CERES GLOBAL : Q3 FY24 MANAGEMENT DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
1. FINANCIAL AND OPERATING SUMMARY	4
2. QUARTERLY FINANCIAL DATA	14
3. LIQUIDITY & CASH FLOW	15
4. CAPITAL RESOURCES	18
5. ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES	20
6. OUTLOOK	20
7. OTHER	23
8. NON-IFRSFINANCIAL MEASURES AND RECONCILIATIONS	27
9. KEY ASSUMPTIONS & ADVISORIES	29

This Management's Discussion and Analysis ("MD&A") dated May 14, 2024 should be read in conjunction with the unaudited Interim Condensed Consolidated Financial Statements for the quarter ended March 31, 2024 of Ceres Global Ag Corp. ("Ceres", the "Corporation", "we", "our", and "us"), and the Corporation's audited Consolidated Financial Statements for the year ended June 30, 2023 (the "Annual Consolidated Financial Statements"). Additional information about Ceres filed with Canadian securities regulatory authorities, including its Interim Condensed Consolidated Financial Statements, Annual MD&A, and Annual Information Form dated September 15, 2023 (the "AIF"), is available online at www.sedarplus.ca.

Basis of Presentation

Unless otherwise noted, all financial information has been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board. Unless otherwise indicated, dollar amounts are expressed in United States dollars ("$" and "USD") and references to "CAD" and "C$" are to Canadian dollars.

Non-IFRS Financial Measures

This MD&A contains references to certain financial measures that are non-IFRS financial measures, also known as non-GAAP financial measures, non-GAAP ratios, or supplementary financial measures pursuant to National Instrument 52-112 - Non-GAAPand other Financial Measures Disclosure. Adjusted earnings before interest, income tax, depreciation and amortization ("Adjusted EBITDA"), adjusted net income, and working capital are non-GAAP financial measures, adjusted EBITDA per share is a non-GAAP ratio, and return on shareholders' equity is a supplementary financial measure. None of such measures

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or ratios has a standardized meaning under IFRS. See "Non-IFRS Financial Measures and Reconciliations."

Beginning in the second quarter of fiscal year 2023, the Corporation changed the label of EBITDA to adjusted EBITDA to better describe the measure and better reflect the purpose of such measure. The composition of adjusted EBITDA remained unchanged and therefore no prior periods were restated.

Risks and Forward-Looking Information

The Corporation's financial and operational performance is potentially affected by a number of factors, including, but not limited to, the factors described in "Key Assumptions & Advisories".

This MD&A contains forward-looking information based on the Corporation's current expectations, estimates, projections, and assumptions. This information is subject to a number of risks and uncertainties, including those discussed in this MD&A and the Corporation's other disclosure documents, including the Corporation's AIF for the year ended June 30, 2023, which is available under the Corporation's SEDAR+ profile at www.sedarplus.ca, many of which are beyond the Corporation's control. Users of this information are cautioned that actual results may differ materially. See "Key Assumptions & Advisories" for information on material risk factors and assumptions underlying the Corporation's forward-looking information.

Who We Are

Through its network of commodity logistics centers and team of industry experts, Ceres merchandises high-quality North American agricultural commodities and value-added products and provides reliable supply chain logistics services to agricultural, energy, and industrial customers worldwide.

Ceres is headquartered in Golden Valley, MN and together with its wholly owned affiliates operates 11 facilities across Saskatchewan, Manitoba, and Minnesota. These facilities throughout North America have an aggregate grain and oilseed storage capacity of approximately 29 million bushels. The Corporation also owns membership interest in three agricultural joint ventures that have an aggregate grain and oilseed storage capacity of approximately 15.9 million bushels.

Ceres has a 50% interest in Savage Riverport, LLC ("Savage Riverport"), a joint venture with Consolidated Grain and Barge Co., a 50% interest in Farmers Grain, LLC ("Farmers Grain"), a joint venture with Farmer's Cooperative Grain and Seed Association ("Farmer's Co-op"), a 50% interest in Berthold Farmers Elevator, LLC ("BFE"), a joint venture with The Berthold Farmers Elevator Company ("BFEC"), a 50% interest in Gateway (as defined below), an unincorporated joint operation with Steel Reef Infrastructure Corp., a 25% interest in Stewart Southern Railway Inc. ("SSR"), a short-line railway located in southeast Saskatchewan with a range of 130 kilometers, and a 17% interest in Canterra Seeds Holdings Ltd., a Canadian-based seed development company.

Grain Segment

The Corporation's Grain segment is engaged in the procurement, storage, handling, trading, and merchandising of commodity and specialty grains and oilseeds such as hard red spring wheat, durum wheat, oats, canola, barley, and rye through its grain storage and handling facilities in Saskatchewan, Manitoba, and Minnesota. These facilities are strategically located, either close to where Ceres' core products are grown and sourced, or, at key supply chain locations to effectively serve customers and markets. Six of Ceres' grain storage facilities and four joint venture grain storage facilities are located on major rail lines across North America. One is located at a deep-water port on the Great Lakes allowing

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access to vessels and another facility is located on the Minnesota River with capacity to load barges for shipment down the Mississippi River to export terminals in New Orleans. These facilities combine to provide Ceres with efficient access to export and import flows of our core grains and oilseeds to North American and global markets. Approximately 25 million bushels of the Corporation's facilities' capacity are "regular" for delivery for both spring wheat against the Minneapolis Grain Exchange futures contract and oats against the Chicago Board of Trade futures contract. In addition, spring wheat and oats sourced by the Corporation out of Canada are eligible for delivery against respective futures contracts.

Supply Chain Services Segment

The Corporation's Supply Chain Services segment provides logistics services, storage, and transloading for non-agricultural commodities and industrial products. Ceres efficiently manages its supply chains and assets to ensure the optimization of storage and handling capacity and transportation costs and that high quality and value adding products are delivered to key customers and markets served.

Ceres' key Supply Chain Services assets is its terminal at Northgate, Saskatchewan ("Northgate"). Northgate sits on approximately 1,300 acres of land, and is designed to utilize two rail loops, each capable of handling unit trains of up to 120 railcars and two ladder tracks capable of handling up to 65 railcars. Northgate is a grain, oil, natural gas liquids and fertilizer terminal and is connected to the Burlington Northern Santa Fe Railway (the "BNSF"). The Corporation intends to further build out its infrastructure to support handling of other industrial products and equipment.

Ceres commenced its initial grain operations at Northgate in October 2014 and its grain elevator was fully operational in May 2016. As part of its grain operations, Ceres contracts grain and oilseed purchases from Western Canadian producers that are delivered by truck and unloaded at Northgate. Ceres has the option of storing the grain on-site, loading it into outbound railcars to end-users, or shipping to the Corporations' other facilities to take advantage of the value and strategic location of its current asset base.

In June 2019, Ceres established Gateway Energy Terminal ("Gateway"), a 50/50 unincorporated joint operation with Steel Reef Infrastructure Corp. located at Northgate. Gateway began operations on July 1, 2019 and handles the transloading of hydrocarbons at Northgate on an exclusive basis. Ceres' existing hydrocarbon transload contracts were transferred to Gateway as of July 1, 2019. Gateway's operations at Northgate provide a direct link for hydrocarbons to enter the U.S. market.

In November 2015, Ceres entered into an agreement with Koch Fertilizer Canada, ULC for the storage and handling of dry fertilizer products at Northgate's state-of-the-art,26,000-ton fertilizer storage terminal (the "Koch Agreement"). The fertilizer is loaded out by Ceres into trucks and distributed to Canadian retailers. The fertilizer operation commenced on April 30, 2017. On April 1, 2022, the Koch Agreement was renewed for an additional five-year term.

The Corporation continues to expand products transloaded at the Northgate facility including but not limited to barite, bentonite, solvents, drilling pipe, lumber, oriented strand board, and magnesium chloride.

Seed Retail and Processing Segment

The Corporation's Seed Retail and Processing segment was created through the acquisition of Delmar Commodities Ltd. ("Delmar") in August 2019 and consists of a soybean crush facility, located in a strong soybean producing region with low-cost origination driven by export economics, and a seed retail business located in Manitoba, Canada.

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1. FINANCIAL AND OPERATING SUMMARY

		Quarters Ended
		March 31,
(in thousands of USD except per share)		2024			2023
Revenues	$	212,319	$	287,912
Gross profit (loss)	$	7,770	$	5,513
Income (loss) from operations	$	2,781	$	339
Net income (loss)	$	985	$	(553)
Weighted average common shares outstanding		31,094,144			31,094,144
Diluted weighted average common shares outstanding		31,981,635			31,094,144
Income (loss) per share - Basic	$	0.03	$	(0.02)
Income (loss) per share - Diluted	$	0.03	$	(0.02)
Adjusted EBITDA (1)(3)	$	4,149	$	2,208
Return on shareholders' equity (1)		0.6%			(0.4)%
					As at
		As at			June 30,
	March 31, 2024			2023
Total assets	$	281,840	$	263,630
Total bank indebtedness, current	$	27,605	$	18,684
Term loan (2)	$	41,037	$	42,167
Shareholders' equity	$	151,590	$	142,658

1. Non-IFRSfinancial measures. See Non-IFRS Financial Measures and Reconciliations section.
2. Includes current portion of term loan.
3. Beginning in the second quarter of fiscal year 2023, the Corporation changed the label of EBITDA to Adjusted EBITDA to better describe the measure and better reflect the purpose of such measure. The composition of Adjusted EBITDA remained unchanged and therefore no prior periods were restated.

HIGHLIGHTS FOR THE QUARTER ENDED MARCH 31, 2024

• Gross profit for the quarter was $7.8 million, the second-best third quarter in the Corporation's history, up from $5.5 million in the previous year.
• Income from operations was $2.8 million, increasing 720.4% from $339 thousand in the prior year.
• Net income for the quarter was $1.0 million, up $1.5 million compared to the previous year.
• On February 12, 2024, the Corporation announced an exclusive agreement with Groupo Trimex, Mexico's largest flour miller, to collaboratively develop and execute regenerative agriculture initiatives for hard red spring wheat grown in Canada and the United States that is destined for Mexico.

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Overall Performance

The Corporation's net income was $985 thousand for the quarter ended March 31, 2024, compared to a net loss of $553 thousand for the quarter ended March 31, 2023. The net income in the third quarter of fiscal year 2024 was driven by higher grain gross margins across core commodities as well as the prior year being negatively impacted by legal expense related to the regulatory investigations ($948 thousand for the quarter ended March 31, 2023, and $6 thousand for the quarter ended March 31, 2024). Gross profit was $7.8 million for the quarter ended March 31, 2024, compared to a gross profit of $5.5 million for the quarter ending March 31, 2023, a result of higher gross margins in the Grain segment. Furthermore, income from operations was $2.8 million for the quarter ended March 31, 2024, compared to $339 thousand income from operations for the quarter ended March 31, 2023. The Grain segment's asset-based grain handling business is seasonal in nature in that the largest portion of the principal grains are harvested and delivered from the farm and commercial elevators typically in July through October (the first and second quarter of the fiscal year) for the commodities it trades and handles, although a significant portion of the principal grains are bought, sold, and handled throughout the year.

Revenues and Gross Profit

Total revenue decreased by $75.6 million, primarily due to fewer bushels merchandised compared to the same quarter in the prior year. The Corporation handled and traded 21.2 million bushels of grain and oilseed during the quarter ended March 31, 2024, compared to 27.4 million bushels for the quarter ended March 31, 2023. The decrease in bushels handled and traded is due to favorable market carries in the current year, which drove higher inventory levels at its terminal assets as well as the divestment of the Port Colborne facility in Q3 2023. In agriculture commodity markets, cost of sales generally follow increases or decreases in gross revenues. Ceres' Management believes it is more important to focus on changes in gross profits and volume handled rather than changes in revenue dollars.

The table below represents a summary of the components of gross profit for the three months ended March 31, 2024, and 2023:

								2024
				Supply Chain		Seed Retail
(in thousands of USD)		Grain			Services			and		Corporate			Total
							Processing
Net trading margin	$	10,508	$	-	$	-	$	-	$	10,508
Supply Chain Services
revenue		659			944			-			-			1,603
Net Seed Retail and
Processing margin		-			-			1,353			-			1,353
Operating expenses
included
in cost of sales		(2,839)			(441)			(946)			-			(4,226)
Depreciation expense
included
in cost of sales		(1,105)			(182)			(95)			(86)			(1,468)
Gross profit (loss)	$	7,223	$	321	$	312	$	(86)	$	7,770
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								2023
				Supply Chain		Seed Retail
(in thousands of USD)		Grain			Services			and		Corporate			Total
							Processing
Net trading margin	$	7,582	$	-	$	-	$	-	$	7,582
Supply Chain Services
revenue		1,211			836			-			-			2,047
Net Seed Retail and
Processing margin		-			-			1,658			-			1,658
Operating expenses
included
in cost of sales		(3,178)			(241)			(871)			-			(4,290)
Depreciation expense
included
in cost of sales		(1,224)			(86)			(84)			(90)			(1,484)
Gross profit (loss)	$	4,391		$	509		$	703		$	(90)		$	5,513

Gross profit increased by $2.3 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase in gross profit was driven by higher gross margins in the grain segment.

Net Trading Margin

Net trading margin increased by $2.9 million for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023. The increase was driven by increased margin opportunities across core commodities.

Supply Chain Services Revenue

Supply Chain Services revenue decreased by $444 thousand for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023. The Corporation's grain-related Supply Chain Services revenue decreased $552 thousand due to lower third-party storage and elevations. The three months ended March 31, 2023, includes third party storage revenue from the Corporation's Port Colborne facility which was sold in February 2023. For the quarter ended March 31, 2024, the non-grain supply chain service revenue increased $108 thousand compared to the same quarter in the previous year.

Net Seed Retail and Processing Margin

Net Seed Retail and Processing margin was $1.4 million for the quarter ended March 31, 2024, compared to $1.7 million for the quarter ended March 31, 2023. The quarter ended March 31, 2023, included margins from the seed distribution activities which were discontinued in June 2023.

Operating Expenses and Depreciation

For the quarter ended March 31, 2024, operating and depreciation expense included in cost of sales totaled $5.7 million compared to $5.8 million for the quarter ended March 31, 2023, which is consistent period over period. Depreciation for the three-month period ended March 31, 2024, decreased by $16 thousand quarter over quarter.

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General and Administrative Expenses

For the quarter ended March 31, 2024, general and administrative expenses totaled $5.0 million compared to $5.2 million in the quarter ended March 31, 2023. General and administrative expenses decreased due to reduced legal fees related to the regulatory investigations (2024: $6 thousand; 2023: $948 thousand) partially offset by a higher incentive accrual in the third quarter of fiscal year 2024.

Finance Income (Loss)

For the quarter ended March 31, 2024, finance loss totaled $20 thousand compared to finance income of $70 thousand during the quarter ended March 31, 2023. Finance income (loss) is composed of realized and unrealized gains and losses on foreign exchange transactions and currency hedging transactions along with revaluation gains of portfolio investments.

Interest Expense
		Quarter ended March 31,
(in thousands of USD except per share)		2024			2023
Interest on bank indebtedness	$	(778)	$	(724)
Interest on term loan		(938)			(896)
Interest on term loan swap		305			265
Interest attributable to repurchase obligations		(13)			-
Interest attributable to leases		(32)			(38)
Amortization of financing costs paid		(178)			(181)
Interest on other financing obligations		35			(40)
Total interest expense	$	(1,599)		$	(1,614)

For the quarter ended March 31, 2024, interest expense totaled $1.6 million compared to $1.6 million for the quarter ended March 31, 2023. The increase in interest on bank indebtedness was driven by higher average SOFR rates on the Corporation's revolving credit facility. The increased interest expense on the term loan is offset by the increased term loan swap interest.

Amortization of Intangible Assets

Amortization of intangible assets totaled $62 thousand for the three months ended March 31, 2024, and $62 thousand for the three months ended March 31, 2023. Amortization for the quarter was comprised solely of the amortization of intangible assets related to the Delmar acquisition including customer relationships, producer relationships, and trademarks/tradenames.

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Income Tax (Expense) Recovery

The following table presents income tax (expense) recovery for the three months ended March 31, 2024, and 2023:

		March 31,		March 31,
(in thousands of USD)		2024		2023
Current income tax (expense) recovery	$	-	$	120
Deferred tax (expense) recovery		(627)		(2)
Income tax (expense) recovery	$	(627)	$	118

During the quarter ended March 31, 2024, the Corporation recorded income tax expense of $627 thousand compared to an income tax recovery of $118 thousand for the quarter ended March 31, 2023. During the quarter ended March 31, 2024, Ceres recognized deferred income tax expense of $627 thousand.

Share of Net Income (Loss) in Investments in Associates

The following table presents share of net income (loss) in investment in associates for the three months ended March 31, 2024, and 2023:

		March 31,		March 31,
(in thousands of USD)		2024		2023
Savage Riverport	$	110	$	(97)
Farmers Grain		561		(874)
BFE		31		166
SSR		(5)		(16)
Share of income (loss) in investment in associates	$	697	$	(821)

For the quarter ended March 31, 2024, the Corporation's share in investments in associates was income of $697 thousand compared to a loss of $821 thousand for the quarter ended March 31, 2023. The increase in investments in associates is driven by increased income at Savage Riverport and Farmers Grain partially offset by decreased income from BFE.

On April 30, 2018, the Corporation formed Savage Riverport and transferred the grain elevator and related assets at its Savage, Minnesota facility, which had net book value of $9.3 million as at April 30, 2018, to the newly formed entity. Subsequent to the transaction, Ceres received cash of $8.5 million from Consolidated Grain and Barge Co. in exchange for 50% of the equity in Savage Riverport, of which, $2.0 million was utilized to pay down the term debt. The sale of the equity in Savage Riverport net of transaction fees resulted in a gain of $3.7 million. The Corporation has been and will continue to recognize the remaining gain of $3.8 million over the useful life of the contributed assets. For both quarters ended, March 31, 2024, and March 31, 2023, the Corporation recognized a deferred gain of $87 thousand, under share of net income (loss) of associates.

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For the nine-month periods ended March 31, 2024, and March 31, 2023

The following financial data has been prepared in accordance with IFRS.

		Nine months ended
		March 31,
(in thousands of USD except per share)		2024			2023
Revenues	$	710,519	$	831,051
Gross profit (loss)	$	29,808	$	17,825
Income (loss) from operations	$	15,533	$	(864)
Net income (loss)	$	9,861	$	(5,408)
Weighted average common shares outstanding		31,094,144			31,053,308
Diluted weighted average common shares outstanding		31,994,923			31,053,308
Income (loss) per share - Basic	$	0.32	$	(0.17)
Income (loss) per share - Diluted	$	0.31	$	(0.17)
Adjusted EBITDA (1)(3)	$	19,629	$	4,442
Return on shareholders' equity (1)		6.5%			(3.7)%
		As at			As at
	March 31, 2024			June 30,
					2023
Total assets	$	281,840	$	263,630
Total bank indebtedness, current	$	27,605	$	18,684
Term loan (2)	$	41,037	$	42,167
Shareholders' equity	$	151,590	$	142,658

1. Non-IFRSfinancial measures. See Non-IFRS Financial Measures and Reconciliations section.
2. Includes current portion of term loan.
3. Beginning in the second quarter of fiscal year 2023, the Corporation changed the label of EBITDA to Adjusted EBITDA to better describe the measure and better reflect the purpose of such measure. The composition of Adjusted EBITDA remained unchanged and therefore no prior periods were restated.

Overall Performance

The Corporation's net income was $9.9 million for the nine months ended March 31, 2024, compared to a net loss of $5.4 million for the nine months ended March 31, 2023. Net income in fiscal year 2024 was driven by higher grain and seed retail and processing gross margins as well as the prior year being negatively impacted by employee severance related to cost reduction measures ($2.4 million for the nine months ended March 31, 2023) and legal expenses related to the regulatory investigations ($4.4 million for the period ended March 31, 2023; $259 thousand for the period ended March 31, 2024). Gross profit was $29.8 million for the nine-month period ended March 31, 2024, compared to a gross profit of $17.8 million for the nine-month period ended March 31, 2023, a result of increased margin opportunities on both Ceres' core grains and soybean crush. Furthermore, income from operations was $15.5 million for the nine months ended March 31, 2024, compared to a loss of $864 thousand from operations for the nine months ended March 31, 2023. The Grain segment's asset-based grain handling business is seasonal in nature in that the largest portion of the principal grains are harvested and delivered from the farm and commercial elevators typically in July through October (the first and second quarter of the fiscal year) for the commodities it trades and handles, although a significant portion of the principal grains are bought, sold, and handled throughout the year.

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Revenues and Gross Profit

Total revenue decreased by $120.5 million, primarily due to lower core commodities prices compared to the same period in the prior year as well as a decrease in bushels merchandised. The Corporation handled and traded 76.4 million bushels of grain and oilseed during the nine months ended March 31, 2024, compared to 84.2 million bushels for the nine months ended March 31, 2023. In agriculture commodity markets, cost of sales generally follow increases or decreases in gross revenues. Ceres' Management believes it is more important to focus on changes in gross profits and volume handled rather than changes in revenue dollars.

The table below represents a summary of the components of gross profit for the nine months ended March 31, 2024, and 2023:

										2024
					Supply Chain			Seed Retail
(in thousands of USD)	Grain				Services				and		Corporate				Total
									Processing
Net trading margin	$ 34,718	$	-	$	-	$	-	$	34,718
Supply Chain Services
revenue	2,418				2,750				-			-				5,168
Net Seed Retail and
Processing margin	-				-				6,617			-				6,617
Operating expenses
included
in cost of sales	(8,289)				(1,288)				(2,691)			-				(12,268)
Depreciation expense
included
in cost of sales	(3,329)				(553)				(286)			(259)				(4,427)
Gross profit (loss)	$ 25,518	$	909	$	3,640			$(259)	$	29,808
										2023
					Supply Chain			Seed Retail
(in thousands of USD)	Grain				Services				and		Corporate				Total
									Processing
Net trading margin	$ 25,317	$	-	$	-	$	-	$	25,317
Supply Chain Services
revenue	3,525				2,531				-			-				6,056
Net Seed Retail and
Processing margin	-				-				3,966			-				3,966
Operating expenses
included
in cost of sales	(8,956)				(1,499)				(2,600)			-				(13,055)
Depreciation expense
included
in cost of sales	(3,375)				(572)				(242)			(270)				(4,459)
Gross profit (loss)	$ 16,511	$	460	$	1,124			$(270)	$	17,825
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