COMMODITY PRODUCTS Moore Research Report. Seasonals Charts Strategies DAIRY

Transcription

1 COMMODITY PRODUCTS 8 Moore Research Report Seasonals Charts Strategies DAIRY

2 Welcome to the 8 Moore Historical Dairy Report This comprehensive report provides historical daily charts, cash and basis charts, and seasonal strategies to help you trade. CME Group offers the following Dairy futures and options contracts: Butter, Cash-settled Butter, Dry Whey, Class IV Milk, Class III Milk and Nonfat Dry Milk. In addition to the Moore Historical Report, CME Group offers the following free trading tools for Dairy futures and options: Free real-time price quotes on electronic Dairy futures and options complete with: Best bids and offers Daily trading activity Outright and spread markets Free one-page daily commentary on the fundamental drivers of the dairy markets For more information on CME Group Dairy products, visit or contact commodities@cmegroup.com. To begin trading Dairy futures and options on the CME Globex electronic trading platform, contact your broker directly.

3 Historical Dairy Report Table of Contents 8 Edition Page For Your Information Class III Milk Futures Basis & Cash Charts Preface CME Futures, Options & Spot Call Specifications How to Interpret Seasonal Charts Seasonal Section Index Seasonal s & Weekly Charts Seasonal & Spread Strategy Summary How to Interpret a Strategy Sheet Strategy Detail Tables How to Interpret Average Volatility & Bull/Bear Charts Volatility, Bull/Bear, Daily Section Index Historical Average Volatility Charts Bull/Bear Charts Historical Daily Futures Charts (Class III Milk) Basis & Cash Section Index Cheese/Milk Basis Averages & Charts Cash Market Seasonal s Cash Market Weekly Charts Cash Market Monthly Charts (Charts current through December 7.) NOTE: The CME Milk (Class III) contract replaced the BFP contract in January. The Moore Research Center, Inc. (MRCI), located on 73 secluded acres outside Eugene, Oregon, is sought for its futures market analysis, combining many years of intensive computerized study and the experience of real-time trading. Our hardware and software both are constantly upgraded, giving MRCI the speed and depth of capability to study price movement that we believe are state-of-the-art for the industry. Copyright Moore Research Center, Inc. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, facsimile, or any information storage and retrieval system, without written permission. Retransmission by fax or other means which results in the creation of an additional copy is unlawful.

4 Preface Knowledge is a foundation essential to making successful decisions. Does a prudent businessman market product/purchase raw material without first researching profit/cost potential? Does a successful futures trader/investor jump at a hot tip or a story in The Wall St. Journal? Or would one first seek some background some history? The purpose of this publication is to quantify price history both cash and futures in the dairy market, offer it from a variety of relevant perspectives, and present it in a format useful to those whose commerce is substantially affected by fluctuations in prices for dairy products. The business executive and investor alike are encouraged to examine the following pages thoroughly, for seasonality can be a primary component of price movement in dairy products. Seasonal s Nearly all markets real estate, grain, cash butter, stock index futures respond to various fundamental forces, many seasonal in nature. Such forces as weather, school calendars, and specific characteristics of futures contracts tend to recur and to influence, to one degree or another and in a more or less timely manner, certain markets every year. As any market responds to a series of these annually recurring factors, seasonal price patterns tend to evolve. Daily seasonal patterns are derived from and a composite of the historical daily price activity in the specific futures contract or cash market under consideration. The numerical index to the right of each seasonal pattern chart reflects the historical tendency for that market to reach its seasonal high () or low () at a given time. Weekly continuation charts, also contract-specific, are intended to illustrate historical relative value, turning points, and longer-term trends. Points on futures spread charts are plotted by subtracting the price of the secondnamed contract from that of the first. Windows of Opportunity From these seasonal patterns, one can derive a seasonal approach to both cash and futures markets that is designed to anticipate, enter, and capture recurrent price trends as they emerge and exit before they are realized. Within these patterns may exist certain windows of opportunity wherein well-defined seasonal tops, bottoms, and trends tend to appear. Moore Research Center, Inc. (MRCI) computer programs have analyzed trends that have recurred in the same direction during a similar period of time in at least 8% of all years studied. The underlying theory assumes that causal fundamental factors specific to that time period must have existed and may be influential again, thus making each strategy of such historical reliability valid for trading considerations. However, that past performance is not necessarily indicative of future results. Even though these are potential strategies only and not recommendations, there is no mystery to them. They are merely presentations of quantified historical fact. However, if knowledge is essential to decisionmaking, then historically reliable strategies would seem to offer a starting point from which to take a reasoned approach to the dairy market. Commercial users/producers, then, may find seasonal analysis vital to managing cost/profit risks. The consistency implied by seasonality and its more reliable strategies can afford, to the business strategist planning into the future, greater confidence in purchasing raw material and/or marketing product. Price movement affects management decisions. Those with the knowledge to anticipate price movement more accurately also have the capacity to make successful decisions more consistently. NOTE: The CME Milk (Class III) contract replaced the BFP contract in January. Preface 2 HISTORICAL DAIRY REPORT

5 CME Dairy Futures, Options and Spot Call Chicago Mercantile Exchange has offered a variety of cash-settled dairy futures products since At present, these products consist of Class III and Class IV Milk, Nonfat Dry Milk, and Dry Whey futures and options contracts. In 5, CME listed a cash-settled butter futures contract (, lbs) available for trade on Globex; in 7, CME made nearly all its cash-settled dairy futures and options contracts available for 23-hour trading on Globex. CME also trades a deliverable butter futures contract. In addition, CME provides the location for a spot call (cash) dairy market where Cheese, Butter, and Nonfat Dry Milk are traded. Cash/Spot Market The Spot, or Cash, market is used for immediate inventory adjustments. This is a cash market that allows buyers and sellers to better manage production schedules and bottom lines with immediate sales or purchases of the products listed. Price discovery in this market is also used in conjunction with dairy information published by various government agencies to provide traders, hedgers, and speculators with trading possibilities. butter, nonfat dry milk, and whey prices for the month. The formulas for Class III and Class IV are as follow: Class III Price = (Class III Skim Price x.965) + (Butterfat Price x 3.5) Class III Skim Price = (Protein Price x 3.1) + (Other Solids Price x 5.9) Protein Price = ((Cheese Price ) x 1.383) + ((((Cheese Price ) x 1.572) - Butterfat Price x.9) x 1.17) Other Solids Price = (Dry Whey Price ) x 1.3 Butterfat Price = (Butter Price -.12) x 1.2 Class IV Price = (Class IV Skim x.965) + (Butterfat Price x 3.5) Class IV Skim = Nonfat Solids Price x 9 Nonfat Solids Price = (Nonfat Price -.157) x.99 Butterfat Price = (Butter Price -.12) x 1.2 What do these formulas tell us about the pricing of Class III and Class IV milk? Price movements in butter, cheese, whey, and Class III Class IV nonfat dry milk have an impact on Cheese 9.7 n/a the final price. As a Whey 6. n/a general rule, a onecent change in dairy Butter Nonfat Dry Milk n/a 8.6 product prices has Contract Specifications: CME Spot Call Dairy Markets Cheese Butter Nonfat Dry Milk the following price impact on the class futures prices for milk. Trading Unit Contract Months Minimum Fluctuation Maximum Fluctuation Trading Hours Ticker Symbol Grade Dairy Futures and Options The futures are structured completely differently from the cash markets. All of CME s dairy futures products, except butter, are cash-settled to the National Agricultural Statistical Service (NASS) monthly price. Class prices are based on formulas calculated by United States Department of Agriculture (USDA). Federal Order Class Prices 4,-44, lbs 4,-44, lbs 42,-45, lbs Daily Daily Daily $.25/lb $.25/lb $.25/lb $.1/lb $.1/lb $.1/lb 1:45AM to between 1:47 and 11:1 AM Blocks: KB Barrels: RB Blocks: Grade A or better Barrels: Extra or better 11:5AM to between 11:7 and 11:21AM Grade AA Grade AA Formulation of the Federal Order Class prices are derived from weighted averages of USDA-surveyed cheese, 1:45AM to between 1:47 and 11:1AM Grade A: NM Extra Grade: NX Grade A and Extra Monthly government numbers used to settle the Class III and Class IV futures are released on the Friday before the 5th of the following month. If the 5th falls on Friday, data is then published on that Friday. Monthly data can be found on the USDA Web site or on a link at Examples of actual USDA monthly releases and last trading days for Class III and Class IV futures contracts are shown below. USDA Release Last Trading Day January 2/1/8 1/31/8 February 2/29/8 2/28/8 March 4/4/8 4/3/8 April 5/2/8 5/1/8 May 5/3/8 5/29/8 June 7/3/8 7/2/8 July 8/1/8 7/31/8 August 9/5/8 9/4/8 September 1/3/8 1/2/8 October 1/31/8 1/3/8 MOORE RESEARCH CENTER, INC. 3 Dairy Futures, Options and Spot Call

6 Class III Milk Futures Class III milk futures have been trading at CME since 1996 in various forms. CME has adapted its futures contracts over time to keep up with the ever-changing government price support program for milk. Cash settlement was originally based on the Minnesota-Wisconsin (MW) price, then the Basic Formula Price (BFP), and currently the Class III milk price. Class III milk is also known by the industry as cheese milk, the milk used to produce American cheese. Class IV Milk Futures Class IV milk futures began trading in to complement the USDA s component pricing system. Class IV milk is used to produce butter and nonfat dry milk. Contract Specifications: CME Class IV Milk Futures Futures Options on Futures Trading Unit, pounds Same as futures Dairy Contract Specifications Contract Specifications: CME Class III Milk Futures Futures Options on Futures Trading Unit, pounds Same as futures Contract Months 24 consecutive calendar months Same as futures Months Listed All All Minimum Fluctuation $.1 per cwt. $.1 per cwt., except Cab = $.5 Price Limits $.75 per cwt. None Options Exercise n/a On any day that the option is traded Strike Price Intervals Termination of Trading Trading Hours RTH Trading Hours Globex Position Limits: Expiring contract month n/a $.25 Business day prior to USDA Class III Milk Price announcement 9:5 a.m. to 1:1 pm (9:5 a.m. to 12:1 p.m. on last trading day) Trading extends from Monday at 9:5 a.m. Central Time (CT) through Friday at 1:3 p.m. with daily hourlong trading halts at 4: p.m. Ticker Symbols RTH / Globex DA / DC Same as futures 9:5 a.m. to 1:12 p.m. (9:5 a.m. to 12:1 p.m. on last trading day) same as Globex futures 15 contracts Aggregated with futures on an equivalent basis Calls: DA/DC Puts: DA/DC Contract Months 24 consecutive calendar months Same as futures Months Listed All All Minimum Fluctuation $.1 per cwt. $.1 per cwt., except Cab = $.5 Price Limits $.75 per cwt. None Options Exercise n/a On any day that the option is traded Strike Price Intervals Termination of Trading Trading Hours Trading Hours Globex Position Limits: Expiring contract month Ticker Symbol: RTH/Globex n/a $.25 Business day prior to USDA Class IV Milk Price announcement 9:5 a.m to 1:1 p.m (9:5 a.m. - 12:1 p.m. on last trading day) Trading extends from Monday at 9:5 a.m. Central Time (CT) through Friday at 1:3 p.m. with daily hourlong trading halts at 4: p.m. Same as futures 9:5 a.m. to 1:12 p.m. (9:5 a.m. - 12:1 p.m. on last trading day) same as Globex futures 15 contracts Aggregated with futures on an equivalent basis DK/GDK Calls: DK/GDK Puts: DK/GDK 4 HISTORICAL DAIRY REPORT

7 Nonfat Dry Milk Futures Merchandisers, producers, processors, and speculators can now engage in price discovery and effectively manage price risk in Nonfat Dry Milk, a by-product derived from manufacturing butter. This product can be stored, used in various food sources, and/or reconstituted into milk. Futures complement CME Group s overall dairy product complex, enabling users both to hedge and to trade milk against its major milk products. Contract Specifications: CME Nonfat Dry Milk Futures Futures Options on Futures Trading Unit 44, pounds Same as futures Grade AA or Extra Contract Months 24 months Same as futures Months Listed All Same as futures Minimum Fluctuation $.25 per pound $.25 per pound, except Cab = $.125 Price Limits $.25 per pound; expandable to $.5 if contract nearest to None expiration subject to daily price limit closes on the limit bid or offer Options Exercise n/a Any day option is traded Strike Price Intervals n/a $.2 Termination of Trading Trading Hours RTH Trading Hours Globex Position Limits: Expiring month 1st scale down Other contract months Ticker Symbol RTH / Globex Business day prior to USDA Nonfat Dry Milk Price announcement 9:5 a.m. to 1:1 p.m. (9:5 a.m. - 12:1 p.m. on last trading day) Trading extends from 9:5 am Monday (CT) through 1:3 pm Friday with daily hour-long trading halts at 4: pm during the last 5 days of trading 1, in any contract month NF / GNF Same as futures 9:5 a.m. to 1:12 p.m. (9:5 a.m. - 12:1 p.m. on last trading day) same as Globex futures Aggregated with futures on an equivalent basis Calls: NZ Puts: NZ Butter Futures Producers, consumers, merchandisers, and speculators can engage in price discovery and manage price risk for butter utilizing a physically delivered contract. Futures reflect cash market supply, demand, and cold-storage stocks. Contract Specifications: CME Butter Futures Futures (RTH) Options on Futures Trading Unit 4, pounds Same as futures Grade AA Contract Months 6 months Same as Futures Months Listed Mar, May, Jul, Same as futures Sep, Oct, Dec Minimum Fluctuation $.25 per pound $.25 per pound, Cab = $.125 Price Limits $.5 per pound; None expandable to $.1 if the contract nearest to expiration that is subject to daily price limit closes on the limit bid or offer Options Exercise n/a Any day option traded. Strike Price Intervals n/a $.2 Termination of Trading Trading Hours Position Limits: Expiring Contract month 1st scale down 2nd scale down Other contract months The eighth-to-last business day of the month 9:5 a.m. to 1:1 p.m. (9:5 a.m. - 12:1 p.m. on last trading day) 15 at the close of business on the first business day following the first Friday of the contract month 5 during the last 5 days of trading 1, all months combined or 9 in any contact month First Friday of the month 9:5 a.m. to 1:12 p.m. (9:5 a.m. - 12:1 p.m. on last trading day) Aggregated with futures on an equivalent basis Ticker Symbol DB Calls: DB Puts: DB Dairy Contract Specifications MOORE RESEARCH CENTER, INC. 5

8 Cash-settled Butter In September 7, CME Group launched options on Cash-Settled Butter futures. Contract size at, pounds is half the size of deliverable butter futures. Contract Specs: CME Cash-Settled Butter Futures (Globex Only) Trading Unit Contract Listing Minimum Fluctuation Price Limits Termination of Trading Trading Hours Futures, lbs Grade AA Butter 24 consecutive calendar months 1 point = $.25/lb = $5. $.5 per pound, expanded to $.1 after one-day limit move Business day preceding release date for USDA monthly price in the US for Butter Trading extends from Monday at 9:5 a.m. (CT) through Friday at 1:3 p.m. with daily hour-long trading halts at 4: p.m. Options same as futures same as futures same as futures n/a same as futures same as futures Options Exercise n/a Any day option traded Strike Price Intervals n/a $.2 per pound Ticker Symbol CB Puts/Calls: CB Dry Whey Futures Producers, consumers, merchandisers, and speculators can engage in price discovery and manage price risk for dry whey, which is a by-product from manufacturing cheese. Whey is the liquid that separates from milk in the process of cheese making. Dried whey, high in protein and low in fat, is used in a variety of foods such as crackers, breads, cereal, and commercial pastries. It is increasingly used in the popular energy and power bars as well as protein drinks and powders. It also has use as an animal feed. Contract Specs: CME Dry Whey Futures (Globex Only) Trading Unit Contract Listing Minimum Fluctuation Price Limits Termination of Trading Futures 44, pounds Extra Grade 24 consecutive calendar months 1 point = $.25/lb = $11. $.4 per pound, except no limit in spot month during last 5 trading days of month Business day preceding release date for USDA monthly price in the US for Butter Options same as futures same as futures same as futures, but also Cab $.125 = $5.5 n/a same as futures Trading Hours Trading extends from Monday at 9:5 a.m. same as futures (CT) through Friday at 1:3 p.m. with daily hour-long trading halts at 4: p.m. Options Exercise n/a Any day option traded Strike Price Intervals n/a $.2 per pound Ticker Symbol DY Puts/Calls: DY Dairy Contract Specifications 6 HISTORICAL DAIRY REPORT

9 MOORE RESEARCH CENTER, INC. 7 Personal Notes

10 Seasonal Chart Explanation ach chart consists of two aspects of a market s seasonal pattern the longest (up to 1 years) for which data Eexists (solid line) and its most recent 5-year (dotted line), December 7 contracts inclusive. Thus, any evolution in the pattern may be perceived, as well as trends, tops, and bottoms coincident to both. The numerical index to the right measures the greatest historical tendency for the market to make a seasonal high () or low () at a given time. Besides illustrating the more obvious seasonal tops, seasonal bottoms, and seasonal trends, these patterns also suggest certain cause/effect phenomena which may present secondary opportunities. For instance, do smaller but well-defined breaks/rallies typically precede certain events, such as the Super Bowl or expiration of a lead contract? If so, does there exist an implied opportunity? January Class III Milk(CME) Seasonal s(1999-7) 8 9 Year 6 4 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan How to Interpret Seasonal Charts How to Interpret Seasonal Average Charts utures markets are designed to enable those involved in the commerce of the underlying commodity to manage their Frisk of price fluctuation. Because commercial hedging is a purchase or sale in futures that temporarily substitutes for a similar transaction in the cash market, the relationship between cash and futures is of vital importance. Charts in the Basis section portray an averaged difference between a designated cash price and a designated futures contract price, commonly referred to as basis. Per industry standard, the daily futures closing price is subtracted from the underlying cash price to determine chart points and cash quotes of $1. over or $.5 under futures the fluctuation of cash around futures. Because futures prices are the reference against which cash quotes are made, futures prices are represented on the charts by the -line. [The chart itself consists of both a longer average (the solid line) and its most recent 5-year average (the dotted line).] From these charts, one may discern not only the degree to which basis typically widens/narrows at any given time of the year. 1 Year Cheddar Cheese Blocks - Jan Class III Milk(CME) 1 Year Average(98-7) Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 8 HISTORICAL DAIRY REPORT

11 Class III Milk Page SEASONAL PATTERNS & WEEKLY CONTINUATIONS Jan, Feb, Mar, Apr May, Jun, Jul, Aug Sep, Oct, Nov, Dec Jan vs: Feb, Mar, Apr, May Feb vs: Mar, Apr, May, Jun Mar vs: Apr, May, Jun, Jul Apr vs: May, Jun, Jul, Aug May vs: Jun, Jul, Aug, Sep Jun vs: Jul, Aug, Sep, Oct Jul vs: Aug, Sep, Oct, Nov Aug vs: Sep, Oct, Nov, Dec Sep vs: Oct, Nov, Dec, Jan Oct vs: Nov, Dec, Jan, Feb Nov vs: Dec, Jan, Feb, Mar Dec vs: Jan, Feb, Mar, Apr STRATEGIES Seasonal Trade & Spreads Strategy Summary Seasonal Strategy Detail Tables Class III Milk MOORE RESEARCH CENTER, INC. 9

12 January Class III Milk(CME) Seasonal s(1999-7) 8 9 Year 6 4 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan February Class III Milk(CME) Seasonal s(1999-7) 8 9 Year 6 4 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb March Class III Milk(CME) Seasonal s(1999-7) 8 9 Year 6 4 Class III Milk Seasonal s 9 Year Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar April Class III Milk(CME) Seasonal s(1999-7) Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr HISTORICAL DAIRY REPORT

13 Weekly Jan Class III Milk(CME) Weekly Feb Class III Milk(CME) Weekly Mar Class III Milk(CME) Weekly Apr Class III Milk(CME) Class III Milk Weeklies MOORE RESEARCH CENTER, INC. 11

14 May Class III Milk(CME) Seasonal s(1998-7) 8 1 Year 6 4 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June Class III Milk(CME) Seasonal s(1999-7) 8 9 Year 6 4 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun July Class III Milk(CME) Seasonal s(1999-7) 8 9 Year 6 4 Class III Milk Seasonal s 1 Year Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul August Class III Milk(CME) Seasonal s(1998-7) Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug HISTORICAL DAIRY REPORT

15 22. Weekly May Class III Milk(CME) Weekly Jun Class III Milk(CME) Weekly Jul Class III Milk(CME) Weekly Aug Class III Milk(CME) Class III Milk Weeklies MOORE RESEARCH CENTER, INC. 13

16 September Class III Milk(CME) Seasonal s(1998-7) 8 1 Year 6 4 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep October Class III Milk(CME) Seasonal s(1997-7) 8 11 Year 6 4 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct November Class III Milk(CME) Seasonal s(1997-7) 8 11 Year 6 4 Class III Milk Seasonal s 11 Year Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov December Class III Milk(CME) Seasonal s(1997-7) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec HISTORICAL DAIRY REPORT

17 22. Weekly Sep Class III Milk(CME) Weekly Oct Class III Milk(CME) Weekly Nov Class III Milk(CME) Weekly Dec Class III Milk(CME) Class III Milk Weeklies MOORE RESEARCH CENTER, INC. 15

18 Jan Class III Milk(CME) - Feb Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Jan Class III Milk(CME) - Mar Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Class III Milk Spread Seasonal s: January 1 Year 1 Year Jan Class III Milk(CME) - Apr Class III Milk(CME) 1 Year Seasonal(98-7) Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Jan Class III Milk(CME) - May Class III Milk(CME) 1 Year Seasonal(98-7) Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan HISTORICAL DAIRY REPORT

19 6. Weekly Jan Class III Milk(CME) - Feb Class III Milk(CME) Weekly Jan Class III Milk(CME) - Mar Class III Milk(CME) Weekly Jan Class III Milk(CME) - Apr Class III Milk(CME) Weekly Jan Class III Milk(CME) - May Class III Milk(CME) Class III Milk Spread Weeklies: January MOORE RESEARCH CENTER, INC. 17

20 Feb Class III Milk(CME) - Mar Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Feb Class III Milk(CME) - Apr Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Class III Milk Spread Seasonal s: February 1 Year 1 Year Feb Class III Milk(CME) - May Class III Milk(CME) 1 Year Seasonal(98-7) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Feb Class III Milk(CME) - Jun Class III Milk(CME) 1 Year Seasonal(98-7) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb HISTORICAL DAIRY REPORT

21 2. Weekly Feb Class III Milk(CME) - Mar Class III Milk(CME) Weekly Feb Class III Milk(CME) - Apr Class III Milk(CME) Weekly Feb Class III Milk(CME) - May Class III Milk(CME) Weekly Feb Class III Milk(CME) - Jun Class III Milk(CME) Class III Milk Spread Weeklies: February MOORE RESEARCH CENTER, INC. 19

22 Mar Class III Milk(CME) - Apr Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Mar Class III Milk(CME) - May Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Class III Milk Spread Seasonal s: March 1 Year 1 Year Mar Class III Milk(CME) - Jun Class III Milk(CME) 1 Year Seasonal(98-7) May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Mar Class III Milk(CME) - Jul Class III Milk(CME) 1 Year Seasonal(98-7) May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar HISTORICAL DAIRY REPORT

23 2. Weekly Mar Class III Milk(CME) - Apr Class III Milk(CME) Weekly Mar Class III Milk(CME) - May Class III Milk(CME) Weekly Mar Class III Milk(CME) - Jun Class III Milk(CME) Weekly Mar Class III Milk(CME) - Jul Class III Milk(CME) Class III Milk Spread Weeklies: March MOORE RESEARCH CENTER, INC. 21

24 Apr Class III Milk(CME) - May Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Apr Class III Milk(CME) - Jun Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Class III Milk Spread Seasonal s: April 1 Year 1 Year Apr Class III Milk(CME) - Jul Class III Milk(CME) 1 Year Seasonal(98-7) Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Apr Class III Milk(CME) - Aug Class III Milk(CME) 1 Year Seasonal(98-7) Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr HISTORICAL DAIRY REPORT

25 1.5 Weekly Apr Class III Milk(CME) - May Class III Milk(CME) Weekly Apr Class III Milk(CME) - Jun Class III Milk(CME) Weekly Apr Class III Milk(CME) - Jul Class III Milk(CME) Weekly Apr Class III Milk(CME) - Aug Class III Milk(CME) Class III Milk Spread Weeklies: April MOORE RESEARCH CENTER, INC. 23

26 May Class III Milk(CME) - Jun Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May May Class III Milk(CME) - Jul Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Class III Milk Spread Seasonal s: May 1 Year 1 Year May Class III Milk(CME) - Aug Class III Milk(CME) 1 Year Seasonal(98-7) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May May Class III Milk(CME) - Sep Class III Milk(CME) 1 Year Seasonal(98-7) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May HISTORICAL DAIRY REPORT

27 5. Weekly May Class III Milk(CME) - Jun Class III Milk(CME) Weekly May Class III Milk(CME) - Jul Class III Milk(CME) Weekly May Class III Milk(CME) - Aug Class III Milk(CME) Weekly May Class III Milk(CME) - Sep Class III Milk(CME) Class III Milk Spread Weeklies: May MOORE RESEARCH CENTER, INC. 25

28 Jun Class III Milk(CME) - Jul Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Class III Milk(CME) - Aug Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Class III Milk Spread Seasonal s: June 1 Year 1 Year Jun Class III Milk(CME) - Sep Class III Milk(CME) 1 Year Seasonal(98-7) Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jun Class III Milk(CME) - Oct Class III Milk(CME) 1 Year Seasonal(98-7) Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun HISTORICAL DAIRY REPORT

29 4. Weekly Jun Class III Milk(CME) - Jul Class III Milk(CME) Weekly Jun Class III Milk(CME) - Aug Class III Milk(CME) Weekly Jun Class III Milk(CME) - Sep Class III Milk(CME) Weekly Jun Class III Milk(CME) - Oct Class III Milk(CME) Class III Milk Spread Weeklies: June MOORE RESEARCH CENTER, INC. 27

30 Jul Class III Milk(CME) - Aug Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Jul Class III Milk(CME) - Sep Class III Milk(CME) 1 Year Seasonal(98-7) 8 1 Year 6 4 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Class III Milk Spread Seasonal s: July 1 Year 1 Year Jul Class III Milk(CME) - Oct Class III Milk(CME) 1 Year Seasonal(98-7) Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Jul Class III Milk(CME) - Nov Class III Milk(CME) 1 Year Seasonal(98-7) Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul HISTORICAL DAIRY REPORT

31 3. Weekly Jul Class III Milk(CME) - Aug Class III Milk(CME) Weekly Jul Class III Milk(CME) - Sep Class III Milk(CME) Weekly Jul Class III Milk(CME) - Oct Class III Milk(CME) Weekly Jul Class III Milk(CME) - Nov Class III Milk(CME) Class III Milk Spread Weeklies: July MOORE RESEARCH CENTER, INC. 29

32 Aug Class III Milk(CME) - Sep Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Aug Class III Milk(CME) - Oct Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Class III Milk Spread Seasonal s: August 11 Year 11 Year Aug Class III Milk(CME) - Nov Class III Milk(CME) 11 Year Seasonal(97-7) Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Aug Class III Milk(CME) - Dec Class III Milk(CME) 11 Year Seasonal(97-7) Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug HISTORICAL DAIRY REPORT

33 1.5 Weekly Aug Class III Milk(CME) - Sep Class III Milk(CME) Weekly Aug Class III Milk(CME) - Oct Class III Milk(CME) Weekly Aug Class III Milk(CME) - Nov Class III Milk(CME) Weekly Aug Class III Milk(CME) - Dec Class III Milk(CME) Class III Milk Spread Weeklies: August MOORE RESEARCH CENTER, INC. 31

34 Sep Class III Milk(CME) - Oct Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sep Class III Milk(CME) - Nov Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Class III Milk Spread Seasonal s: September 11 Year 11 Year Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sep Class III Milk(CME) - Dec Class III Milk(CME) 11 Year Seasonal(97-7) Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sep Class III Milk(CME) - Jan Class III Milk(CME) 11 Year Seasonal(97/98-7/8) Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep HISTORICAL DAIRY REPORT

35 3.5 Weekly Sep Class III Milk(CME) - Oct Class III Milk(CME) Weekly Sep Class III Milk(CME) - Nov Class III Milk(CME) Weekly Sep Class III Milk(CME) - Dec Class III Milk(CME) Weekly Sep Class III Milk(CME) - Jan Class III Milk(CME) Class III Milk Spread Weeklies: September MOORE RESEARCH CENTER, INC. 33

36 Oct Class III Milk(CME) - Nov Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Oct Class III Milk(CME) - Dec Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Class III Milk Spread Seasonal s: October 11 Year 11 Year Oct Class III Milk(CME) - Jan Class III Milk(CME) 11 Year Seasonal(97/98-7/8) Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Oct Class III Milk(CME) - Feb Class III Milk(CME) 11 Year Seasonal(97/98-7/8) Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct HISTORICAL DAIRY REPORT

37 Weekly Oct Class III Milk(CME) - Nov Class III Milk(CME) Weekly Oct Class III Milk(CME) - Dec Class III Milk(CME) Weekly Oct Class III Milk(CME) - Jan Class III Milk(CME) Weekly Oct Class III Milk(CME) - Feb Class III Milk(CME) Class III Milk Spread Weeklies: October MOORE RESEARCH CENTER, INC. 35

38 Nov Class III Milk(CME) - Dec Class III Milk(CME) 11 Year Seasonal(97-7) 8 11 Year 6 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Nov Class III Milk(CME) - Jan Class III Milk(CME) 11 Year Seasonal(97/98-7/8) 8 11 Year 6 4 Class III Milk Spread Seasonal s: November 11 Year 11 Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Nov Class III Milk(CME) - Feb Class III Milk(CME) 11 Year Seasonal(97/98-7/8) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Nov Class III Milk(CME) - Mar Class III Milk(CME) 11 Year Seasonal(97/98-7/8) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov HISTORICAL DAIRY REPORT

39 2. Weekly Nov Class III Milk(CME) - Dec Class III Milk(CME) Weekly Nov Class III Milk(CME) - Jan Class III Milk(CME) Weekly Nov Class III Milk(CME) - Feb Class III Milk(CME) Weekly Nov Class III Milk(CME) - Mar Class III Milk(CME) Class III Milk Spread Weeklies: November MOORE RESEARCH CENTER, INC. 37

40 Dec Class III Milk(CME) - Jan Class III Milk(CME) 1 Year Seasonal(98/99-7/8) 8 1 Year 6 4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dec Class III Milk(CME) - Feb Class III Milk(CME) 1 Year Seasonal(98/99-7/8) 8 1 Year 6 4 Class III Milk Spread Seasonal s: December 1 Year 1 Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dec Class III Milk(CME) - Mar Class III Milk(CME) 1 Year Seasonal(98/99-7/8) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Dec Class III Milk(CME) - Apr Class III Milk(CME) 1 Year Seasonal(98/99-7/8) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec HISTORICAL DAIRY REPORT

41 Weekly Dec Class III Milk(CME) - Jan Class III Milk(CME) Weekly Dec Class III Milk(CME) - Feb Class III Milk(CME) Weekly Dec Class III Milk(CME) - Mar Class III Milk(CME) Weekly Dec Class III Milk(CME) - Apr Class III Milk(CME) Class III Milk Spread Weeklies: December MOORE RESEARCH CENTER, INC. 39

42 Class III Milk Seasonal & Spread Strategies Seasonal Strategy Entry Date Exit Date Win Pct Win Years Loss Years Total Years Average Profit Ave Pft Per Day Pg No 1 Buy Class III Milk(CME) May 1/2 1/ / Buy Apr Class III Milk(CME) Sell Jul Class III Milk(CME) 3 Buy Apr Class III Milk(CME) Sell Jun Class III Milk(CME) 4 Buy Apr Class III Milk(CME) Sell Mar Class III Milk(CME) 2/4 4/ /6 42 2/23 4/ / /25 3/ / Sell Class III Milk(CME) April 2/26 3/ / Buy Class III Milk(CME) April 3/7 4/ / Buy May Class III Milk(CME) Sell Jun Class III Milk(CME) 3/1 5/ / Buy Class III Milk(CME) August 3/17 6/ / Buy Sep Class III Milk(CME) Sell Dec Class III Milk(CME) 3/17 6/ / Buy Class III Milk(CME) April 3/18 4/ / Buy May Class III Milk(CME) Sell Jun Class III Milk(CME) 3/ 4/ / Buy Class III Milk(CME) April 3/21 4/ / Buy May Class III Milk(CME) Sell Jun Class III Milk(CME) 14 Buy Sep Class III Milk(CME) Sell Jun Class III Milk(CME) 3/25 4/ / /15 4/ / Buy Class III Milk(CME) September 4/26 6/ / Buy Oct Class III Milk(CME) Sell Jul Class III Milk(CME) 5/4 5/ /13 49 Class III Milk Strategy Summary 17 Buy Aug Class III Milk(CME) Sell Oct Class III Milk(CME) 18 Buy Sep Class III Milk(CME) Sell Dec Class III Milk(CME) 19 Buy Jul Class III Milk(CME) Sell Jun Class III Milk(CME) 5/15 6/ / / 6/ /25 5 5/ 6/ /31 5 Note: These trade strategies have worked with historical consistency. No representation is being made that they will work this year or in the future. Please check current market fundamentals and technical conditions before considering these trades. This information is not a recommendation to buy or sell at this time, but merely a historical presentation of trade strategies. Past results are not necessarily indicative of future results. No representation is being made that an account will or is likely to achieve profits or incur losses similar to those shown. SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 YEARS. THERE ARE USUALLY UNDERLYING FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN A SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR PERIOD OF THE YEAR. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A ABLE TRANSACTION AS FEES, AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST OR WILL IN THE FUTURE ACHIEVE S UTILIZING THESE STRATEGIES. NO REPRESENTATION IS BEING MADE THAT PATTERNS WILL RECUR IN THE FUTURE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE S OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. RESULTS NOT ADJUSTED FOR COMMISSION AND SLIPPAGE. Copyright Moore Research Center, Inc. 4 HISTORICAL DAIRY REPORT

43 Class III Milk Seasonal & Spread Strategies Seasonal Strategy Entry Date Exit Date Win Pct Win Years Loss Years Total Years Average Profit Ave Pft Per Day Pg No Buy Jul Class III Milk(CME) Sell Oct Class III Milk(CME) 5/21 5/ / Buy Class III Milk(CME) July 5/21 5/ / Buy Jul Class III Milk(CME) Sell Oct Class III Milk(CME) 5/21 6/ / Buy Class III Milk(CME) July 5/21 6/ / Buy Class III Milk(CME) June 5/22 5/ / Buy Class III Milk(CME) July 5/22 6/ / Buy Sep Class III Milk(CME) Sell Dec Class III Milk(CME) 27 Buy Sep Class III Milk(CME) Sell Aug Class III Milk(CME) 6/1 6/ / /1 8/ / Sell Class III Milk(CME) October 6/13 6/ / Sell Class III Milk(CME) August 6/22 6/ / Sell Class III Milk(CME) September 7/12 7/ / Buy Class III Milk(CME) November 7/19 7/ / Buy Class III Milk(CME) November 7/19 8/ / Buy Oct Class III Milk(CME) Sell Aug Class III Milk(CME) 34 Buy Sep Class III Milk(CME) Sell Aug Class III Milk(CME) 7/19 8/ / / 8/ / Sell Class III Milk(CME) November 8/1 8/ / Buy Aug Class III Milk(CME) Sell Nov Class III Milk(CME) 8/1 8/ / Sell Class III Milk(CME) December 8/1 8/ / Sell Class III Milk(CME) November 8/1 1/ / Buy Class III Milk(CME) December 8/31 9/ /12 6 Note: These trade strategies have worked with historical consistency. No representation is being made that they will work this year or in the future. Please check current market fundamentals and technical conditions before considering these trades. This information is not a recommendation to buy or sell at this time, but merely a historical presentation of trade strategies. Past results are not necessarily indicative of future results. No representation is being made that an account will or is likely to achieve profits or incur losses similar to those shown. SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 YEARS. THERE ARE USUALLY UNDERLYING FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN A SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR PERIOD OF THE YEAR. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A ABLE TRANSACTION AS FEES, AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST OR WILL IN THE FUTURE ACHIEVE S UTILIZING THESE STRATEGIES. NO REPRESENTATION IS BEING MADE THAT PATTERNS WILL RECUR IN THE FUTURE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE S OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. RESULTS NOT ADJUSTED FOR COMMISSION AND SLIPPAGE. Copyright Moore Research Center, Inc. MOORE RESEARCH CENTER, INC. 41 Class III Milk Strategy Summary

44 Class III Milk Seasonal & Spread Strategies Seasonal Strategy Entry Date Exit Date Win Pct Win Years Loss Years Total Years Average Profit Ave Pft Per Day Pg No 4 Buy Oct Class III Milk(CME) Sell Nov Class III Milk(CME) 9/15 1/ / Sell Class III Milk(CME) November 9/19 1/ / Buy Jan Class III Milk(CME) Sell Nov Class III Milk(CME) 43 Buy Dec Class III Milk(CME) Sell Nov Class III Milk(CME) 9/19 11/ / /4 11/ / Buy Class III Milk(CME) February 1/1 11/ / Buy Class III Milk(CME) July 1/16 1/ / Buy Dec Class III Milk(CME) Sell Nov Class III Milk(CME) 1/29 11/ / Buy Class III Milk(CME) December 11/5 11/ / Buy Dec Class III Milk(CME) Sell Feb Class III Milk(CME) 11/8 12/ / Sell Class III Milk(CME) January 11/28 12/ / Sell Class III Milk(CME) February 11/28 12/ / Buy Jun Class III Milk(CME) Sell Mar Class III Milk(CME) 12/3 12/ / Buy Class III Milk(CME) July 12/15 1/ / Buy Class III Milk(CME) April 12/3 1/ /19 67 Class III Milk Strategy Summary For other MRCI products and information: Website: sales@mrci.com (541) Fax: (541) Note: These trade strategies have worked with historical consistency. No representation is being made that they will work this year or in the future. Please check current market fundamentals and technical conditions before considering these trades. This information is not a recommendation to buy or sell at this time, but merely a historical presentation of trade strategies. Past results are not necessarily indicative of future results. No representation is being made that an account will or is likely to achieve profits or incur losses similar to those shown. SEASONAL TENDENCIES ARE A COMPOSITE OF SOME OF THE MORE CONSISTENT COMMODITY FUTURES SEASONALS THAT HAVE OCCURRED OVER THE PAST 15 YEARS. THERE ARE USUALLY UNDERLYING FUNDAMENTAL CIRCUMSTANCES THAT OCCUR ANNUALLY THAT TEND TO CAUSE THE FUTURES MARKETS TO REACT IN A SIMILAR DIRECTIONAL MANNER DURING A CERTAIN CALENDAR PERIOD OF THE YEAR. EVEN IF A SEASONAL TENDENCY OCCURS IN THE FUTURE, IT MAY NOT RESULT IN A ABLE TRANSACTION AS FEES, AND THE TIMING OF THE ENTRY AND LIQUIDATION MAY IMPACT ON THE RESULTS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT HAS IN THE PAST OR WILL IN THE FUTURE ACHIEVE S UTILIZING THESE STRATEGIES. NO REPRESENTATION IS BEING MADE THAT PATTERNS WILL RECUR IN THE FUTURE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE S OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. RESULTS NOT ADJUSTED FOR COMMISSION AND SLIPPAGE. Copyright Moore Research Center, Inc. 42 HISTORICAL DAIRY REPORT