual growth in vegetable oil 5% 5% 4% 0.1% 1.5% 4% 3.1% 0.0% 2.6% demand 3.5% 0.5% 3% 3% 1.9% 4.

  11. Slide 11: Unlike in 2010 – oil palm will not provide supplies

    Unlike in 2010 – oil palm will not provide supplies Malaysian seed sales against the CPO price Indonesian seed sales against the CPO price 120 1,200 300 1,200 100 1,000 250 1,000 US$/tonne of Crude Palm Oil (CPO) US$/tonne of Crude Palm Oil (CPO) 80 800 200 800 Millions of seeds Millions of seeds 60

  12. Slide 12: So we are relying on the soybean for its oil

    So we are relying on the soybean for its oil Share of soybean oil in total soybean crushing value since 2000 50% Oil share of CBoT oil + meal value 45% 40% 35% 30% 25% 2000 2003 2006 2009 2012 2015 2018 2021 © 2022 LMC International. All rights reserved. CME Group - Second Annual APAC Agri Week 12

  13. Slide 13: Until recently crushing has been disappointing

    Until recently crushinghas been disappointing Year on year change in leading vegetable oil output 15% 10% 5% Year on year change in output 0% -5% -10% -15% -20% -25% -30% Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Soybean Rapeseed Palm Combined oils © 2022 LMC International. All rights

  14. Slide 14: Indonesia, is now desperate to export palm oil

    Indonesia, is now desperate to export palm oil Indonesian CPO price in rupiah/kg against USD Indonesian and Malaysian local CPO price in exchange rate US$/tonne 2,000 20,000 15,200 1,800 Indonesian CPO price (rupiah per kg) 18,000 15,000 1,600 Rupiah to USD exchange rate 1,400 16,000 14,800 1,200 US

  15. Slide 15: Which means palm oil is competitive as a fuel

    Which means palm oil is competitive as a fuel Local S.E. Asian CPO premia over London gasoil Local American soy oil premia over distillate fuels 800 300 CPO premium over London gasoil, $ per tonne SBO premium over gasoil/heating oil, $/tonne 600 200 400 100 200 0 0 -200 -100 -400 -200 -600 -300 -800

  16. Slide 16: Which is also driven by the conflict with Russia

    Which is also driven by the conflict with Russia Spreads (“cracks” ) between refined gasoil ad kerosene against crude oil 550 500 Spreads over crude oil, $ per tonne 450 400 350 300 250 200 150 100 50 0 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20 Jan-22 Gasoil over Brent Jet kerosene over WTI © 2022 L

  17. Slide 17: Short term softening, long term imbalance

    Short term softening, long term imbalance • Indonesia is now a distressed seller unable to store its growing palm production. The result has been to make palm competitive as a fuel, but discretionary biofuel usage alone is insufficient to reduce the stocks. The volume of exports from Indonesia now w

  18. Slide 18: Other publications

    Oxford Other publications LMC International Ltd 4th Floor, Clarendon House 52 Cornmarket Street Oxford OX1 3HJ UK Tel: +44 1865 791737 Email: info@lmc.co.uk New York LMC International Ltd 1350 Avenue of the Americas Floor 2 New York, NY 10019 USA Tel: +1 212 586-2427 Email: info@lmc-ny.com Kuala Lum

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