For the quarter ended June 30, 2011, net earnings were $381m, down $ 65 million. However, its wheat milling and cocoa division recorded profits of $192m, an increase of $64m from the same period in 2010.
The group estimates that there is an adequate global supply of wheat citing a forecast of 182 million metric tonnes for global wheat ending stocks, but notes “some quality issues.”
On the demand side, said ADM, it sees “continuing good global demand for grain.”
Wheat milling, continued the agri-commodities group, is at good capacity utilization in the US and Canada but ADM reports “softer conditions” in the UK.
In terms of cocoa production, ADM reports that conditions in world’s largest cocoa bean grower, the Ivory Coast, have “substantially stabilized”, and added that it has fully resumed its resourcing and processing operations there.
“Cocoa powder demand is strong, and spot cocoa processing margins remain strong as well,” added the processor.
Sweeteners and starches
Meanwhile, soaring grain prices put pressure on the company’s corn processing business, driving up costs for starches and other food ingredients.
It recorded a massive $110m drop in sweeteners and starches operating profit for its fourth quarter, saying that higher average selling prices and sales volumes “were more than offset by higher net corn costs.”
But ADM claims export demand for sweeteners remained strong.
It added that profit from ethanol production climbed sharply based on high oil and fuel prices.