ARM Strategic Alliance – May 2024

As you read this, you are likely focused on planting the 2024 crop. Yes, it is that time of year and
everyone is hoping to get off to a good start. Speaking of new starts, we at ARM are going to start a
new wrinkle to some degree. The objective is to create a monthly digest around crop marketing and other
pertinent news from our perspective in hopes of creating better communication and a more productive
and profitable relationship for all of us. Our success is mutual, when you are successful so are we. We
appreciate the opportunity to serve by providing the financing you need.

Building a Strategic Alliance

We sincerely desire you to be successful in every way this crop season. These are
challenging times and additional pressure is created on you and those around you. ARM is here to
build a Strategic Alliance with each of our customers. We are successful when you are successful
and want nothing but the best for you, your family and your farming operation. Reach out to your
trusted advisor at ARM. That may be the local Area Manager, Loan Officer or Crop insurance Agent.
We are invested in you and encourage you to depend on us to help make strong financial decisions
to navigate these current challenges. The goal for this Strategic Alliance is simply navigating the
current economic situation while waiting for demand to return. We are committed to being your
ally in this. We look forward to your success!

The Elephant in the Room: Growing Stocks

For our first visit, let’s start with the elephant in the room. It has been here since this time last year.
Stocks of corn and soybeans have been growing for the past 12 months or longer. This trend may
well continue for the 24 crop year. Marketing through this downward trend may not be a short-term
exercise. Reducing production costs are the only way to stay competitive and remain in the game.
The truth is if your marketing plan was without error last year, you are in a great position. From
where we stand, that was a small fraction of our customer base. For the rest, what can we do to
improve?

What is done is done, the old crop needs to be sold on rallies and improved basis opportunities if
they can be found. Our biggest concern is that the possibility exists for the same thing this year….
Yes, current conditions are favorable to increase ending stocks again in 2024 and that could make
today’s $4.70 corn look very attractive. A big crop this year and we could be looking at $3.70 for the
corn we are planting today. Soybeans are in much the same boat just maybe for different reasons.
Larger supplies, lack of demand from key importers as well as $USD strength has our soy at a
disadvantage for the time being. A good planting period and average summer weather should
create more than enough beans to build stocks.

Proactive Marketing: A Crucial Step

It may surprise you that some of the active marketing agencies already have as much as 50% of
new crops marketed in corn and soy in some form or fashion. Do you? This year does not appear
to have the weather phenomenon we had last year. We look to be starting off with much better
subsoil moisture in most corn and soy states, which bodes well for a good crop. This time last
season, that was not the occurrence, and prices were supported through the planting season due
to a drought. That does not appear to be the case this season. I would encourage keeping an eye
on the markets while planting. The trade likely believes an average crop is possible once planting is
complete. When that belief changes from average to good, prices will diminish accordingly.
Let us not get caught up in what is in the back yard. Small geographic areas have minimal impact
on our major crops today. As a nation, we influence corn more than any other crop and that is
slipping with increased planting in South America.

Strategic Selling: A Prudent Approach

Let us not get caught up in what is in the back yard. Small geographic areas have minimal impact on our major crops today. As a nation, we influence corn more than any other crop and that is slipping with increased planting in South America. We would urge selling 25% of your 2024 crop on any rallies between now and June 1st. That goes a long way toward meeting your obligations to landlords, vendors and lenders. Again, our current view is corn and soybean prices having more downside with good planting conditions. There is plenty of time to get the crop planted and moisture is much better than this time last season.