Good day ladies and gentlemen and welcome to the second quarter 2010 Archer Daniels Midland Company earnings conference call. My name is Josh, and I will be your coordinator for today. (Operator instructions) I would now like to turn the presentation over to our host for today’s call, the Vice President of Investor Relations, Dwight Grimestad. You may proceed.

Thank you, Josh. Good morning and welcome to ADM’s second quarter earnings conference 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 constitute forward-looking statements that reflect management’s 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 turning to slide four, good morning everyone. I will begin with safety first. Through our second quarter, we reduced lost workday injury rate by 32%, and our total recordable incident rate by more than 9% compared to the full- fiscal year 2009, thanks to the ADM employees and contractors for their continued attention to safety. Turning to our financial results, this morning we reported quarterly net earnings of 567 million or $0.88 per share. I am very pleased with the performance of our people and with our results this quarter. While our earnings in total were comparable to last year's strong second quarter, the market conditions and the mix of earnings were markedly different. This once again, I believe, demonstrates the ability of ADM’s team to utilize the geographic scope and diversity of our asset base to create value for our stockholders. Steve will talk about our segment results in a moment, but first an update on our profitable growth strategy. We have brought online this quarter our Columbus, Nebraska, ethanol dry mill adding 300 million gallons of annual capacity. Our Clinton, Iowa, cogeneration plant, our Brazilian JV sugarcane ethanol plant, our first production line at Hazleton, Pennsylvania, the Cocoa processing plant. Also we have increased ethanol production capacity at our Decatur, Illinois corn wet mill, and we brought online incremental processing capacity at several of our North American oilseed processing plants. We have integrated our recently acquired soft seed processing plant at Olomouc in the Czech Republic. We have started up the boilers at Columbus cogeneration plant. We are in startup at the bioplastics plant in Clinton, Iowa, and we are on track to start up our propylene glycol, ethylene glycol plant in Decatur later this quarter. And lastly our Cedar Rapids dry mill is scheduled to come online this summer, rather than in the fall. So, looking at current operating conditions, we are seeing demand improving in some of our key markets we serve. We also see the US ethanol market reasonably balanced, and in South America growers are harvesting what appears to be a bountiful crop. So, we will discuss more of these topics during our operating results discussion. So, I will now turn the call over to Steve, who will look at our segment results.

Thanks Pat and good morning everyone. Turning to slide five, slide five reflects our financial highlights for this quarter. Segment operating profit was 970 million for the quarter, up 155 million or 19% from the 815 million from a year ago’s quarter. And in a moment I will discuss those segment results in a little bit more detail. Quarterly net earnings and earnings per share both decreased 2%, and our tax rate has been reasonably steady. As you can see from the waterfall chart for the quarter on the lower left of the slide, we did not have any notable items this quarter other than LIFO, which had a 34 million or $0.05 a share after tax negative impact on earnings and EPS. Last year's quarter included $0.12 a share of LIFO income. Turn page to slide six, where we show the quarter and year-to-date summary of our operating profit by segment, where you can see our results in a bit more detail. We’ll turn to slide seven to begin a review of each individual segment, starting with Oilseeds Processing. The oilseeds operating profits this quarter were 352 million another good performance from this business unit. Crushing and origination results increased 6 million to 193 million for the quarter due to stronger crush margins in North America and the absence of last year's South American fertilizer write-downs. These results were partially offset by weaker year-over-year European results. Our crushing volumes were higher in the quarter as our recently completed plant expansions positioned us well to meet the increased demand for North American export meal and oil as the industry adjusted for the lack of soybean supply in South America. Refining, packaging, biodiesel and other results decreased 10 million in the quarter to $76 million. Improved South American margins and volumes…

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

(Operator instructions) And our first question comes from the line of Robert Moskow from Credit Suisse. Robert, you may proceed.

Hi, thank you. Very strong quarter, congratulations.

Hi, Rob. Thank you.

I had a question about corn syrup pricing. I know it is – the contracts have been negotiated at lower prices than a lot of us expected. And I always thought of the industry as being pretty well disciplined in terms of price, but then you are also looking at capacity utilization levels that are a lot lower than they were before, do you see any change in your view as to whether this is a disciplined industry in terms of pricing or are our concerns well founded that pricing might continue to drift lower?

I will start by answering. We have lower volumes in the industry. So, I think that had a little bit to do with the lower prices. Also we're picking up a little bit of volume in Mexico, which helps to offset, and I can't comment on the discipline in the industry or anything like that. We're just really looking at the total supply and demand, and in our case we are always looking at, as Pat and Steve both mentioned in their prepared comments, more flexibility in our – being able to make other products. So, as far as the discipline goes, I guess I can't comment on that.

Okay, but what you are kind of saying in your guidance here is that you expect pricing to be down, but you also expect your corn cost on a net basis to partially offset that lower price realization. Is that correct?

You should see lower cost, and we expect to see lower operating costs also, lower corn and manufacturing cost.

Okay, and then just one more factual thing, you mentioned the exact number of $34 million of start-up costs in the bioproducts line, when did these start up start to ease off, how much more in terms of costs should we expect for the rest of the year, and then also volume for ethanol for the quarter, was your volume up a lot because of the new production facilities or was it up because of the higher demand?

I will start with that and let John or Pat fill in. On the startup costs, based on what I know today, I think that the 34 million will be the peak of start up costs as we bring these plants online and get them going, and we should see them taper off some in the next two quarters. But there is no question we have got start up going here for at least another two to three quarters. But at least based on our estimates today, we think we peaked.

Okay.

The ethanol volumes were certainly a mix of the new plant coming online from Columbus. I'm thinking back already over a month now. We're using volumes that go back to December, but we included volumes there, and we have been merchandising volumes all along the way. So it was a mixture.

And also you can see in our appendix, we have our process volumes in our corn grind is higher as due to ethanol and then also lysine. We're seeing better lysine demand. We can divert more of our grind over there. As this time of the year where the sweetener volume tends to slow down a little bit, even though we are seeing a little bit more of a pickup in Mexico.

With the slow draw on our harvest, our transportation assets were not taxed as much. We weren’t able to see little bit of volatility in the transportation assets. Also the ability to handle a large volume of grain all at once affected us. But as the harvest keeps going on, as a matter of fact they are harvesting corn around Decatur yesterday to help finish up. We will see opportunities come. We will be exporting more beans out of South America. Corn will come out of Eastern Europe, and Central Europe and Western Europe, and then also more corn exports will probably start coming out of the United States here as we see less soybean exports in the next, after April just due to the South American crop.

Great. Thanks so much.

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

Thanks. Good morning everybody.

Good morning Vincent.

Just want to follow up a little bit on the bioproducts piece, and just want to make sure I understand. You got start up costs, but does that also mean that you are not running those plants full-out or are you running them full-out at this point?

Well, it is a mixture Vincent. We look at it in two buckets. We have just pure start up costs to get – we have got plants that aren’t even running yet. For example, or they are running in stages, the propylene ethylene glycol, the bioplastics plant, and we have plants such as the Columbus dry mill that is coming up over a bit of time, and so we are incurring some cost until we get that up to full capacity. So, it is a mixture of those. So, we look at that, and from our perspective we include – that $34 million includes bits and pieces of both of those, and we will stop including them in those costs when those plants are at their designed capacity.

Okay, I guess maybe what I really trying to get at is as it relates to ethanol, there has been a lot of volatility in that line over recent quarters, and just trying to get a sense of you know, this quarter’s results if we just looked at it where things were on a cash basis, and assumed all on a go forward basis, is this about what you should be doing in that segment on a go forward basis assuming nothing changed?

Well, we still, Columbus was not completely up in the December quarter end. So, we don't have that up to (inaudible).

Can you give us a sense of how far up it was or wasn’t?

(inaudible).

Go ahead I am sorry.

We're basically starting it up. As of yesterday we are pretty much close to full capacity now. There are still issues anytime you start up a huge plant. You may shut down a line for a little while just to tweak, make sure you get the energy efficiency in the operations. So, to quantify it exactly it is just a little tough. I think the better way to say this is we're going to have more capacity quarters going forward, but you really have to look at what the margins are doing in the industry to try to align our second quarter with our third quarter.

Sure, understood. And maybe I will just ask one last question on ethanol, then I will pass it on, and this maybe a question that will be familiar from this call two years ago, but there is no issue, if I am correct in terms of blending infrastructure as we move into 2010 to make the mandate or potentially blend above it, John is that correct, the bottleneck that we used to see two years ago, are you not anticipating any of that during 2010?

No. We are not.

Okay, thanks. I will pass it along.

And our next question comes from the line of John Roberts from Buckingham Research. John you may proceed.

Good morning.

Good morning John.

Hi John.

Will there be a three-year capital spending cycle coming up next or do you think you're going to handle it a year at a time as you come off this current three-year period?

John, I think that we are going to have a different CapEx profile going forward. We are at the conclusion, nearing the conclusion that this large Greenfield effort. We don't have projects like this on the books that are Greenfield. So, we expect CapEx going forward to have a higher mix of acquisitions than we do Greenfield. So, it is going to be a little less predictable than we have had in the last couple of years, where we were able to pretty much line up where we thought CapEx was going to be based on these Greenfield projects. So, we will see where that lands us.

Do you have an early thought on where fiscal ’11 will drop to?

No, other than we will have to see. Right now, we think that the Cedar Rapids dry mill will be done about the end of this fiscal year. I'm sure we will have some expenses flopping over into fiscal ‘11. We have been running what we call our maintenance CapEx, our recurring CapEx, at about 600 million. So, sitting here today with what I know today that number will start to trend a lot closer to that maintenance CapEx then where we are today. But that is where the big asterisks to potential acquisitions and other things that are going to come along.

And then lastly, and then I will get back in the queue, but you are running a 13% return on assets, which is near your target, with the – I assume there is a significant drag from the new capital that is coming in that is not fully productive yet. You know how much that drag roughly is or how much of a lift you would get if you had full productivity from the new capital?

We don’t have – I don't have that calculation, and as you point out, we have seen a lot of volatility in those return metrics, and we look at it over time. So, every quarter has a little different mix. I don’t have that number.

Thank you. I will get back in queue.

Thanks John.

And our next question comes from the line of David Driscoll with Citi Investment Research. David, you may proceed.

Great. Thanks a lot. Good morning everyone.

Hi David.

Good morning.

Congratulations on the quarter and a good first half. Looking at the oilseed processing side, can you talk a little bit more, I actually took a couple of your comments maybe more negatively on the – what you said about the slowdown in US exports. As I calculate the pacing right now, we're going to have excellent US exports out of the country. It is just the pattern has shifted, so it is much more upfront, and then I would say that the decline in the shipments in terms of post-April is really a function of not a lot of beans left in the United States. So, it is not an issue of demand. John would you agree with that?

Demand, as Steve commented, we see growing. Also here in the United States, if you look at the cold storage, inventories are down I think 15% to 18% from last year. So, we are seeing a little bit better demand. I think our comments are more aligned to where we see the South American crop, and the crush coming online in Argentina and Brazil. When the pipeline totally gets filled, the North American – we anticipate the North American crush will slow down a little bit. Did that answer your question David?

Yes, I was maybe just trying to John point out that it is really not a negative. It almost sounded negative in your prepared comments, but it looks to me like the shipments of beans, the exports of beans out of the United States right now have been at all-time record levels, and this is just a different pacing then what we have seen in the past, the shift to South America it feels natural. So, again I just wanted to make sure I was tracking with what we were seeing in those markets correctly, do you agree with my statements?

No, I agree.

I don't believe that there is going to be a bean shortage in the United States. We had a fairly large crop. There is fairly good carryover, I thought 245 million bushels. The market usually says anything over 200 million bushels is more than adequate carryover. So, I think it is more just the additional crush we are going to be seeing in South America, I mean online. Margins still should be good because of different biodiesel throughout the world. I think it is just going to be a switch of where the crush is going to be operating.

Okay. Pat on ethanol, you made a lot of nice comments and so did Steve. Can you just give us maybe a bigger picture or comment here, does it feel as if the ethanol business has really come through the worst of the downturn, you know, where we had those negative margins, and it honestly felt like the business was, you know, so many of the competitors were going bankrupt, I mean it was fairly awful. Does it feel like you can honestly look forward over a couple of years and say that the outlook is actually good?

Well, first of all David, you know we have an optimistic view of the ethanol business or we wouldn't be building that capacity or haven't built that capacity that we did. We have been in the business for quite a long time. So, we have seen cycles as you know, and there is a RFS out there that gives you some set of certainty related to demand. You have the opportunity to have additional demand due to incremental blending. So, the big picture is we are optimistic about the ethanol business, and we think that the scale and the scope and the low-cost producer that we are is the way to go about it. So, I won't it will be successful for everyone, but through its ups and downs, a low-cost large producer should do very well.

Final question for you guys is you have a number of people talking about it. You have talked about it yourself, all these capital projects that are coming to completion, you know, the way I know a lot of us on the outside think about is we look at the capital spending number over a multi-year basis, apply some kind of expected return against it, and that is how we come up with an EPS impact. It feels very crude to me to do it in such a fashion. Are you guys willing to provide any kind of guidance on what the impact of all these projects are, especially those projects that are cost reduction projects like your cogen project. I think it would be very helpful for the investment community to get a sense as to what kind of returns you guys see on it. I don’t know if you are prepared now, I maybe want to start the ball rolling on that.

It is a good question David, and how you think about it is not all that crude, because as you can appreciate that there is a lot of volatility in our business, whether it is on a cost savings project like cogens, where we look at coal versus natural gas and other products, which have a lot of volatility, as well as the other types of products that we are going to produce from our new plants. And we do look at our returns over periods of time, knowing that we are going to have some cyclicality and volatility to the business. So, we continue to look at returns and metrics, but no matter what we do here, it will be based on a number over time and a set of assumptions that we know will – that will be over and sometimes below others. So, it is a great question. It is something we look at all the time and we will continue to refine that and if we can share that with you and others, we certainly will.

I really appreciate the comments. Again, congratulations on the quarter.

Thank you.

Thanks David.

And our next question from the line of Christine McCracken from Cleveland Research. Christine, you may proceed.

Thank you. Good morning.

Good morning.

Hi, Christine.

Hi, Christine.

Pat, I think you said you were optimistic on the blend rate increasing. I am wondering EPA had initially said there were going to punt the decision until the fall, and in comments, I think as recent as last week, it now sounds like they can make a decision a lot earlier than that. What is your outlook and then how do you plan for kind of a moving target like that?

Well, I think I have to comment it is at the highest level so to speak as opposed to trying to predict what day or what month we might get a response. As you know, the EPA has undertaken a formal review of an application, and that application was about a 15% blend rate. And they did announce they were postponing it until the middle of 2010. I think, we're still optimistic that the view is and in fact comments they have made was it felt like it was an inevitable discussion about higher blend rates. Whether or not that will go to the full 15, whether it will go to 12, some of the discussions we have been having with folks is related to allowing customers to not have to distinguish by cars or model year, but have something that the market doesn't have any, the market is sort of can deploy the higher blend rate within the current structure or within the current chain, distribution chain. So, I think we're still optimistic and I think it will be by the middle of the year that we will hear.

Okay, and then when you look, I would say, over the last quarter, I would say you have heard of numerous plants coming back online, a lot of new capacity it looks like we'll be on maybe a billion gallons or more online by midyear. I am ordering, you know, when you look at the supply demand balance then going through 2010 and into your next fiscal year, are you concerned at all that there would be any oversupply. Again, that is a lot of capacity to come back online, and I know the economics are very favorable right now. I'm just wondering what your outlook is.

Well, maybe I will start and John you want to jump in. I think the estimates that the markets have noted are for total capacity both built or idled is between 13 billion and 13.7 billion gallons. So, you know the opportunity, again to continue to blend at higher rates, those that should have good economics to run will probably run. I think we see a fairly balanced that is the best way to say it as opposed to an over worry or an undersupply fairly balanced.

Timing has a lot to do with everything in this business too, and we are bringing on more capacity like you said, but we are seeing some export business out in the United States. The next sugarcane harvest and the increase in the ethanol production won't happen until April-May time period in South America, which we will start bringing on more summer driving here. So, you always have that little bit of supply and demand balance. Half a billion gallons here, half a billion gallons there can make a difference, but we still believe in the long-term of 15 billion gallons and the industry seems like right now we are going to be built to that in the long-term.

And you're not worried at all by some of these accounts, the low carbon fuel standard in Wisconsin I guess filing a similar petition, any of those environmental constraints a concern for you longer term?

Well, I would say that you always have to make sure the education process you know, goes on with each jurisdiction. So to say there are no worries, no or we wouldn't have you know, people trying to spend time to understand and provide information to various jurisdictions as they have discussions about the same.

All right. I'll leave it there. Thanks.

Thanks Christine.

And our next question comes from the line of Christina McGlone from Deutsche Bank. Christina, you may proceed.

Thank you. Good morning.

Good morning Christina.

Just following on Christine's question, Pat, I would love to get your take on – I guess I am confused somewhat by California's low carbon fuel standard, and what's going on in some of the northeast states with adopting similar language and then including indirect land use. How does that – how does that reconcile with the fact that they do have a federal biofuels mandate. How do you meet the 15 million gallons if they're going to start restricting carbon and including indirect land use?

Well, I think it's a that kind of question is what one poses to the regulators and legislators, when you have discussions about the same. Now what California has adopted to see one of the things that we tend to talk about is the science is not quite right on indirect land use to have it so formally noted as far as a piece of legislation. So, there is discussions about what it really means, how you really calculated, what kind of production can fit into a low carbon environment, how a plant could qualify or not. All these are yet questions to both answer, and then how the specific jurisdictions work through. So, the optimism about the 15 billion gallons nationally is that if we had a general standard across the US, and not necessarily the individual jurisdictions that are sort of spending a little time on this subject.

Okay, and then I guess further to that, Shell's agreement with Cosan that was announced yesterday, what do you think of that? It gives Shell the ability to distribute sugar-based ethanol in the US, which does, I believe, meet the low carbon fuel standard. Is that a threat to corn-based ethanol?

We've always had the ability to import Brazilian ethanol in the United States. So, I don't think that potential joint venture changes anything at all, I mean in the United States just because they have the distribution. They are in the business to make sure they are making money. So, there are going to be buying the lowest cost ingredients they can.

Okay, it makes sense, and then just a housekeeping issue. On 50 million gallons that you added indicator for ethanol, where did that grind come from. Did you pull it out of fructose?

That just gives us more flexibility. It can be lysine, it can be fructose, it can be corn syrup. Any given two month period during the wintertime will tend to run, will just run more gallons and less fructose. So, it's not that simple of an answer. It's just one or the other.

Okay, and then I guess last question John. Can we go back to oilseeds, I was a little confused by an earlier line of questioning. If we do get this large Brazilian and Argentine crop, you have a better alignment in global supply and demand in soybeans and soybean products. So, how does the global margin structure not come down, and then now that you have higher plants up in the US, wouldn't utilization, your utilization fall in the US and what does that mean for ADM as a whole given your geographic footprint?

Yes, we should. As Steve mentioned in his remarks, we do expect utilization to fall in North America. That is not unusual during the summer months around the United States, but with the growing profitability, hogs [ph] are actually making a little bit of money on the spot basis right now. Poultry numbers being a little bit down, we do anticipate better crush margins this year than we do last year just because of the word economics and better demand.

Okay, so down sequentially, but still up year-over-year for crush margin?

Maybe [ph].

Okay. And then in terms of the biodiesel demand in Europe, that's very strong. Will we ship BE19 [ph] from the US and will product come from Argentina or will that be supplied by European vegetable oil?

What tends to happen just because each government has their own rules and regulations, what we’ll see is an increase in biodiesel demand in Europe. Our rape seed margin should be better. We will be importing the soybeans. Argentina will make up the difference there and then what – we will start shipping more vegetable oil for the food market out of the United States.

Okay, great. Thank you.

Welcome.

Thanks Christina.

And our next question comes from the line of Ken Zaslow from BMO Capital Markets. Ken you may proceed.

Hey, good morning everyone.

Good morning Ken.

Hi, Ken.

Just a quick housekeeping, the $34 million startup cost, is that total for the company or is that just for the ethanol?

It's in the bioproducts group and that is the preponderance of the startup cost for the company. We have some other odds and ends in cocoa and others, but it covers ethanol, cogen, DHA, propylene, ethylene, glycol, like that, sugarcane.

All right, but I knew you started out the cocoa as well. I just didn’t know, but you're saying that's pretty modest?

It's relatively modest. That's right. So, we only call this out because it's the only significant number.

Pat, you know, I think it is a setback you know, maybe you know, we only have crude measures as well in abacus and stuff like that, but we were coming to the idea that you're going to have a lot of cash. And it seems like if you have a lot of cash there is a lot of things that you're going to be able to do with it. Can you go through your priorities of how you're going to deploy the cash and to what extent that cash will be used for growth opportunities versus debt reduction and how you think about it?

Well, Ken as we've talked before, it's always a discussion. So, we have dividends, we have strategic growth opportunities. We certainly are finishing up our capital expenditures. We do have the opportunity for some debt reduction. We have as you know, some restrictions related to share buybacks because of our discussion with the rating agencies, but we continue those discussions with them. So, profitable growth remains the key priority because that's what we think will benefit our shareholders in the long term.

But, I mean with the significant cash, I mean, is there a region, is there you know, how do you expect it to deploy. I mean, is there something in the near future or should we wait 12 months. I mean how do you think, how should we be thinking about the cash, because it does seem like a significant amount of cash is coming to you guys.

You know, one of the things that if the world was perfect you'd be able to kind of predict each quarter or when the opportunities would present themselves. We have a funnel as we've talked about before of opportunities, as far as where in the world we have priorities to grow is to continue to fill out our global footprint. So, staying within that value chain, but areas continued in South America, in Eastern and Central Europe, in Asia. We also have priorities to continue to diversify our feedstocks as you have seen you know, with getting into sugar, greater investment in palm and biomass as well as filling out that diversified product slate. So that is also a focus area for that investment growth, and it is the opportunities that present themselves when they do. So, it's not as if we can say it is going to happen largely this year or in you know, or next quarter, but it is our objective to continue to grow.

In terms of ag services, it was $150 million, which to us was a seemingly a strong number, but you guys seemed a little bit more, you know, kind of pushback saying, hey it wasn't as great, and then you kind of laying out the opportunities that going forward, there may actually be more opportunities. Is that the interpretation you know, we should think about this $150 million for the quarter was not as good as you would have wanted and there was actually more opportunities. I thought this was, if I do a progression model going forward, the $150 million seems to be in line with your growing asset base. Is there something that I should be thinking about the next turn on your ag services should be another leg up.

I'll start with this one. Ken, it's a good question. It's always interesting how one interprets what one hears. We were pleased with our quarter. Around here it was a challenging quarter for this division with the delayed late harvest, and I think we felt good about what we accomplished during the quarter. Every quarter as we reset and go, and based on the asset network we have and the opportunities that present themselves. So –

We have added assets though to your point, and whether they'd be in South America or ships et cetera, we do expect those assets to perform.

Okay, and then my last question is cocoa, you know, in relative numbers your other business did quite well. I guess what I'm trying to figure out is, I think you've been in the last couple of quarters a little bit cautious on the return to profitability or the growth in the profitability for cocoa. It sounds, and then if you listen to Barry Calibet [ph], they also seem to be saying that there has been a turning point there too. Is it fair to say that this business has begun to turn around and although demand could be relatively flat globally, at least that's what they’ve said. Is there an improvement, just as we’ve hit bottom in ethanol or is this you know, two quarters in a row doesn't really make a trend.

Two quarters in a row always doesn't make a trend, but we’ve seen cocoa prices drop 30% here in the last couple of weeks. We are seeing more demand come like it's still too early to say that's an increase in demand or people are just starting to fill their pipelines. We are running – we are seeing a little bit more positive signs, but it's just, it's really still tough to say. We still have overcapacity and demand is down a little bit.

Okay.

(Operator instructions) And our next question comes from the line of Ann Gurkin with Davenport, and you may proceed. Ann Gurkin - Davenport & Company: Good morning.

Hi, Ann.

Good morning Ann. Ann Gurkin - Davenport & Company: Just wanted to start with the potential for shipping ethanol from the US and to Brazil and the potential that tariff could be lifted. Any update on that?

I don't have any update on. There is a little bit of ethanol moving around the world to different destinations, some to Europe, a little bit to India, maybe a little bit to Brazil, but you know, Brazil has a tariff on our ethanol coming, going down, going into Brazil plus they've reduced the blending from 25 to 20. So, those all are factors when the harvest comes in. So, I can't comment on the tariffs. (inaudible) is what I should say. Ann Gurkin - Davenport & Company: Okay, great. And then Pat, I was just wondering since you've been a significant participant in the World Economic Forum, any comments you can share with us or any comments on world economies or changes in strategy for ADM or anything you brought back that is additive to the outlook right now.

Well, one of the reasons I agreed to co-chair this year was to kind of add a spotlight to some of the issues around agriculture, particularly the need for investment and infrastructure around agriculture. You know, some of the discussions at the world economic forum is a combination of business, of governments, of NGOs, and trying to make the world a better place and if one of the wins or one of the ways that talking about the current economic conditions coming out of the recovery, so to speak, or coming out of the recession and a recovery is that in former recoveries, maybe investment in agriculture was left behind or agriculture was left behind. So, not to have investment in agriculture left behind in this recovery was one point, and then in the longer term to add some optimism about the ability of agriculture to meet the demand particularly by the middle of the century with more population on the earth, there's going to be higher demand for food, for feed, for fiber, industrial products, et cetera, and with productivity, with investment, in infrastructure with bringing on some new arable land sustainably, with reducing post harvest waste, all those things can contribute and create some optimism again around agriculture to be able to do that. So that was one of the areas that certainly relates to our business and the reason I was participating. Ann Gurkin - Davenport & Company: Okay, thank you.

And our next question comes from the line of Diane Geissler from CSLA. Diane, you may proceed. Diane Geissler – CSLA: Good morning.

Hi, Diane.

Hi, Diane. Diane Geissler – CSLA: Thanks for taking the question. I wanted to ask could you remind me what your policy is regarding hedging behind your fructose business, now that you've got your prices locked in, corn prices are down. Normally we don’t – normally, we see corn prices bottom around the time of the harvest. So, I guess I'm just trying to understand how that roll off in corn prices, how I should look at that from ADM's perspective?

We generally run a hedge position at ADM, and we have specific limits throughout the company that we are constantly monitoring every day. That's the best way to answer that question. Diane Geissler – CSLA: Okay, and then just a question, I mean, look I'm looking at what you posted for the first half of the year up 65, and what I like about it besides just the level of earnings is that, you didn't do it in a perfect environment, not everything worked your way. So, when I look at the back half of your fiscal year, you know, not everything is going to be perfect, but it's not going to be terrible either. I mean, is that – I mean, fructose pricing is down, but corn costs are down, you will probably see margins run off a little bit in oilseeds as you move to the South American harvest, export demand seems to be solid at that. Is that a logical conclusion that this is kind of like a new level of earnings for ADM, and we should get comfortable with thinking that that's replicable?

That's a great question.

First of all, we liked your comment about, yes we liked our first half too, and we feel good about our business, but it's very difficult to talk about new levels of earnings. We certainly have had some new investments and our investments are starting to come on stream. So, a piece of that and an opportunity to think why one area is up, another is down and how we can perform in difficult environments as well as maybe more robust growing environments is a great observation. I think it's hard to, you know, you almost need to make sure the averager on your calculator is working as one goes from quarter to quarter, year to year because sometimes there'll be lumps in it. Diane Geissler – CSLA: Okay, while I appreciate you don't give guidance but it's probably as far as you're going to go, right?

I just think the only thing I'd add Diane is that you know, every point in time that you look ahead, you're looking at a certain opportunity that you know, you hope you're building your base and continue to prepare for the future and yes, you can take points in time and maybe see out there a little way. The problem is it gets a little less clear the farther out you go other than some of the, what we think are some of the certainties or givens that there is going to be more and more demand for what we do here at ADM over the long term. Diane Geissler – CSLA: Okay, well, thank you for your commentary.

Thanks Diane.

And our next question comes from the line of Ian Horowitz from Rafferty Capital Markets. Ian, you may proceed.

Hi good morning everyone.

Hi Ian.

Hi Ian.

A couple of quick questions, John. Can you tell me what your thought process was with you know, with Cedar Rapids has kind of moved up, you know, at least one quarter or maybe two quarters, you know, Columbus seems to expand it a little bit. You know, this used to be called a 275 and it's now a 300. First of all, should we expect Cedar Rapids also to go from 275 to 300, and just what gave you the signal to kind of go with this growth in ethanol especially pushing, bringing Cedar Rapids up as forward as you have?

Well, as Pat had mentioned in her comments that with the EPA, and looking at the new blend rates, there is a possibility that that will change around June. We thought it made sense if we could start our plan sometime this summer. It would help with the increased demand for ethanol and when we are – so that's the reason why we are looking at trying to get Cedar Rapids up and going, and yes since these are the same plants, we expect Cedar Rapids to also be at 300 million gallons annual capacity and when we build our plants, we tend to be a little conservative. We said we expect, we wanted to be around 275 million gallons on an annual basis and when we got that plan up and going with our great construction crew and the engineers with the job they did, we found that this plant could run 300 million gallons a year. So, I think it's just on how we build and operate plants. It makes our plant more cost effective, also. So, I think it's just better opportunities what we saw and the timing of when we decided to bring up the plants.

Okay, so this also wasn't – this wasn’t a CapEx investment to get this exercised [ph], this is just realizing optimization? And Pat with the recent – there was a question regarding the Royal Dutch Shell and Cosan event the other day. You know, can you talk a little bit more about, I mean, we've had some large sugar events in Brazil recently between Bell [ph] and Bunge. How does this color your timing or enthusiasm for continuing along in Brazilian sugar if at all?

Ian, it was a little hard to hear your question, so let me respond to what I think it was and if it isn't, let us know. I think we are still very interested in the diversification of our feedstocks and in sugar and in sugar in Brazil, and not only because it's for ethanol, but for the broad variety of products that we could bring as we do in our corn plants to be able to produce from cane. So, what we're learning in our, if you want to call our first effort here with our joint venture of these two plants, what we're really learning from building the plant from the ground up, not investing in either old or already established plants, but really building them with a partner from the ground up and we'll see where that goes. You're probably right that acquisitions as we have probably seen every plant in Brazil as far as sugar goes, you know, there are a lot of players that are interested. So, we'll see where that takes us, but I think we are comfortable in our investment and continue to be interested in growing that.

So these two transactions really don't change here, the color of your strategy at all down there?

No. I mean any time someone announces something, you want to see how the thing plays out but, you know, we are still very interested.

Okay, and then one last question. John, with this March resurvey event, how does this change your approach in terms of hedging or you know cost containment, if at all?

I'm sorry, the resurvey?

The resurvey, how does this change your approach to, you know, hedging or –

With the USDA coming on?

Yes, yes. right.

It doesn’t. We take all factors around the world, what the weather is like, what demand is like. So, the resurvey, I guess we're not looking at that. It's going to be any big huge surprise, and as I mentioned earlier we are still harvesting corn around Decatur, we have not seen yields go down as we go and harvest the corn. I mean, there can always be a little bit of surprise, but right now you're looking at 1.8 billion carryout in corn. So, even if they adjusted 100 million bushels or 200 million bushels here and there, we still have plenty of corn.

Okay, great. Thank you.

Welcome.

(Operator instructions) And our next question comes from the line of Alec Patterson from RCM. Alec, you may proceed.

Yes, thank you. Pat, I sort of asking you a question Ken asked on capital decisions, and just want to get a sense that when you're looking at your various opportunities across debt reduction or M&A activity, capital spending programs and share repurchase activity, are they all held to the same return on capital standards or return on asset equity standards?

Well, I would say we look at the opportunity for profitable growth at even a higher standard, if I understand your question correctly, because it is going to be what investments we put, you know, sort of in the ground or on the – in the company for the long-term. So we want that strength and that opportunity to be there in perpetuity so to speak, where some of the other decisions you speak about are more of a fixed decision for that particular period in time. Steve, you want to fill?

I think that's, I mean, we look at them all in context, and also in context of what's going on in the marketplace to the extent that you buy things back or you share some debt, and you have to evaluate the ability to get if you need capital, how easy it is to raise, and what the costs are. So it's, you know, sometimes it's an absolute, as Pat said, sometimes it's on a more relative basis to what's going on in the marketplace.

But, Steve and Pat, my impression is that you guys focus a great deal more on the numerator over return on capital analysis than you do on the denominator, and you know, the markets, the commodity markets, what have you, will serve to swing that return on capital equation around – without much focus on the denominator from you. So, I guess that's why I am just trying to get a sense that you are managing the return on capital outlook and the numerator part of that outlook with a sense of balance between the two, and that's what I am trying to get at.

I'm listening, and I'm trying to absorb a lot of what you said because I look at it that we manage both the numerator and the denominator understanding that we have some points in time where the denominator gives some variability because of the marketplace, but it's what – we talk about it a lot internally. We want gross, but it's got to be with the returns that come with it and again knowing that we're going to have to average that over some periods of time because of some of the variability in the denominator, but I think, you know, I think that we were very thoughtful in that analysis and I think you know, maybe in the last year or so, you know, we haven't or even more than that, several years, we haven't jumped at acquisitions to, you know, to buy earnings. We continue to be very thoughtful and analytical to get the, you know, to get the right investments done at the right price, and there is, and you always have to factor the risk in it and again, where we're more comfortable and confident in the areas that we plan and how that compares to some of the new geographies and new things that we're looking at. So, it's a whole mix of things Alec that we look at, and we think, of course, it is going to be a little biased that we do a pretty good job at it.

I would add that you know, the denominator is equally important, and if you are only focused on the numerator, you'd again buy earnings or spend too much for acquisitions or run up certain aspects of the working capital of the places where we don’t need to be. So, I'm comfortable we're doing both.

Okay. Thanks very much.

Thank you.

And at this time, we're showing no further questions available. Pat Woertz, you may proceed.

Okay. Well, thank you everyone for your time and I appreciate all the questions today. We did have a slide there, I think it is slide 17 that shows a couple of upcoming investor conferences, and we look forward to talking with you on the next call in May. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.