31 July 2012 18:05 [Source: ICIS news]
HOUSTON (ICIS)--US agribusiness Archer Daniels Midland (ADM) on Tuesday said it will rely on its extensive global operations as it works through currently tight markets and high prices for corn, soybeans and other commodities.
"While drought has reduced the potential size of the US corn crop, we are tracking the development of other crops in North America and Europe," said ADM Chief Executive Officer Patricia Woertz in a conference call with investors.
"As weather has regional effects on crops, we respond by working with our customers to provide the best alternatives to meet their needs from all growing regions of the world," Woertz said.
Earlier Tuesday, ADM reported that fiscal fourth-quarter net earnings fell 25% year on year to $284m (€233m), largely on the back of negative US ethanol margins.
ADM's net sales during the quarter fell 0.9% year on year to $22.7bn.
“In a challenging fourth quarter, solid results from our global oilseeds business, particularly in South America, were more than offset by negative US ethanol margins and weaker US merchandising results,” said Woertz.
The ADM executive noted that ethanol inventories are starting to come down as production is curtailed, and although margins are still negative, they are improving.
"Margins are expected to turn positive later in the current quarter, despite high corn prices," Woertz said.
"Even if US gas demand is flat or slightly down, ethanol production should be stable because of the production mandate of the Renewable Fuels Standard," said Woertz.
While a low water level in the Mississippi river is somewhat restricting barge traffic, ADM said it is loading barges to a 9-foot (3-metre) draft and does not expect the river to be shut down.
Dredging is occurring in spots where it is needed, and while specific locations on the river may be closed down for a day, it is able to quickly resume, ADM said.
($1 = €0.82)
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