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RE:Question on marketing stream contacts

[bradfarquhar]

WheresMeGold,

In order to run the Marketing Stream program successfully, our Grain Marketing & Logistics department needs to know how much canola volume they have in each year's program significantly ahead of time.  This is primarily driven by the fact that canola prices net of basis have a significant degree of seasonality - prices tend to be highest in the spring and lowest in the fall. Input wants to lock in prices when they are highest, and the seasonality is such that the normal timing for this is in the March/April/May period.

If we left the program open until August for farmers to sign up tonnes for delivery from the September harvest, we might get a lot of farmers signing up at that time because grain marketing is on their minds, but Input would be unable to put up the results that can be achieved with the strategy that we have.  And ultimately, the Marketing Stream program lives and dies by its long-term results.

It isn't much different than retail stores placing orders for Christmas inventory months ahead of time, or universities requiring applications well ahead of registration day. Some things don't work well when left to the last minute, and grain marketing is one of them.

After April 15, we're happy to continue to have farmers sign up to our marketing stream program, but we can't guarantee them any delivery opportunities until the harvet of 2019.

I hope this helps your understanding of the dynamics at play.

Brad Farquhar
Executive VP & CFO
Input Capital Corp.