Good day ladies and gentlemen and welcome to the Archer Daniels Midland Company Q&A conference call. (Operator Instructions) I would now like to turn the presentation over to Mr. Dwight Grimestad, Vice President, Investor Relations. Please proceed, sir.

Thank you, [Merisel]. Good morning and welcome to ADM’s first quarter Earnings Call. Before we begin, I would like to remind you that we are webcasting this presentation on our website adm.com. The replay will also be available at that address. For those following the presentation, please turn to slide two for the company’s Safe Harbor statement, which says that some of the comments constitutes forward-looking statements that reflect managements current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Statements are based on many assumptions and factors, including availability and prices of raw materials, markets conditions, operating efficiencies, access to capital and actions of governments. Any changes in such assumptions or factors could produce significantly different results. To the extent permitted under applicable law, the company assumes no obligation to update any forward-looking statements as a result of new information or future events. Slide three lists the matters we will discuss in our conference call today. And I will now turn the call over to our Chairman and Chief Executive Officer, Pat Woertz.

Thank you, Dwight and good morning everyone. I will begin with safety first. During the first quarter we reduced our lost workday entry rate by 36%, and our total recordable incident rate by 7% compared to the full-year fiscal 2009. And we continue our program to implement values based safety at our facilities globally. Turning to our financial results, this morning we reported quarterly net earnings of 496 million or $0.77 per share. I believe the ADM team executed well delivering strong sequential earnings growth. Earnings were significantly better than the second half of fiscal 2009. And as we said during our last call, we did see overall operating conditions in the quarter improving. Declines in demand for food, feed and fuel seem to be bottoming. And in this environment our team executed well capturing and maximizing opportunities. Now our segment results were mixed compared to last years first quarter, which as you will recall was ADM’s best quarter ever and Steve will report on those results in just a moment. So let me turn to strategy. Since our last call we have executed on our growth strategy. In July we began operations at our new Cocoa processing facility in Kumasi, Ghana. This facility will improve our access to a key growing region in West Africa. We have taken delivery of five ocean going vessels, enhancing our flexibility and efficiency by adding 250,000 metric ton of cargo capacity to our transportation network. We acquired an oilseeds processing plant in Olomouc in the Czech Republic. This will improve our access to the central European market and expand our origination footprint. Just this week we began production at our new Columbus, Nebraska ethanol plant. This plants scale and integration with the company’s existing infrastructure gives at a cost efficient position as the industry meets the increased 2010 ethanol mandate. Our Clinton, Iowa cogeneration facility is up and running, it provides cost effective process team and electricity to our facility there. In Brazil we began production at our first sugarcane ethanol plant, creating capacity to meet the growing Brazilian demand for renewable fuel. We completed repairs and brought back online our Galveston grain export terminal that was damaged last year by Hurricane Ike. And we reorganized our commercial and production group in their core clearly defined business units and we named new presidents to lead these units. As we advanced our growth strategy you can see we are using our financial strength to build shareholder value. Looking ahead we’ll talk in a moment about each segment and we do see demand improving in some key markets and I truly believe we have the assets and acumen to capture value as the global economy resets. Now I’ll hand the call over to the Steve.

Thanks, Pat and good morning, everyone. Turning to slide five, slide five reflects our financial highlights for this quarter. Segment operating profit was 774 million, compared to just under 1.2 billion a year ago. And we'll discuss in more detail in a moment those results on a segment-by-segment basis. Quarterly net earnings and earnings per share decreased 53% and 52% respectively from last year's record levels, due to lower segment operating profits and to reduce LIFO credits. Our tax rate for the quarter was up just slightly from last year's first quarter rate with no unusual items. And as you can see from the waterfall chart, we didn't have any notable items this quarter other than LIFO, which had a 47 million or $0.07 after tax favorable impact on earnings and EPS. I also want to call your attention to the fact that we've had to restate our prior period financials due to the adoption of a couple of new accounting rules. The first change relates to how we account for the convertible debt securities we issued back in 2007. Under this new guidance these securities need to be bifurcated into a debt component and an equity component. Each of those have a different accounting treatment. The restatement resulted in a decrease in long-term debt and increase in shareholders equity on the balance sheet, and we've had to book additional interest expense through the income statement going back to the inception of the debt. And the other much less significant change for us deals with the introduction of a different presentation format, that involves less than wholly owned consolidated subsidiaries, which are now referred to as non-controlling interest and have to be broken out separate in the financial statement. A little more information these changes were fully described in note…

Thank you, Steve. John Rice will join Steve and I for the Q &A. So operator you can open the line for questions, please.

(Operator Instruction). Our first question comes from the line of Christine McCracken from Cleveland Research. Please proceed.

You called out this delayed harvest as obviously a big factor in your results this quarter, clearly it's still coming out of the ground slowly, and I think you mentioned it could take a couple months here before we get it all out of the ground. A couple of questions. First, do you expect to see kind of similar results in terms of volumes has been through your next quarter, and then secondly, we've kind of heard of some spot shortages of corn, guys running out of corn? Could you fill in and actually see a benefit from having some corn in storage?

Well, Christine, I think we didn't talk much about the impact of the delayed harvest on this particular quarter. It always makes some difference, as we roll from old crop to new crop. And we are also interested in how the harvest is going to unfold. We’re glad to see sunny whether here in the Midwest here this week. I think John has a couple of comments about I think John has a couple of comments about the corn situation and the impact of the harvest.

Well, the overall volumes, Christine is, we expect to have actually better volumes this year than last year, just because we have larger crops. We're seeing very good export demand on the soybean side of the business. Corn is a little bit slower than what we anticipated, but there's cheaper corn in other places around the world, but we do expect our export assets to run close to capacity this year. In terms of corn shortage and spot shortages, certain areas we've seen that. We've had that. Just because we've had so much rain. Here in Decatur I think we've had over 10 inches of rain in the month of October. So we haven't been able to get the corn out. But with our network we've been able to move corn from one area to the other area without having any real concerns. But now we have a dry forecast and hopefully farmers will get back in the field and actually we saw them in the fields yesterday.

All right, so you haven't been able to get any real benefit or arbitrage benefit just from having availability of corn in the current situation?

We've been arbitraging from one area to the other part of the country right now, but I will not call it a benefit until we really get more of the harvest going.

And just one quick question then on the quality of the crop, given the moisture levels. We heard it might affect the starch content. Can you talk about how that might effect your processing business and whether or not it's a benefit or a negative?

We are seeing more damaged corn coming in, higher screenings also. The actual starch content has a little bit of variance, but we haven't seen any difference between this year's variance and last year's variance.

Our next question comes from the line of Vincent Andrews from Morgan Stanley.

Maybe we could talk a little bit about sweetener contracts for next year and just sort of where your expectations are there in terms of operating profit per unit. It seems like prices are likely to go down year-over-year, but can you give us any sense of how those talks are proceeding, how industrial demand is picking up. I noticed that you mentioned that volume to Mexico was up, but when you look at the totality of demand, how are things shaping up?

We are seeing reduced demand, but due to high sugar prices here in the United States and also in Mexico we are seeing more interest in people switching out of sugar, putting more fructose in with their sugar blends. And like I mentioned we are seeing the increased demand to Mexico, and hopefully that will offset the reduction in demand we're seeing here in the United States. Contracting is we're over 50% done currently for this year, but it's still too early to say anything about the pricing or how we are going to seeing how, 2010 will come on until our February call.

But you're not concerned about (inaudible) you are not concerned about incremental costs from lower starch or conversion rates at this point, is that right?

No, we're not.

You are not. Okay, and then maybe one other question, which is the when you talked about the soy crop and how your business performed in the quarter. It seems like there's going to be a big crop coming out of the US and ultimately a big crop coming out of South America. But the discussion from protein meal demand, it sounds like supply is going to grow in excess of demand. And so to me that means your utilizations go up but probably crush margins go down and so that's probably not a net benefit for you. Am I think about that correctly?

I think it's a timing issue. I think until the south American crop is harvested and we fill the pipe line and the plant from South America can come on to capacity, the potential for that to happen is there, yes. But I think between now and whenever the crop comes on, you call it March, April, I think the crush margins in the United States and Europe could be (inaudible).

Our next question comes from the line of David Driscoll from Citi Investment Research. Please proceed.

I wanted to ask a question myself about the Ag services outlook. So the US corn and soy crop are very late as you have mentioned but numerically corn according to the USDA from their report yesterday is 25% harvested versus 71%, normally soy 51% harvested versus 87% normally. I would assume that your storage and transport operations are hurt by these events as you normally would be generating large storage revenues. So first, is this correct? And then secondly, can you just give us a bit more color on how one should think about agricultural services for the December. So just the next three months?

I’ll start David and pass it on to John. We’re going to handle a large crop. We’ll start with that. Timing is a question. We know here that the US farmer can move through the crops pretty quickly once they get into the fields and get that get that crop out of the ground. The opportunities mix changes when you have had this kind of situation and it’s more about timing and I think John wants to chime in here a little bit about that.

No. I agree. We’ll have to fill the pipeline it will take us a little bit longer to fill the pipeline. We will not probably put as much corn on the ground this year we have in previous years. But the seeds point, it’s all timing when we handle the crop we feel we are still going to handle more bushels than last year. The transportation system, we have not been running to capacity like we did when you have a quick harvest, but we still see the potential for that’s to have a pretty good year also.

John, would you agree then that timing of how the profit’s coming or likely differences go around. Whereas the December quarter is lower because you just didn’t bring crop in October like it normally would have even today, it’s still way behind schedule. So, yes, we’re going to harvest it but the revenues from that will show up on delayed basis, i.e. they will show up more into calendar Q1 of next year. Is that more or less the right way to think about this?

I don't know if I totally agree with that, just because there's so many different variables that can come into play. If the crop does get harvested and we have a fairly quick harvest here to end the crop or to end the harvest, we will have some more basis opportunities. What we're seeing this year is maybe more drying income and less basis opportunities, just because we're not able to buy and accumulate much of the crop. It's hard to say, but we are seeing good export demand on the soybean side. But we're exporting little bit of wheat, we’re exporting wheat out of Europe also. So it's a little hard to say, I guess, David, but I can't argue with your thinking.

One final question on this is just the idea that with such a late harvest, you really don't have great historical precedent for where we are right now. I am concerned that we actually see yield degradation because of the lateness and because of the moisture levels there's like two separate issues here going on, soy with the moisture and corn with the lateness of the harvest and maturity problem. Would you generally agree here that the bias for prices, and this goes to your LIFO accounting, the bias for prices is up, just given this odd situation with the lateness of harvest?

No, we have so many factors. South American crop, we have great weather conditions right now, plantings are going very well. So I think the market will start focusing on how the South American weather is, as opposed to the US. And right now the weather forecast looks very good that we'll harvest the crop and still have very good volumes.

Great.

I would also mention that we've added additional drawing capacity preparing for this crop at eight different locations so that should also help from the moisture perspective.

Yes. I have no concept of significant that revenue stream could be. You’ve called it out a number of times so am I might right in assuming that this is a material number on drawing revenues?

I might not use the word material but its significant to the network being able to operate and cross operate so to speak at different locations.

Okay.

[Then what] will help us David is we maybe handle more volume just because we’ve increased our drawing capacity so we maybe able to bring in more corn where the elevator down the road may not be able to handle it.

Our next question comes from the line of Kenneth Zaslow, BMO Capital Markets. Please proceed.

Hey over the last three years ADM has spent somewhere more than $4 billion in CapEx and PP&E has kind of going up by about 2.5 billion almost $2.4 billion. Can you talk about your return expectations and what is a timing of this, because this seems to be something, with all the spending coming down the pike are we going to start to see the power of earnings a little bit better. I know if I want talk about the near-term crop, can we talk about a little bit further out and how your return investments are going?

That’s a great question, Ken and the timing of your question is excellent, because the majority of that capital spending is on the cost of coming on line. As Pat mentioned the Clinton Co-Gen has started up and the Columbus ethanol and Co-Gen are just getting started and the other big plants are coming here over the next six-month period, I think expect for Cedar Rapids, which you’ve gotten little further outlined. So I think the question of turning this pre-productive capital into the returns that we expect is right here now and we’re expecting to start seeing those benefits in a very short-term especially as we look at positive margins in a variety of these areas.

And I might add to that too that once all the sort of big seven get up and running we thought we do a look back so to speak for you as well. So you can actually be able to see the earnings trail as well as potentially some of the returns associated with that and they all won’t be in place for another year and running consistently. But I think that those are good questions and over the long-term we should be able to see this capital investment perform for us.

Let me just kind of make sure I understand this. So the majority of the returns you have not realized in your numbers yet?

That's right. They're just, in fact there's plants starting up this week, as we said.

And then is it fair to say that calendar ‘10 you would start to see some returns on and again not fiscal, but calendar ‘10, you should start to see some returns, hopefully closer to your historical rate on this investment? Is that a fair thought?

I think there is two points there, Ken. One is we are getting these plants started up, which almost by definition they're significant, they’re big plants, they take a little time to get up and running. I think on the bigger question of what those returns will show, it somewhat is going to be dependent on the market conditions, and we think that these assets will get the returns over a period of time. We're going to have to see what the market conditions are when we get them as and when they get turned on as we move through the calendar here. I think the other point I wanted to make was we have, as always we've been spending some money all along and those returns get put into the mix, but as we've said, the major projects are on their way.

Okay. The second question I have, or probably the third question, I guess if you adding up properly. The other business, wheat, can you talk about, is this -- not like unlike your other business, but this happens to be very volatile as well. Is there a steady state that we've reached, or is this something that next quarter could be back down to what we had last quarter? Is there something that’s structurally improved? Is there something that we should be using like this type of quarterly number going forward? Can you give us a little color on actually what happened?

Oh we just went through harvest in wheat, and this year we are seeing a little bit lower protein, so our transportation system will have to move wheat from different parts of the country to (inaudible) the quality. So we are seeing steady demand in the last two years I would say in wheat in the flour business. So I guess?

I think we had the other piece of that is cocoa, there’s two other pieces I guess. One, we've had Gruma in the mix there. Of course, we've had the issues with Gruma's derivative losses over the last year. It was encouraging to see a better result this quarter as we have again stated about Gruma. Their underlying businesses has been performing well. The other large component to other is cocoa processing, and cocoa at this point in time is in the midst of some relatively difficult conditions. Demand is down, especially on the chocolate side, as both high cocoa prices and high sugar prices has impacted that side of thing. So it's, like our other businesses, Ken, it's hard to tell where things are going, but as John pointed out that the wheat milling has been pretty consistent here as of like, cocoa has probably a little more -- we need conditions to improve there and then Gruma has bottomed out from the derivative losses, and we're back to something normal.

Is any or part of the business is getting worse?

That's I guess my question. I don't think it's getting worse. But again, that's kind of the nature of the business especially I said especially that I don't want to oversell the fact that the cocoa demand is down, and that it's having a little more difficulty in that marketplace.

Our next question comes from the line of Christina McGlone from Deutsche Bank. Please proceed.

John, you talked about before pretty high capacity utilization in oil seeds in North America, because of the tightness in South America, and I'm wondering, we're hearing reports about basically the soybean meal kind of getting stuck in facilities because it's so wet. Is that slowing things down? Does that alter the quality and the moisture content of the crop? Does that alter your view about high levels of utilization?

No. I guess I haven't heard that myself. But when you process, even if the beans come in wet, through the (inaudible) through the dryings the DTDC you will end up taking the meal moisture down to whatever is in the specification. So just because you have a wet crop doesn't that fairly mean the products coming out will be any wetter.

Okay. So utilization levels still should be as high as you were talking about before?

I think utilization levels, we're seeing very good export interest on protein demand right now, and I think as long as the South American Argentine crush is lower than expectations, I think the US will to have run at a higher capacity just to offset the deficit in South America.

Okay. Thank you. And then in terms of bioproducts, the loss in the quarter, you mentioned industrial chemicals start-up costs and sugar business. I'm curious are those startup costs done, or do they spill into the fiscal second quarter? And is the industrial chemical business is that PHA or is that ethylene glycol? Can you just give more information about that?

I think the answer to all those questions was yes. I will try to repeat them. The industrial chemical business is in start-up mode. We believe the factories are producing products here in the first calendar quarter of the New Year right as we move over into calendar '10. So probably in ethylene glycol, I think PHA is that same timeframe. So that's the industrial chemical side. Sugar is just getting started as we speak, and it's going to -- it takes awhile to get that ramped up as well. So we expect those to take a bit of time to get flushed out.

So will start-up costs then spill over into this basically second quarter? I mean, are we…

Yes.

…what we see what ethanols, you said ethanol margins are positive and will we be able to see that, or will they be masked by the start-up costs again?

Well, we'll have to see. We're encouraged by where ethanol margins have gone, and we'll just to have see where they end up.

Christina, one thing I just want to remind everybody, we do charge our ethanol division in our bioproducts division, a up-charge for their corn or (inaudible) that they use.

Okay. And then I guess just last question, Steve, it looks like Wilmar pulled the Chinese IPO. So can you talk about what that means for ADM in terms of cash flow and anything else?

You're right, they pulled their IPO. And it's not going to have any impact to our cash flows at all. And Wilmar, I guess I would ask you to look at Wilmar's comments on that, but it has no impact on our cash flows here.

What is their tax implications associated with monetizing that, or is that different?

It’s different; it's a different issue that tax issue relates to ADM's ownership of Wilmar's shares and the reorganization of that ownership. So it's different than Wilmar's Chinese IPO.

Our next question comes from the line of Diane Geissler from CLSA. Please proceed.

I'm glad you brought up basis. I mean you brought it up twice with regard to the oilseed results year-over-year, and then with regard to the just the crop in general. Could you talk a, I mean I just sort of have this picture of the crop, we get a dry spell, the crop kind of comes in all at once. You have the capacity to handle it more of it than, say, the elevator down the road as you termed it. What should we be looking for in terms of basis potential in the December quarter?

That's a good question. It's hard to say just because of how the crop has been harvested. The US had a very good book of soybeans starting in September shipments out of the United States. So we are a little bit behind. So I don't know if we'll ever see that real harvest pressure that we usually saw in the past years. But the basis levels could actually just be higher this year as opposed to normal years which still gives us some ability on the basis. But right now it's just a little bit hard to say, is just because of the way harvest isn’t coming.

Okay, anything particular to corn?

Corn is the same way. We have spot areas in the country like I mentioned here in Decatur, where we've had a lot of rain. We've had to ship in corn from other places. Then you get out to Nebraska and harvest has come on very well. But with our transportation network, it really helps us in logistics and we're able to handle these markets a lot better.

I appreciate the commentary. And then on the fructose pricing, you mentioned you were about 50% done on contracts for next year. Can you remind us where you were this time last year?

I can't, because I can't remember. I am sorry.

Neither can I, which is why I asked.

I guess none of us sitting here can specifically…

We'll have to look back on that one for you, Diane.

I guess, what's behind that question is, do you think that certain manufacturers are holding back waiting to see what happens with the crop I mean that’s always a game between what price do you give me versus, can I buy it myself and have you told it, and I play the numbers game internal. So I guess how does those lateness of the crop [cuts] dynamic within the discussions?

Well, when we saw corn down in the low $3, we saw more interest. When corn rallied up to four, people started to sit back and not have as much interest in booking next year and corn fell back to the 350. So I think it's more of a price issue, and how it is and how they actually see the crop coming.

Okay. And how does demand relate to that? Because obviously the carbonated soft drinks, demand has been down there. Is it just a waiting game? They wait until the absolute last moment to contract?

I guess I don't know how to answer that. Just because each customer is different and what they're looking at, what they have budgeted. What they're looking for next year’s demand. So I think each company is different. So I guess I don't know what else to say.

Okay. Fair enough. And then I guess maybe for Pat, just to piggyback on Ken's CapEx questions. You're going to finish your projects this year, and then you're going to have an incredible amount of cash flow, that just kind of you're going to be throwing off cash if the project start returning the way they should be returning. What is your strategic, what are you going to do with that?

It's about growth and earnings growth, Diane. So we will continue to look at opportunities to fill in our global footprint, as we've talked about adding to that global footprint which we've done incrementally here, but we continue to believe that growth in this business and adding to ADM's network is critically important for the shareholder to get that value, and so we will continue to look for profitable growth.

Okay. Is that fair to assume that you're not going to have seven large projects going on simultaneously?

You know, I think that's not only fair, but there is always the opportunity of build versus buy, and incrementally adding to your capacity where it makes sense to do, so but I think we've done our major big seven here, and I don't think you'd find that necessarily in the future, but you could find some opportunities for sizable growth.

Our next question comes from the line of Robert Moskow from Credit Suisse. Please proceed.

Can I just clarify, you said that the start-up costs in industrial chemicals and sugar impacted your bioproducts profits on the quarter. Is that true?

That's true.

Okay. And that's because of this charge-back on glycol or starch, or whatever it is in bioproducts?

No. That's two different subjects. We have start-up costs on the industrial chemicals and the sugar. The…

Two different projects.

These are new projects. The comment that John made regarding the up-charge is that the sweeteners and starch group is where we begin most all of the grind for the corn division, and we sell the dextrose over to the bioproducts group and the various products in there with an up charge. So you look at the whole corn processing P&L it's not an impact but sweeteners and starches are going to benefit for the dextrose its used by the products made in the bioproducts group including ethanol?

So just for clarity again, we'll repeat. Two of those major seven projects are industrial chemicals projects, the PHA plants and the propylene ethylene glycol plant, so it's start-up on those two plants that Steve referred to that are in the bioproducts segment.

Okay, so the Columbus in Nebraska start-up was not one of those that you mentioned. So no incremental start-up cost there?

Oh, yeah, it has well but of course, that's an ethanol plant which I think is not considered industrial chemicals, but it of course that’s an industrial plant and there were start-up costs for that plant in that segment this quarter as well, yes.

That’s a good point.

Okay, so that was the third element. The reason I ask you is that I was a little surprised to see that the number as a negative in the quarter Valero reported positive profits in the quarter about $0.20 a gallon in dry milling ethanol, and I always considered ADM to have a cost advantage and a logistics advantage to other ethanol procedures. I know the spot margins didn't look that great in the quarter, and they are getting better, but can you give us a little more evidence that in future quarters that your margins in ethanol should be better than your competition, like a Valero, especially since you are in wet milling too. I always thought wet milling is just structurally higher in margins?

The ethanol business is profitable. It's just the transfer pricing on how that gets accounted, which makes it a little difficult for us to be able to show what the profitability, I guess Steve its…

Well, and I think to John's point there's a couple things once the other products that we do run through bioproducts, including lysine and these other products as John pointed out it’s not always going to be apple-on-apples with our competitors, because of the transfer pricing between sweeteners and starches and ethanol. It's safe to say that ethanol on the ongoing business for us during the quarter was profitable.

Okay. So is this just -- I thought actually that going forward because your hedges had kind of rolled over that spot margins in ethanol would be a better reflection of how you're doing in the ethanol business. But it sounds like this transfer pricing is always going to be an issue. Under what conditions should we think that transfer pricing might actually be a positive to your bioproducts division compared to others, or will it ever be?

It would never be under this context, because the way we count for that is if there is a mark-up on the dextrose that comes from sweeteners and starches. It doesn't have anything to do necessarily with the corn; it's for the manufacturing cost to produce dextrose.

And it's sold over at market price.

Okay. So your advice to us is look at the spot margin, certainly directionally, but don't take it as gospel for what you're going to be able to report?

And they we're consistent on how we handled internally, so as we trend that will appear in our results.

Okay. And then just lastly, if I could hit on David Driscoll's point about the possibility of revenue getting pushed out in the Agricultural Services division. It just seems intuitively that if we have a later crop that means revenues come in later as well, and profits come in later as well. So I thought the quarter in Ag services was very, very good in terms of profits. And but why shouldn't we expect profits to continue to rise and momentum to continue to rise there since it's a later crop?

No, I think handling the logical answer to that is that the later it comes in, the more push-back the handling part of that particular commodity will happen. We're trading commodities each and everyday, and that's going to have an impact on that P&L as well as we trade around the asset base that we have. So as we said, there's a lot of moving parts in Ag services, and…

But I might build on that, Rob. This is exactly what we do for a living. We deal with this everyday, every quarter, and if it takes a couple quarters to get a crop in, it does so. It’s what we do. It's what the, so to speak the good people of ADM do everyday. And I think Ag Services is always one of those areas that's hard to talk about typical, and I know that can be difficult for you, but it's what we do.

Are you doing a good job?

One thing I would like to add is, this also has to do with when we actually sell the crop. So if we're buying it later, even though we may not sell it until March, we won't realize that revenue until March.

Okay. Well, it seems like you're doing a good job of it in the quarter. I'm going to assume that you keep doing a good job on it. So congrats on the quarter, thank you.

Our next question comes from the line of Ian Horowitz from Rafferty Capital. Please proceed.

Just a quick question of sort of Rob’s question. John, when do we get to the point where the farmers kind of hold back on the harvest or unable to harvest and really delay harvest into the kind of the calendar first quarter?

If we keep getting a lot more rain that can keep the farmers out of the field, snow. However, right now, just looking at the forecast, it's kind of amazing how quickly the farmers get the crop out of the field. Like I said, they started here yesterday, and if they take it into December and January, but we did that last year up in North Dakota. We saw snow in the fields and they ended up harvesting some corn in March. So, I don't know if it ever gets to the point where we don't take the crop out of the field.

We're not at the give-up point yet in terms of a fall harvest?

No. Not at all.

We haven't seen conditions like this in a long, long time. The other piece with the wet crop that we're having here, it is going to need to be dried, and it probably gives the farmer less flexibility on farm storage and other. So, there's going to be incentives for them to get in and get it moved.

Then, Diane and Ken both asked about expanding the footprint with the cash flow. Pat, are you looking at specific business lines, or any holes where you would like to focus more than others? The recent transactions have kind of been all over the map, both in terms of business lines as well as geographies. Is there some way that we should be focusing on going forward?

It's a good question. We've talked about Eastern Europe being a set of geography that we continue to have desire to grow and I think two of our acquisitions there in both the Czech Republic and Southeastern Germany have helped with that footprint as well. Certainly, South America as many of our discussions have related to both Paraguay, Brazil building out some of both our origination and additional processing and our biofuels business there, and adding to our biodiesel business with sugar ethanol. So, South America remains a geography that has continued promise for growth. Then overall global network, so to speak, our transportation network, even our addition of capacity of owned ocean going vessels at the right prices and so forth add for an efficiency aspect to our business that will continue to be global there.

Do you expect the PHA facility to be commercial in calendar first quarter? Did I hear that right?

We are testing the equipment as we speak now, and we plan to have the fermentation running late part of December, and finishing part of the plant probably first part of January.

Then the product moving out when?

Hopefully by the middle or end of January there.

One last question and I'll kind of get back in queue if there's queue a left. You mentioned weakness in the South American fertilizer business. I know this isn't a very large business for you, but can you gives more color on that? Do you see any kind of progress being made down there? Is it still a pretty difficult environment?

I'll start. First of all, fertilizer is used by ADM in South America as one of its origination tools. It helps with our relationship with the farmer. We're blenders. We don't go back any farther in the chain and then. We do buy it in and blend it. It was profitable for us in the quarter, fertilizer was, but there was a significant drop in pricing, and you're almost inherently long to a point it's hard to be completely out and that's had an impact on the results. However, it's not a huge part of our business.

John, one last question. As we get to calendar 2010, the ethanol environment looks fairly positive from a producer side and strained from a supply side. We've talked in the past about 2010 being satisfied pretty much from a physical market rather than a credit and physical standpoint. First of all, do you see that still happening? Second of all, should we expect that kind of a November-December rush in demand as discretionary blend remains positive, so that downstream blenders can get to good inventories as we go into the new mandate?

Overall, the gasoline demand will have an effect on this also, but with the increased RFS with California blending to 10% and with the plants that we see coming online, including our own, we feel we're going to be fairly close to balance with supply and demand. Right now, you can have a very good spot margin in ethanol, but if you go out two months you don't have any margin. So, it's really a spot business right now. Corn and energy prices are also going to have a big impact on this, but right now, I think the supply and demand look to be fairly well balanced into 2010. We've also seen some export interest here in the last couple of weeks.

When you say in balance, you mean physically in balance. So we're not going to have the REN overhang in 2010 like we did?

We'll still have that REN overhang. You can carry up to 20%, which would be 2.5 billion gallons but I don’t think people will use those as long as the economics are for blending.

Do you think that was that much excess capacity in the system in 2009 to generate the RENs to be available for 2010?

REN was created just when they used the blending.

Right, an excess REN though, did we blend that far over the RFS to create a REN that could be traded?

I guess I don't know the exact numbers on that.

Our next question comes from the line of Bryan Spillane from Bank of America. Can you please proceed.

Just two follow-up questions. I may have missed this, but with all the questions around the start-up costs in the chemicals business, did you actually give a number, just how much the start-up costs actually were in the quarter?

No, we didn't breakout.

Okay. Do you have a number?

In our books and records, we're going to have numbers that we're expending in all of our facilities, but it's not something that we're going to disclose.

Just a follow-up I guess on the last question. If the ethanol industry is profitable and the margin outlook gets better, is there a potential that you will see excess capacity or idle capacity come back on-line? Have you seen any signs of that and is that something we should think about for 2010?

The potential is there, just because we have idle plants. The problem gets to be is to buy corn today; you can't sell it until seven, eight days from now. You cannot lock in that margin. It's really a spot driven margin. So, it's very tough for a small new ethanol plant to buy corn and lock in any type of margin.

(Operator Instructions). Our next question comes from the line of David Driscoll from Citi Investment Research. Please proceed.

John on the corn processing and ethanol outlook, in the past you have given numbers on idle capacity, do you have an estimate for industry idle capacity currently?

No, I do not.

How about new capacity coming online in the next 12 months?

We'll have to get back to you on that one. We have it, but I just don't know off the top of my head.

We have that, David. In fact, I think the best website that actually has a lot of the current information on both production capacity and idle capacity and those under construction is on the RFA website. That website shows 11.5 to 12 billion gallons online. 1 billion to 1.5 billion gallons idled, and the same, 1 billion to 1.5 billion potentially under construction.

Thank you. I wasn't actually sure if you guys made your own estimates. I'm very familiar with that particular site. My addition on this would then say that, there's nearly 2 billion gallons of capacity that is very close to coming on stream. The idle capacity plus the new capacity I think you guys are going to bring 550 million gallons yourself online within the next six or so months. I guess the ultimate question just comes down to how do you have confidence in the current spot margins with this level of capacity coming online in a relatively short period of time and with the mandate at just $12 billion for calendar ‘10? Any comments there, Pat?

One is, we believe in scale, and the size. We believe our cost efficient plants again, co-located with our wet mill, have both the infrastructure, the corn buying power, et cetera, to be able to be very cost-efficient plants. So while our numbers at the plants that are under construction were likely included in set of under construction that I gave you, as we noted. [Columbus] came on this quarter and the second plant won't be until about August of 2010. So, about a little less than a year from now. So that timeframe we think makes sense and we do have confidence in our ability to be cost efficient. The markets will move the way the marks move, but we believe the balance kind of that is in place now and what barriers to startup and/or certainly much new construction is there to kind of make a balance for a balanced market next year.

Our next question comes from the line of Christine McCracken from Cleveland Research.

On the EPA decision that's expected here in a month or so, there's been some speculation that will be pushed out. What do you think might happen and how might that affect the overall demand?

Well, I think you're talking about the increased blend levels, Christina?

Correct.

It is expected that comment from the EPA would come on December 1st. We're hopeful, or I would even say optimistic that while we may not get to a 15% blend with their commentary. We very well may get to 12% on our way to 15%. And what timing that might be, industry kind of discussion seems to be around the early part of next year, maybe March or so to have that underway.

So you don't expect a decision by December, the December 1st deadline?

There may be a comment, but again the decision maybe not effective until March of next year. So we're just not sure about the December date. We have more confidence in what would be said when EPA makes a statement.

And our next question comes from the line of Vincent Andrews from Morgan Stanley.

John, in answering Bryan's question, you mentioned that you were starting to see some export demand for ethanol. Could you just qualify what that is for us?

In terms of what?

Where is it going? Who wants it?

Right now, it's going to different traders around, and we're selling on an FOB basis. So we don't know for sure the destinations.

Let me ask you a kind of a hypothetical. The economics make sense, given where sugar prices are in Brazil to actually export ethanol from the US to Brazil?

The economics, yes, would lead you to that, could lead to you that. There are also other markets, India and Africa and other people around the world.

Our next question comes from the line of Ian Horowitz from Rafferty Capital.

,:

It started up in phases, Ian. So the first and second phase are in completion, and we've also consolidated some of our operations into Hazelton.

It will be March of next year before it will be fully operational. We have two plants that we are in the process of shutting down, older facilities on the East coast.

So will we see continued start-up expense through the cocoa line through the calendar first quarter?

Yes, of some shape or form, yes.

Then can you just comment we've seen kind of weakness in this division for a while. I'm not very familiar with the cocoa market. Can you just give us a little color on it, is this a macro weakness, or is this weakness relative to your geographies or your markets? What's going on in the cocoa business?

Well, primarily it's a macro issue. The demand for products derived from cocoa is down, whether it be chocolate specifically or other products coming out of the cocoa stream. So as in many of our other businesses, there's a supply demand balance that you're always trying to work towards, and we're out of SKU right now.

Is it just trending with macro consumption trends, or is there some sort of substitution event going on that's above and beyond?

Ian, there's two pieces of that. One, is that there is the global weakness and the recession. An old adage is that chocolate was recession proof, but it's been proven not to be this time, but that's part of the equation. The other equation is that we've seen some historically high input costs now for cocoa and for sugar, which have impacted the chocolate manufacturers, which then in turn look where possible where they could make substitutions. There’s really several things at work here that are holding this group down.

Plus you have a little bit of overcapacity. We've added plants in Ghana, Cargill has added (inaudible) has added little bit of capacity. So, we do have a little bit of overcapacity issue in the market right now, too.

And you would expect that some sort of global recovery would kind of suck up that excess capacity?

Well, I think there is two pieces to that one is, global recovery certainly will help. The second one, as you see is that prices will start to come back down, and that could help. Then to the extent that processors struggle you never know how they will react to the low margins over a long time. We've seen over the years, eventually things get back in balance. It's a matter of time.

A question back on the ethanol. I think, John, you mentioned it's kind of difficult for a small producer to lock in margins, a startup producer for ethanol spreads. You didn't mention it directly, but can you talk a little bit about, working capital demands right now at these input prices and given the current credit environment and how that’s impacting independent producers to turn these other plants back on line. Is that still hindrance or do you think that’s freed up a bit?

Well, I think it’s still a hindrance because the banking industry has lived through already a couple of these smaller plants going bankrupt. So, they are looking at that, and you do need working capital in order to start up on these plants.

Do you think that the working capital requirements, the days of inventory, all different components, have they become onerous? Several years ago, the storage inventory for corn and the new ethanol plants was extremely thin, have the banks started to require much larger investment in that side of the business?

I don’t know specifically about the financing for a small ethanol plant, that’s just what our customers tell us.

Our next question comes from the line of Robert Moskow of Credit Suisse.

All else being equal, given your asset platform; North America, South America, do we normally expect profits to be better in the first half of your fiscal year and then just seasonally a little bit weaker in the second half just in terms of crop cycles?

I have been looking at those numbers for 30 years, looking for trends and it’s hard to predicts because of the mix of businesses, there is no question that the harvest has its timing issues, one to another, but it’s rode into the mix of all the other businesses that we have and the very ability year-to-year, it’s hard to say, Rob.

So entirely over there you’re not looking at the second half of your fiscal year as just being a tougher from a seasonal prospective, you just don’t look at it that way?

No, not necessarily, we look at parts of our business where there are more peaks and valleys and things happen.

Over the years, we’ve become more a global, so I think your point of different businesses on somewhat different cycles is important, but I don’t think it [influences] them.

Consensus and estimates show your second half being weaker on an EPS basis than your first half and that you’re also talking about at the late crop and some of you revenues being pushed out. (inaudible).

Simply from our end is that the business cycles and the business opportunities are just going to outweigh any seasonality that may appear.

At this time, there’s no further questions. I would like to turn the presentation over to Ms. Pat Woertz for any closing remarks.

Okay. Well, thank you so much for all your questions today. I think slide 17 shows a couple of upcoming conferences and I also might mention we will be ringing the closing bell of the New York Stock Exchange on December 3rd. It’s been celebration of our 85 years listed now on the exchange. So, thanks very much. Everybody have a good day.

Thank you for your participation in today’s conference. This concludes today’s presentation. You may now disconnect and have a great day.