NEWS RELEASE

For immediate release: April 1, 2016

McCUNE COOP JOINS COMARK

Effective April 1, 2016, McCune Farmers Union Coop Association of southeast Kansas will join 12 other cooperatives from across the state as a member owner of Comark Grain Marketing, LLC. As a member of Comark, McCune will benefit from more efficient grain marketing, shared profits, and a reduced risk profile, while still maintaining their local identity as an individual cooperative. Ryan McCoy, Comark Grain Marketing president, said, "Comark looks forward to a long, mutually beneficial, relationship with our new owner."

McCune Coop, incorporated in 1941, is located in Crawford County and also serves producers in Cherokee, Labette, and Neosho counties. The cooperative handles corn, soybeans, milo, hard red winter wheat, and soft red winter wheat. Russ Smith, general manager, said, "Being a standalone coop, we don’t have the volume needed to be competitive, so Comark helps fill that need." Smith also said he appreciates the marketing expertise Comark brings to McCune’s operation, which made joining Comark, "a really attractive deal."

Comark Grain Marketing was established in 2008 to bring efficiency to the grain marketplace while limiting risk for nine cooperative owners and a joint owned LLC in southcentral Kansas. Today, Comark Grain Marketing is responsible for grain merchandising, risk management, sales accounting, and truck and rail logistics in addition to other grain responsibilities for 12 cooperative owners throughout southcentral, southeast, and northwest Kansas. "The addition of McCune will work very well with our other member assets in southeast Kansas," said McCoy. These owners have assets that include 73 elevator locations and over 56 million bushels of grain storage capacity in Kansas, Nebraska, and Oklahoma. Because of the efficiencies created in the relationship between Comark and its members, Comark has returned nearly all profits to their owners.

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Attached: Comark Grain Marketing, LLC logo

Contact details:

Ryan McCoy

                  CoMark Grain April Newsletter

Things are looking much better in our area with the moisture we have received over the last couple of months. Hopefully the rain keeps coming our way to finish the wheat crop and for fall crops. The first quarter of our fiscal year is over, and so far things are looking good. Now we need wheat to fill the bins and everyone will be happy. Below are some common questions about CoMark that are asked.

What is CoMark and what do they do?

• What is CoMark (Three companies: CoMark Inc, CoMark LLC, CoMark Grain): The purpose of CoMark is to do together what each local Coop could not do cost effectively on their own. CoMark provides the following services to their member Coops. Some Coops use all the
  services, some mix and match the services we provide. All Coops are part of CoMark Grain. Services below are listed in order of inception.
• Fertilizer Purchasing: CoMark was founded in 1992 as a fertilizer purchasing group. Eight Coop managers from the SC KS area thought that if they pooled their buying demand into one entity it would give them more market clout. This has been true over the years.
• Fertilizer Assets: The group realized a need to add liquid fertilizer storage for a couple of reasons. First, during peak fertilizer season trucks couldn't keep up with producer demand and would run out of product locally. Second, the group was able to buy the Fertilizer in off
  peak times when prices are lower and store it to keep from buying it during peak seasonal needs. By building these liquid fertilizer tanks together, costs were reduced to each member Coop.
• Safety: New rules, regulations, and standards made a need for a safety person to be hired. Splitting the time of one person between eight Coops was better than each of them hiring their own safety professional or training eight people to do it part time.
• Grain: CoMark Grain Marketing LLC (CGM) started in 2008 and currently has 14 Coop members. The reason it started revolved around the same needs of the formation of the
  fertilizer purchasing group. To sell grain together for market clout and take advantage of other inefficiencies in the market with an experienced professional staff.
• Fuel: The success of CoMark Grain and market volatility spurred the formation of the fuel department. The thought was that the success that was realized in the grain could be used in fuel to make a more efficient model with a dedicated professional staff. Market volatility also created the need for risk management processes just like grain.
  What are the advantages of CGM over the way my Coop used to sell grain?
• There are efficiencies that come into play the way CGM is set up. All of our elevators are under one federal grain license and all of the sales/logistics/back office roles are done fromone central location.
• Management: CGM has a professional sales and accounting staff. We specialize in grain. We are always looking at the markets around us and make the best decisions with the information we have at the time. Before CGM most GM's at the Coops made the sales decisions. On top of everything else that went on in a normal day they had to try to keep up with the local market and make sales decisions while not having the cash grain market insight that the management team at CGM has. CGM is determined to get the right bushels to the right place at the right time based on freight costs, quality requirements, and other market factors.
• Asset Utilization: We ship the grain that needs to move most or that is best positioned to the end user the grain is going to. This has all but stopped terminal storage costs which used to average $750,000+ annually when each Coop was on their own.
• Position Management: We can sell grain ownership out of any location from any location. Example: We own wheat at Anthony who doesn't take a lot of fall crops we can ship that wheat ownership out of Ark City who needs to move their wheat to make room for fall crops. Or if we own Corn at Cunningham and the Western KS feedlot market isn't as strong as the Springdale, AR chicken market, we can sell corn to Springdale out of Columbus using the
  Cunningham ownership. This is called arbitrage.
• Logistics Efficiencies: Centralized Truck Management allows us to see where trucks are needed the most. This is especially helpful during harvest. We can also minimize freight costs by running trucks on rounds like Cheney corn going South with Kiowa wheat moving North to Wichita that cuts freight costs on both commodities being hauled. We also utilize backhauls that Coops didn't used to utilize. Over the last two years we have saved over $1,000,000 in freight by utilizing backhauls rather than just running trucks at full freight. This is only possible because all functions are in one building.
• Risk Aversion: Your Coop owns a percentage of CGM based off of their five year average producer receipts. So for example if your Coop has a freeze in your area while other regions of the CGM territory doesn't have that problem your Coop will still receive their percentage
  of the profits that CGM generates even though they take a crop that is substantially below average.
• Other: By working together there are some cost savings. Interest rates are lower, Hedging costs are lower, and we can package other things together to provide better value in services for your Coops like websites and real time quotes. All Profits from CGM go back to your local Cooperative so everyone shares in the success.
• How does CGM set local grain bids and why is my local bid different from another location?
• Many factors come into play on setting local cash grain bids. End user bids, freight, margin needed, competitor bids, and other factors determine the local bids at your location. These reasons are why there are different bids at different locations. We strive to have competitive bids every day at all locations.
• For more information contact us at: 316.542.3435 Grain
  316.542.9911 Fuel
  316.542.0531 Office

CoMark Grain Newsletter October 2012

It has been another tough fall harvest in all the CoMark territory.  Poor yields and poor quality were the main issues for you and CGM.  Most of the wheat is in the ground by now and I hope that the old saying "plant it in the dust and the bins will bust" comes true.  Hopefully it has rained by the time you receive this newsletter.     

Aflatoxin has been getting a lot of press recently since it is a wide spread problem.  As you know, we have been battling aflatoxin for the last several years.  We are seeing many changes in the arena of aflatoxin. 

• There are many more end users checking for aflatoxin. I would guess that 95%+ of commercial end users have some sort of testing policy and procedures.
• The end users are not only checking for Mycotoxins, they are requiring grain be much better than the FDA guidelines. For example there are large feedlots that require corn be less than 20ppb aflatoxin(stated on contract) when feedlot cattle can consume up to 300ppb. This example is more normal rather than the exception to the rule.
• Third, the new FDA Food Safety Modernization Act of 2011 is imposing new rules on the grain industry as it relates to Mycotoxins and how the infected grain can be handled/sold/used. If the FDA has reason to believe we have done something improper as it relates to the grain we receive or sell, they can lockdown or quarantine an elevator and make sure the contaminated grain is disposed of properly before the elevator is released back into service. The FDA will also be checking with end users to make sure that they are testing and have good procedures in place before a problem arises.

I realize that aflatoxin is a sore subject for most of you.  You have to understand that Mycotoxins are serious.  They are poison, and cause cancer!We will not take Mycotoxins lightly nor should we.  There is a huge risk and liability that goes along with handling this type of grain.  We will continue to take grain that we know there is a market for and that we feel comfortable we will be able to "legally" sell into the marketplace.  That being said we will try to have a better gameplan next year to handle it if it is a problem again in this area. 

On to better subjects.  The markets have been strong for the last several months.  You have a good opportunity to sell in store grain in the upper 10% to 30% of the market over the last five years (see charts below).  It is also a good time to get a marketing plan around for 2013 crops if you haven't already.  The markets are showing you some pretty good opportunities. 

CGM is into the last quarter of the fiscal year.  Even though fall crops have not been good, the large wheat crop combined with "carry" in wheat futures has allowed CGM to maintain good levels of profitability, similar to the last few years.

Three new coop members have joined CGM this year; Wellington, Mulvane, and Oberlin.  Their receipts increased company size by approximately 30%, bringing total licensed storage capacity to 60 Million bushels and annual receipts of about the same.  CGM will continue to look for growth opportunities that will benefit it's coop members and the farmers that own them.  Thank you for your business.  Have a safe and happy holiday season. 

                 COMARK GRAIN MARKETING LLC

NEWSLETTER

Trying to Understand the  "Big Picture"

"The Big Picture" is a term that is often used but has a vastly different meaning to almost everyone that uses it.  One person may think the "big picture" is what is going on in Kansas and another may think it is what is going on in the world. Here are some of those "big picture" items that I think about in terms of the grain industry.

Producers are getting bigger and that trend will continue.  20% of the farmers produce 80% of the grain in our territory.

Technology and science will allow yields to continue to increase. 

New equipment gets bigger, old equipment gets retired. Farming gets faster and faster. 

Space has to be available to provide safe, long term grain storage. End users need a steady, year round supply. 

Grain markets are global, not local.                             

These trends are not sudden, they have been happening since the beginning and the industry has to evolve in order to keep up. New assets for the future farmer require access to capital and profits that allow the industry to pay for those capital expenditures.  As you look across the grain belt, billions of dollars are being spent on structures that can handle the needs of today's production and billions more will be needed.  A long and continuing process of retiring the old and worn out with new high speed facilities to keep up with high speed farming.

Comark Grain Marketing LLC was formed 5 yrs. ago as part of the evolution of the industry.  With grain receipts of 60 million bu., several benefits come into play.

                With 60 elevators in the territory, space can be more efficiently utilized under one license.

A large geographic area allows for access to more markets for all members within allowable freight distances.

            Allows for "big picture" marketing and transportation strategies. 

                The larger geographic area spreads out individual coop's weather risks.  Hail, drought, etc.

                The ability to attract the best and brightest employees.

Grain marketing groups are here to stay. The benefits for a small local coop far out weight the negatives and more and more coops are figuring that out.  CGM has added three new members recently (30% growth) and we are seeing more interest from others as they see the financial results from coops that are members of marketing groups.  A recent comment from a coop auditing firm "marketing groups have been very successful, a lot of coops are looking to get in, but none are wanting to get out".

Drive across the country and you can see the "big picture", farmer owned coops have been the leader in providing storage and facilities to serve the local need. Privately owned companies have not been willing to put their capital into country facilities the way that farmers have because of historically low investment returns. So as we look to the future, there should be some changes that we see come into clear focus. 

                Coops and marketing groups will become larger, driven mainly by efficiencies.

Coop boards will slowly evolve to see the benefits of cooperation with other coops for their members or slowly dwindle away. Sufficient profits have to be maintained at the local coop in order to keep up with the leaders of the industry pack, replacing worn out facilities and investing in new technology.

Farms will become larger for the same reasons. As producers grow, they need to partner with someone to provide them with the latest marketing assistance, technology, genetics, equipment and advice.  

There will be a slow and steady evolution of facilities to accommodate the future farmer in a more efficient manner.

CGM was formed by a group of coops that were able to see the "big picture" and the results the last five years has rewarded them for their decisions. All farmer members have benefited and their local coops are better positioned today to meet the many challenges of tomorrow. Many have built storage or are looking to do something in the near future.  Equities have been retired and overall their balance sheets are stronger.  Coops have served their owners for generations and will slowly but surely make the changes to serve generations to come.

Dave Smith

June 28, 2011 CoMark Grain Marketing Newsletter

Wheat harvest has come and gone. Harvest was much better than expectedin both quantity and quality. Overall, CGM took 90% of an average wheatcrop. Expectations were around 65% of normal. The quality of the crop was also very good. The average test weight was 61.8 and the average proteinwas around 12.6%. Milling yield of the wheat was not as good as last years.

The poor flour yield has to do with the small size of the berries in this year'scrop.What a difference a year makes. Last year wheat basis was record wide,and this year it got to levels much closer to normal. We had many thingsworking for us on the basis side going into and during wheat harvest thisyear. Basis is driven by local supply and demand. On the supply side, we had lower than normal supply. The demand side is where things really got hot. We had a good quality crop that buyers want. Terminals had space that they wanted to fill. The futures market is paying good carry from July forward so everyone wants to fill space to capture that carry. So less supply and more demand equals stronger basis, while last year we had adequate supply and weak demand.

While we are talking about the strong basis during harvest it is a good time to bring up one marketing option that allows you to take advantage of strong basis. Basis contracts allow you to lock in basis and apply futures at a later date. For example if basis goes to -20 KC September you could lock that basis in and price the futures before the KC September first notice day (August 30). For now, basis values seem to be inverted (future basis wider than nearby basis), but since there is carry in the futures market it is about a wash on the cash price. For example: KC September is $7.50 and -30 Sep Basis = $7.20 Cash, and KC Dec is 7.75 and -55 Dec Basis = $7.20 cash. Basis contracts are the opposite of HTA contracts. HTA contracts give you the opportunity to lock in a favorable futures price while you wait for a basis to be offered or basis improvement at a later date.

Hopefully by the time you receive this newsletter we will have received rain. Corn in our area is either struggling or in some cases already burned up. Beans seem to be hanging on, but are not looking good, and milo is also struggling or not coming up because of lack of moisture. I have heard several people say that they have seen it this dry, but never this early. Hopefully Mother Nature gets us caught up on moisture soon.

Ryan McCoy

April 2011 Grain Newsletter

3-30-2011

The wheat in our area is looking good although we don't have a lot of moisture over much of the CGM trade territory.  Timely rains will still be needed for a good wheat crop, but today the potential is there.  The Western Kansas wheat crop is in poor condition for the most part.  Below are the state wheat condition ratings as of 3/20/2011.  The good to excellent ratings are only 27% which is well below average.  Most of the poor to very poor is in the western 1/3 of Kansas. 

The markets have continued to be very volatile.  The Japan earthquake and tsunami broke the market very hard and then it bounced back in a few days.  Overall, the prices for all commodities are still high.  There are still good opportunities to forward contract grain well above cost of production if you figure average yields.  I continue to urge you to look at those marketing opportunities and take advantage of those if they meet your goals. 

The USDA Planting Intention report will be out before you get this newsletter.  That report will continue to affect the markets as traders position themselves to their actual planting expectations.  Acres will be at a premium this year with many commodities competing for acres.  Corn, wheat, soybeans, and cotton are all at very attractive levels.  We will see how the acres play out over the next couple of months.

How does CGM benefit your coop?  CGM does all of the grain purchasing and sales for 11 Cooperatives in SC and SE Kansas.  With that much grain volume there are efficiencies that come into play. 

• By combining all of the storage space under one USDA Warehouse License we can manage the group's grain handling assets much better.  That means CGM can have ownership of wheat in Cheney, but actually ship the wheat out of Arkansas City if we want to because Arkansas City wheat is worth more at that time.  Then when Cheney wheat starts being worth more, we use the ownership out of Arkansas City and ship the wheat out of Cheney.  This efficiency also decreases the amount of terminal storage that we pay by taking ownership out of places that don't need to move grain and using it to move grain out of the places that do.
• CGM decreases your Coop's bottom line risk.  CGM pays your coop in three ways: 1) a per bushel handling fee, 2) the coop's percentage of the storage pool for storage earned, and 3) your coop owns a percentage of CGM, and the profits generated are paid back to your coop based on that percentage.  If your coop's trade territory has a big hail storm that comes through and you only get 50% of a normal crop, the coop is still paid their ownership percentage of the profits as well at their percentage of the storage pool based on five year averages.  The income that they would lose is the per bushel handling fee.  
• Centralized truck management increases truck productivity and allows us to prioritize everyone's needs.  CGM puts trucks where they are needed most and ships the grain that makes the most sense as far as freight costs, quality sold, and other requirements.   
• CGM manages the grain positions for the coops and are always looking for the best markets for the grain we own.  We are totally focused on grain and getting you the most value for that grain.  
• We can meet grain quality requirements easier by having many elevators we can move grain from.

Moving forward we hope you have timely rains, good fall crop planting weather, and a safe and prosperous wheat harvest.  Have a great summer!

CoMark Newsletter Jan 2011

Happy New Years from all of us at CoMark Grain. 2011 is shaping up to be another wild year

in the markets. The markets have been extremely volatile the last few months and have given many

opportunities to sell old crop and new crop grain at profitable levels.

I want to take this opportunity to visit with you about marketing, not markets. I know that the

markets will give you opportunities, but marketing is how you capture those opportunities. Every time

I write this newsletter I write about how important it is to sell profitably and not to allow cash flow to

determine when you sell. Are the prices today good enough to sell? That is for you to determine.

There are some good resources at our website www.cgmllc.coop to help you market your grain. Go to

the website and click on Producer marketing reports at the top of the page. On this page you can

access USDA Reports as well as some very easy to use Producer Marketing tools that can help your

grain marketing. Below is a list of information on that page.

• You can access USDA reports like Supply and Demand, Export Sales, and the March 31st

release of the yearly Prospective Plantings report. All of these reports are good for you to look

at regularly.

• Under Producer Marketing Tools: The first thing to look at is the link titled General Marketing

Plan Guidelines. This publication gives you a general outline to a good marketing plan. Some

people want more detail and some want less. The marketing plan is the first step to becoming a

better marketer of your production.

• KSU Crop Budgets: This Excel Spreadsheet Crop Budget is simple to use and fill out. Just

click on the link and select the region you farm in and what crop rotation you are using. It will

give you some general production costs for your area given different yields, but I would

encourage you to enter your own information as this spreadsheet hasn't been updated by KSU

for awhile and your real numbers are what you should be making your decisions off of. At the

end of the spreadsheet you will get your expected per bushel production cost which you need to

know for the next step of your marketing plan.

• Once you have a good grasp on the marketing plan and your cost of production now go to the

Market Plan Guideline. This spreadsheet will allow you to put some of your plan on paper.

You enter the information and open orders you want to enter and it will automatically figure

your expected profits from those sales. It breaks down the plan into 4 different time periods

that determine how much grain you are willing to sell in those timeframes (Pre-Plant, Growing

Crop, Harvest, Post-Harvest). Just fill out the blue cells in the spreadsheet. It will work all the

numbers you enter to figure your expected profit per acre. Folks that have used it so far have

had really good things to say about it, so try it out.

• Last but not least is the link to contracts and tools we offer to lock in prices and help you

minimize price risk. This is a general outline of the different contracts and tools that are

offered to you by CoMark Grain through your local coop.

So make a New Year's resolution to become a better marketer. Use the resources above and all

resources that are available to you. It isn't easy and for some people it isn't fun, but it is worth the

effort when you have a successful marketing year.

 Board of Directors approves Equity Redemption

The Board of Directors at it's August board meeting approved the redemption of the 1990 and 1991 revolving fund equities. This brings us one step closer to achieving our 15 year equity revolvement by September of 2011.  The Board also approved an equity retirement policy that will provide for more flexibility in equity retirements in the future as we approach our revolving fund goals.