Softs in London

Vince,

With regard to the softs curves development, I have been communicating with a
couple of folks in London. The key contacts include James Willis (cocoa and
sugar broker) and Nigel Majury (coffee broker). We had a conference call on
Thursday (Heather, Trena, Erin, James, Nigel, Frank Speight, Nelson) to
discuss data sources, data acquisition, priorities, and timelines. A number
of data sources were identified (e.g., USDA, Int'l Cocoa Organization, ED&F
Man, Landell-Mills Commodities, etc.) and both the Houston and London offices
have taken steps to obtain the information. Curve development priorities
were adjusted as well. Raw sugar remains the top priority; however, cocoa
replaces coffee in the softs importance hierarchy. I suppose that this
results from our physical (or soon to be) positions in both markets. The
timeline hasn't changed; however, adjustments will have to be made since we
haven't yet acquired all of the necessary data for price modeling. Moreover,
per our discussion this afternoon, additional thought/time will have to be
devoted to corn modeling to come up with an adequate hedging strategy.

Nelson