TEUCRIUM CORN FUND
January 18, 2011
NYSE: CORN
Disclaimer
This material must be accompanied by the prospectus:
http://www.teucriumcornfund.com/pdfs/corn-prospectus.pdf
CORN has limited operating history, so there is no performance history to serve as a basis for you
to evaluate an investment in the Trust. Investing in Corn Interests subjects CORN to the risks of the
corn market, and this could result in substantial fluctuations in the price of CORN‟s shares. Unlike
mutual funds, CORN generally will not distribute dividends to Shareholders. Investors may choose
to use CORN as a means of investing indirectly in corn, and there are risks involved in such
investments. The Sponsor has limited experience in operating a commodity pool, which is defined
as an enterprise in which several individuals contribute funds in order to trade futures or futures
options collectively. Investors may choose to use CORN as a vehicle to hedge against the risk of
loss and there are risks involved in hedging activities. Commodities and futures generally are
volatile and are not suitable for all investors.
The Teucrium Corn Fund is not a mutual fund or any other type of Investment Company within
the meaning of the Investment Company Act of 1940, as amended, and is not subject to
regulation there under.
Shares of the Teucrium Corn Fund are not FDIC insured, may lose value and have no bank
guarantee.
All supporting documentation will be provided upon request.
Foreside Fund Services, LLC is the distributor for the Teucrium Corn Fund.
NYSE: CORN
Corn: Largest Grain, Everywhere in the World Economy
• Largest of all U.S. Agricultural Commodities
• Uses include: Animal Feed, Ethanol Production, Human Consumption, Polymer
Production
• U.S. demand (including exports): 33 million bushels per day in 2008/2009
• U.S. demand (including exports): estimated at 36.8 million bushels per day in
2010/2011
• World demand: 84 million bushels per day in 2008/2009
• World demand: estimated at 90.2 million bushels per day in 2010/2011
• Of the 10,000 items in a typical grocery store, at least 2,500 items use corn in some
form during production or processing
Sources: National Agricultural Statistics Service Crop Production Summary Jan 12, 2009/ USDA World Agricultural Supply and Demand Estimates Jan 12, 2011/
USDA Foreign Agricultural Service/s Spectrumcommodities.com/US Grains Council/ USDA Feedgrains Database: Yearbook/ Onatrio Corn Producers Assoc
NYSE: CORN
Corn: Demand Rising with Population & Prosperity
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Rising world population, while decreasing amount of arable land for crops, also brings
increased demand for corn and corn products
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As incomes in developing countries rise, consumers tend to diversify their diets – increasing
the relative consumption of meat (protein), dairy products and processed foods – all of
which increases corn demand
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Economic growth in developing countries is projected to average more than 5.6% annually
during the period 2010-19 per the USDA
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For the 2003/2004 to 2010/2011 crop year, worldwide demand for corn is forecast to
grow by 29.14%
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Between the 2003/2004 and 2010/2011 crop year demand in the U.S. grew by a
forecast 31.2%, supply grew by only 26.7%
Source: USDA Agricultural Projections 2010/ USDA: Jan 12, 2011
NYSE: CORN
Corn: The Ethanol Story
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Ethanol has replaced Methyl Tertiary
Butyl Ether (MTBE) as the primary
oxygenate in the US gasoline pool
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The average ethanol content in the 137
billion gallon US gasoline pool is 8.9%
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USDA projects about 13 billion gallons of
ethanol will be produced in 2010 from 4.8
billion bushels of corn
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1 bushel of corn = 2.75 gallons of ethanol
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In California, as of 2009, the average
SUV uses about 1 bushel of corn in each
tank of gasoline
Source: USDA.gov/oce/forum/2010 /Houston Biofuels Consultants, LLC/ www.suvbuyersguide.com/ www.ca.gov/ Renewables Fuels Assoc
NYSE: CORN
Corn: The China Factor
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The Chinese population is projected to grow by 6.6 million people in 2010.
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China became a net importer of corn in the 2009/10 crop year
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According to some analysts, China could import up to 1.7 million metric tons of
corn in the 2010/11 crop year ( I million metric tons = 39,368,000 bushels)
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According to some analysts, China could import up to 15 million metric tons of
corn by 2014/15
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Proteins are becoming an increasingly larger part of the diet in China as incomes
rise and urbanization continues
Sources: CIA Factbook/ USDA Foreign Agricultural Service/ USDA/ Bloomberg Business Week: China Enters „New Era of Buying Corn‟ July 26, 2010/ eia.gov
NYSE: CORN
Supply Uncertainty: Tight Inventory and Unpredictable Supply
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For the period 2006 to 2010, the
USDA estimates that 99% of all corn
grown each year will be consumed,
leaving virtually no excess inventory to
meet worldwide demand
The USDA estimate for the 2010/11
corn “carry-out” (excess inventory) in
the U.S. is for only 20.2 days of
supply, and the lowest stocks-to-use
ratio in fifteen years
Floods, drought, disease, pestilence all
directly affect crop output every crop
year
Corn production is concentrated in the
Northern Hemisphere with only one
crop cycle each calendar year
Unexpected shortages can cause
major price increases lasting one or
more crop years
Source: USDA Foreign Agricultural Service/ USDA/ USDA World Agricultural Demand and Supply Estimate Jan 12, 2011
NYSE: CORN
Supply Uncertainty: US Inventory & Prices
For Years 1975/76 to Jan 12 USDA Forecast of 2010/2011
Source: USDA Yearbook
NYSE: CORN
Yield per Acre:
A Question of
Weather
Source: USDA Yearbook and Jan 12 2011 Report/Teucrium Trading LLC
NYSE: CORN
Crop History: Past Drought Effects and Future Projections
Note no accommodation for yield irregularities in forward projections
Actuals 1990/1991 thru 2009/2010
Projection 2010/2011 thru 2021/2022
Darker colors represent drought
conditions
Source: National Corn Growers Assoc
NYSE: CORN
Corn Supply Shocks: Impacting Price
Percent Change in Supply and Percent Change in Price
For Years 1976/77 to Jan 12 USDA Forecast of 2010/2011
Source: USDA
NYSE: CORN
Asset Allocation and Ags
Rogers International Commodity Index (RICI) : 4.75% corn
(www.worldcommodityfunds.com Sept 1, 2009)
Rogers International Commodity Index Agriculture (RICIA) :13.61% corn
(www.worldcommodityfunds.com Sept 1, 2009)
Goldman Sachs Commodity Index: 3.25% corn
(www.goldmansachs.com as of Jan 1, 2011)
Goldman Sachs Commodity Index - Agriculture: 21.70% corn
(www.goldmansachs.com as of Aug 5, 2010)
Reuters Jeffries CRB Index: 6% corn
(www.jeffries.com as of Aug 6, 2010)
Dow Jones UBS Commodity Index: 8.68% corn
(www.djindexes.com as of Dec 31, 2010)
NYSE: CORN
Inverse Correlation: The Closing Price of Spot Corn Futures
Traded on the Chicago Board of Trade (CBOT) and the
S&P 500 April 12 to January 12, 2011
%
C
h
a
n
g
e
S&P 500 is an index of the largest 500 large-cap common stocks actively traded in the USA
One cannot invest directly in an index
Source:Bloomberg/Teucrium Trading LLC
NYSE: CORN
Corn: December Seasonal Pattern
Source: CME Group 2009 Moore Research Report
This chart consists of two aspects of a market‟s seasonal pattern – the most recent 15-year
(solid line) and its most recent 5-year (dotted line), December 2008 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 (100) or low (0) at a given time.
Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that
the Teucrium Corn Fund is likely to achieve a performance record similar to that shown.
NYSE: CORN
CORN and How it Works
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CORN, the Teucrium Corn Fund, is designed to provide investors with a vehicle
that allows direct exposure to corn without having to open a futures account
•
CORN trades on the NYSE Arca through a regular securities account
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CORN is designed to mirror the volatility of corn futures and can often be more
volatile than that of other commodity/agricultural exchange traded securities
NYSE: CORN
CORN and How it Works: Liquidity
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The approximately $4 billion of corn futures traded every day in the U.S. corn
pits determines the liquidity of CORN - not the shares outstanding or the
average daily volume
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Market makers will create more shares each day to accommodate any
size/liquidity needs of investors based on the corn futures pits
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Active commodity/agricultural traders can take advantage of CORN‟s daily
price volatility
Source: CBOT Exchange ADV Monthly report published by CME group (Jan 2009 to May 2010)
NYSE: CORN
CORN and How it Works: Intraday Indicative Value (IIV)
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SEC requires that all exchange traded products make available the IIV of the
securities‟ share price so that investors have transparency, similar to that of
professional market-makers
The IIV is independently calculated and disseminated by the listing exchange - in
the case of CORN the IIV is calculated by the NYSE
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The IIV is calculated and updated every 15 seconds throughout the trading
day based upon the value of the underlying holdings in a exchange traded
product‟s portfolio
We believe that the IIV calculation is most accurate between 10:30 am and
2:15 pm eastern time when the Chicago Board of Trade (CBOT) pits are
open
The IIV for Teucrium Corn Fund can be found at:
www.teucriumcornfund.com or http://finance.yahoo.com/^corn-iv
NYSE: CORN
Teucrium Trading LLC:
Designing a Product-Specific Benchmark
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CORN has been specifically designed to mitigate contango¹ and backwardation¹ issues
versus other commodity exchange traded securities
CORN‟s Benchmark is composed of three different futures contracts, reducing turnover
and minimizing negative effects of “rolling”¹
Unlike other commodity exchange traded products and indices - CORN holds no spot
month futures
CORN will always hold at least one December contract (see Benchmark¹) given the
liquid nature of corn in that month. For CORN, December is the “Anchor”¹ month
CORN provides investors with an investment tool allowing precise allocation to corn, the
largest U.S. agricultural commodity, in their portfolios
CORN allows investors to hedge their corn exposure in other mixed-commodity holdings
by increasing or decreasing their amount of corn exposure
¹
See Definitions in Appendix
NYSE: CORN
Teucrium Trading LLC: A Strong Team
• Fund Principals:
Sal Gilbertie, Dale Riker and Carl (Chuck) Miller
• Custodian, Transfer Agent and Administrator:
Bank of New York Mellon
• Marketing Agent and Distributor: Foreside Fund Services, LLC
• Media Relations: WT Blase & Associates
• Legal Counsel: Sutherland, Asbill & Brennan, LLP
• Auditors: Rothstein, Kass & Company, P.C.
• Fund-Holder Tax Preparation: Price Waterhouse Coopers
NYSE: CORN
The Teucrium Team
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Sal Gilbertie, president and co-founder of Teucrium, brings deep experience in commodities markets, particularly in the areas of
trading and liquidity, providing insights which enable him to design compelling Exchange Traded Products (“ETPs”) for a wide
variety of investors. In 1982, Mr. Gilbertie began trading at Cargill's oil arm in New York. He has been involved in the financial
markets since that time, most recently with Newedge USA, LLC, where he headed the Renewable Fuels/Energy Derivatives Overthe-Counter (“OTC”) execution desk and was an active over-the-counter derivatives trader and market maker. While there, Mr.
Gilbertie developed the liquidity and the standard contract in the ethanol market. Prior to that, he was principal and co-founder
of Cambial Asset Management, LLC, an adviser to two private funds that focused on equity options, and Cambial Financing
Dynamics, a boutique investment bank. Mr. Gilbertie, who is 50 years old, graduated from Fairfield University in 1982 with a
Bachelor of Science degree in Business Management.
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Dale Riker, secretary-treasurer and co-founder of Teucrium, also serves as the Chief Financial Officer and Chief Compliance
Officer of the firm has a strong background in corporate finance and operations. Mr. Riker began his corporate career in 1983
as an auditor with AT&T, serving for the next twelve years in both operational and corporate positions with Pacific Telesis Group.
In 1994, Mr. Riker was Chief Financial Officer of Pacific Bell Enhanced Services Group and later was appointed treasurer of
PrimeCo, the start-up wireless joint venture formed by four “Baby Bells.” After PrimeCo, Mr. Riker built and then sold a software
company the focused on software for the banking and brokerage industry. He also founded, during this time, with Mr. Gilbertie
Cambial Asset Management. Mr. Riker, who is 52 years old, graduated from San Diego State University with a degree in
Accounting.
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Carl N. (Chuck) Miller III, co-founder of the firm, is a lifelong Wall Street trader and manager. Mr. Miller began his career in
tropical commodities in 1974 at ACLI (later acquired by DLJ) and has held positions at a wide variety of Wall Street firms,
including those associated with commodities, dividend recapture and hedge funds. In 2001 Mr. Miller founded Garnet Advisors,
LLC, a proprietary trading firm that focuses on a broad array of investment opportunities; in his role at Garnet, Mr. Miller was
responsible for new business development and risk management oversight of trading and management within the firm. Mr. Miller
is 58 years old.
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Kelly Teevan, managing director of the firm and Teucrium's head trader, is responsible, along with Mr. Gilbertie, for making
trading and investment decisions for each of the Funds, and for directing Fund trades for execution. Mr. Teevan graduated from
Phillips Exeter Academy, Harvard College and Stanford Graduate School of Business, following which he worked in commodities
brokerage and business development at firms in New York City, San Francisco and Sydney, Australia, including ACLI, DLJ Futures,
Rudolf Wolff Commodity Brokers, and Capel Court Investment Bank. From 2003 until 2009, Mr. Teevan was retired and served on
non-profit boards, focusing on financial and endowment issues. Mr. Teevan is 59 years old.
NYSE: CORN
Appendix
NYSE: CORN
Definitions
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Anchor Month: The pivotal month in the index; the month in which the ETP is always
invested. For CORN, that month is December.
Backwardation: A market condition in which a futures price is lower in the distant
delivery months than in the near delivery months.
CBOT: Chicago Board of Trade
Contango: A condition in which distant delivery prices for futures exceed spot prices,
often due to the costs of storing and insuring the underlying commodity. Opposite of
backwardation.
Ending Stocks: The amount of corn that will be available or is available at the end of
the crop year, given the estimated or actual beginning stocks, production and usage
NAV: Net Asset Value of the Fund
Rolling: When an investor replaces an existing futures position with a new one having a
later expiration date.
S&P 500: an index of the biggest 500 large-cap common stock actively traded in the
USA
Spot Corn Futures: The corn futures contracts with the nearest expiration and delivery.
NYSE: CORN
Definitions
Teucrium Corn (TCORN) Index : A weighted average of daily changes in the closing
settlement prices of (1) the second-to-expire Corn Futures Contract traded on the
CBOT, weighted 35%, (2) the third-to-expire CBOT Corn Futures Contract, weighted
30%, and (3) the CBOT Corn Futures Contract expiring in the December following the
expiration month of third-to-expire contract, weighted 35%. To convert to an index,
100 is set to $25, the opening day price of CORN.
• Yield: Yield per acre; how many bushels of corn can be produced from an acre of
land.
•
NYSE: CORN
Disclaimer
This material must be accompanied by the prospectus:
http://www.teucriumcornfund.com/pdfs/corn-prospectus.pdf
CORN has limited operating history, so there is no performance history to serve as a basis for you
to evaluate an investment in the Trust. Investing in Corn Interests subjects CORN to the risks of the
corn market, and this could result in substantial fluctuations in the price of CORN‟s shares. Unlike
mutual funds, CORN generally will not distribute dividends to Shareholders. Investors may choose
to use CORN as a means of investing indirectly in corn, and there are risks involved in such
investments. The Sponsor has limited experience in operating a commodity pool, which is defined
as an enterprise in which several individuals contribute funds in order to trade futures or futures
options collectively. Investors may choose to use CORN as a vehicle to hedge against the risk of
loss and there are risks involved in hedging activities. Commodities and futures generally are
volatile and are not suitable for all investors.
The Teucrium Corn Fund is not a mutual fund or any other type of Investment Company within
the meaning of the Investment Company Act of 1940, as amended, and is not subject to
regulation there under.
Shares of the Teucrium Corn Fund are not FDIC insured, may lose value and have no bank
guarantee.
All supporting documentation will be provided upon request.
Foreside Fund Services, LLC is the distributor for the Teucrium Corn Fund.
NYSE: CORN