Good morning, and welcome to the Archer Daniels Midland Company Second Quarter 2019 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Victoria de la Huerga, Vice President, Investor Relations for Archer Daniels Midland Company. Ms. de la Huerga, you may begin.

Thank you, Lisa. Good morning, and welcome to ADM's second quarter earnings webcast. Starting tomorrow, a replay of today's webcast will be available at adm.com. For those following the presentation, please turn to Slide 2, the company's safe harbor statement, which says that some of our comments constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry condition, company performance and financial results. These statements are based on many assumptions and factors that are subject to risks and uncertainties. ADM has provided additional information in its report on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in its presentation, and you should carefully review the assumptions and factors in our SEC report. To the extent permitted under applicable law, ADM assumes no obligation to provide -- update any forward-looking statement as a result of new information or future events. On today's webcast, our Chairman and Chief Executive Officer, Juan Luciano, will provide an overview of the quarter and important actions we are taking to meet our strategic goals. Our Chief Financial Officer, Ray Young, will review financial highlights and corporate results as well as the drivers of our performance. Then Juan will discuss our forward look, and finally, they will take your questions. Please turn to Slide 3. I will now turn the call over to Juan.

Thank you, Victoria. Good morning, everyone. Thank you all for joining us today. This morning, we reported second quarter adjusted earnings per share of $0.60, down from $1.02 in the prior year quarter. Our adjusted segment operating profit was $682 million. Over the first half of this year, we faced widespread external headwinds, including extreme weather that had a negative impact of $65 million in the second quarter and $125 million in total for the first half of the year. The team executed well to minimize these headwinds, and we undertook a series of aggressive actions that, combined with the absence of severe weather going forward, will help deliver a stronger second half and set us up well for 2020. Just as important, we continue to advance our strategic initiatives to enhance agility, accelerate growth and strengthen customer service. Our actions this quarter expand our three strategic pillars. In our optimize pillar, we completed the significant global organizational changes announced last quarter, including further reductions in management layers, centralization of activities, the elimination of positions and the early retirement offering for eligible colleagues in the U.S. and Canada. We continued to optimize our U.S. Origination footprint, reaching an agreement with Cargill to exchange grain elevators in Illinois and Indiana, and we're seeing the positive results of the turnaround efforts at our peanut and tree nut shelling business. In our drive pillar, we simplified our operational model by combining our Origination and Oilseeds business segments into a single business, Ag Services and Oilseeds, which we'll begin reporting in the third quarter. We also centralized our milling management and commercial teams in Decatur, which will offer efficiencies as we further integrate our flour and corn milling businesses. These actions are part of our wider simplification efforts as we continue to streamline decision-making…

Yes. Thanks, Juan. Slide 5 provides some of the financial highlights for the quarter. As Juan mentioned, adjusted EPS for the quarter was $0.60, down from the $1.02 in the prior year quarter. Excluding specified items, adjusted segment operating profit was $682 million, down 26%. Our trailing four quarter average adjusted ROIC was 6.9%, generating positive EVA of $42 million relative to our 2019 WACC of 6.75%. The effective tax rate for the second quarter of 2019 was approximately 13%, which included transition tax benefits and other discrete items. Excluding those items, the adjusted effective tax rate for the quarter was about 21%. For the full year, we continue to expect an effective tax rate in the range of 17% to 20%, which was our initial guidance. On Chart 19 in the appendix, you can see the reconciliation of our quarterly earnings of $0.42 per share to the adjusted earnings of $0.60. The adjustments include a charge of $0.18 per share related to asset impairment and restructuring charges, including a noncash pension remeasurement accounting charge as a result of the U.S. early retirement program; a $0.3 per share charge related to LIFO; and $0.3 per share tax benefit related to the transition tax and certain other discrete tax items. Slide 6 provides an operating profit summary and the components of our corporate line. Before I go to business segments, let me touch on some more noteworthy other items. Other business results were $11 million, below the prior year period, due primarily to insurance underwriting losses, partially offset by higher ADM Investor Services earnings. Our revised full year estimate for Other is in the range of $80 million to $90 million based upon actual and expected underwriting performance, down from the $100 million level we guided earlier in the year. In…

Thank you, Ray. Please turn to Slide 14. I'm pleased with how aggressively our team has moved to deal with some of the external headwinds that we have encountered this year. And while facing a challenging near-term external environment, we also remain focused on our long-term strategy: improving our company and positioning ourselves to capitalize on market opportunities. We are making good progress on our strategy. First, we are continuing to improve our underperforming businesses. We are seeing the benefits of our turnarounds in Global Trade, South America Origination and Golden Peanut and Tree Nuts. We have also made good progress in our Decatur complex, on lysine production and at our Campo Grande facility and see further opportunities in the back half of this year. Second, Readiness is continuing to gain speed and is helping us make ourselves faster, more efficient and more customer-focused. For example, this quarter, in order to globalize our sales standards and improve service to key accounts, we've centralized our Nutrition sales and account activities. We're also advancing our IT foundational services, rewiring our entire IT operation to be more efficient and more effective. And we're launching a new phase of our One ADM business transformation initiative, focusing on better data to enable even faster decision-making, better processes for improved reliability and flexibility and better systems for enhanced user experiences and productivity. Our team is continuing to identify and execute on new Readiness opportunities. And as I mentioned, thanks to their good work, we have delivered significant financial benefits and are on track to meet our 2019 accrued benefit and 2020 run rate goals. Third and finally, we're working to harvest our growth investments and ensure that they are fully delivering on their potential. We are ahead of our plan for delivering synergies from Neovia. As…

[Operator Instructions]. And our first question comes from the line of Heather Jones from Heather Jones Research.

I guess I want to just start on ASF. So you mentioned that you had seen early signs of that impacting feed demand. I was wondering if you could give us a sense of your estimate of the magnitude of supply that was -- that will be ultimately lost. How is that tracking relative to your initial expectations? And could you give us a sense of when you think the increase in feed demand will be of size enough to positively benefit ADM's business?

Yes. Thank you, Heather. The ASF situation is evolving pretty much as we expected or as we described in the last quarter call. The herd loss estimate in China continue to grow, and now we're talking -- last time, we talked 20% to 30%. Now we're thinking maybe 35%, and there are reports of even higher. There's also the expectation that production will continue to drop into 2020. We see that this is spreading not only inside China but also to other countries, and we have heard, of course, about Vietnam, Cambodia and Laos. We've seen domestic corn -- pork prices in China rising, and they've risen already 30% to 50% in that range year-to-date. And in the last month, it basically raised 15% versus the previous months. We've seen imports accelerating in pork. June reports about 62% increase in imports supporting to China. As we described before and we imagined, we saw the initial beneficiaries being Europe and Brazil, and they experienced export growth in the first five months of the year. Europe is up 41% to China. Brazil is up 29% in the first six months of the year. We've seen other imports coming into China in the first half. Poultry is up 49% from Brazil. Beef is up like 120-something percent with Australia, Argentina and all those countries supplying. We have seen delegations of Chinese officials looking at production facilities in Brazil and giving new permits for exports. At least we have seen about seven of those. We have seen China approving poultry exports from Russia, pork exports out of Argentina. We have seen increase in soybean meal in -- rations in China and the U.S. We have seen increase in weight on hogs in China, and we have seen a strong poultry production in China. So my point is it's developing as we expected. On the question of when it's going to impact our assets and the assets around the world or outside China, I think that China has done -- we have seen a little bit of a suppressed issue so far because China has inventory of frozen meat and because everybody that had a healthy live pig was basically sending to slaughter just before it gets infected, so to a certain degree, helping in moderation of the impact that we expect to be cut in the second half when the frozen meat inventory ends. We have said it before. We thought that maybe at the end of August, beginning of September, we may see that impact increasing. When it's going to get -- so naturally, it's going to increase first in Europe and South America, and we may see a potential impact in North America later on. I think that we will see an increased impact in demand in late Q3, early Q4 in the market with the full impact really being in 2020. So as far as we can tell, that is the best information we can provide, Heather, right now.

No, that's very helpful. And then I just have a detail-ish question. Ray, you mentioned that corporate expense is tracking below your original target. I was wondering -- and I did hop on late so you may have said this and I missed it. But anyway, could you give us more specific color on what you expect that to be, unallocated corporate for Q3 and Q4?

Yes. I think we're probably running around $175 million per quarter, around that area there on average for the last two quarters of the year based upon the kind of the run rates that we're seeing.

So Q2 was more like a true-up quarter?

Yes. Q2 was a true-up, and then Q3 and Q4 -- again, we're going to be below $700 million, but -- so when you kind of work the average itself, it's going to be around $175 million, around that area there.

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

It's actually Steve on for Vincent. [Indiscernible] if I ask a follow-on, on the other corporate line -- I'm sorry, the unallocated line. You mentioned that it's going to kind of go back to the run rate in the back half. So was the shortfall in the second quarter, was that just all accrual on the comp side? Or...

Yes. It's mainly a true-up, right? So it's a onetime true-up. And so that's the reason why when you get back to a normalized run rate, it will be running lower than what we thought. But that's why I'm saying, well, $175 million per quarter of the last two quarters approximately.

Okay. And then maybe just a question on U.S. crop production. So lot of focus on planted acreage and bushels. Given the crop got in late this year, are you seeing maybe some increased risk on test suites? And can you comment maybe on whether or not that may kind of flow through your P&L in any shape or form?

No. I think that -- and clearly, include the crop got in late. And then USDA numbers, a lot of people are looking at that. And the USDA will be coming up with the revised estimate in acreage coming up. I mean our internal viewpoint is that the acreage will come down, particularly in corn, and so probably into the mid-80s, around that area there. And what's interesting on the yield side, we still believe that the current estimates of yields are probably reasonable at this point in time. And part of the reason is like with the seed technologies and genetics, it's amazing what the -- what yields can be. So I mean our viewpoint is that, yes, acreage will come down on corn. It may creep up a little bit on soybeans. Yields are probably be in line with the USDA numbers, but we'll see. Again, we're in a critical pollination stage right now of corn, and then we'll see if -- ultimately where things will end up.

Our next question comes from the line of Eric Larson from Buckingham Research.

So the question that I have, and I -- this is starting to come up more and more. The longer our trade disputes go on with not just China, but Mexico and Canada and basically around the world, it changes behavior from not only our export partners but also the producers in those countries. And it's hard to gain share back if this continues to go longer and longer. If -- are you seeing any of that? We just saw some estimates come out for production for -- estimates for F '19, '20 production for Brazil next year. They're talking 125 million metric ton production of beans and then 100 -- over 104 million of corn, which is again, that was in the big records. And I guess my question is if we end up losing market share around the world, does it kind of change the way, one, you think about your global asset mix? And would you may have -- would you have to do some zigging and zagging to be able to account for those changes of global production?

Yes. Thank you, Eric. Yes, I agree with you, and we have highlighted this issue with the trade dispute is that people trying alternatives. And eventually, they become a little bit more comfortable with those alternatives. So this is not good for the U.S. farmer. This is not good for the percentage of U.S. in the export markets, and we hope it's going to be resolved soon. I think that the U.S. is still a very large producer and still very important to the world. So we are not past the point in which we cannot recover where we are. Regarding expansions around the world, don't forget that the U.S. is very strong. The U.S. dollar is very strong. That also pushes a little bit production to other countries, and we have seen it over the last maybe 5 to 10 years in which more emerging countries have grown, helped a little bit by the lack of competitiveness of the U.S. exports given the strong dollar. So some of that dynamics we have been dealing with. And so we've been expanding into Europe. We've been expanding into Brazil and South America. But I think that fundamentally, it hasn't changed dramatically our view of the future. We continue to make the company better. You have seen in our Origination results how some of these new services have popped up and presented good improvement versus last year, whether it's the destination marketing, whether it's stevedoring, whether it's trade finance. And so we continue to adjust our earnings. I will say you've been -- you've seen our investment in Algar in Brazil, and we continue to look at these things. As I said, I don't think it's too late, but we certainly encourage both countries to get to the table and continue discussions and find out a solution for the sake of the U.S. farmer.

Okay. Good. Then the final question is there's a lot of other things going on in China. And I think we've talked a little bit about this. Now you've got -- their corn inventories have fallen quite sharply. I believe they were as many as much as 230 million metric tons four, five years ago, and maybe that's now below 100 million metric tons. Looks like they could be having some production shortfalls, maybe armyworm is having an impact. it sounds like it's continuing to get worse. And then you've got -- you're flowing in feed demand over there at least in the near term until they rebuild that herd. Can you kind of talk how that impact might be on Wilmer? How that might affect world trading patterns? I mean there -- are those incremental factors that we might not be accounting for at this point, Juan?

Yes. It's hard for me to comment too much on Wilmer since I'm an insider, being in the Board. But I would say -- I would remind you, Wilmer has a very diversified business model. So whether they are in tropical oils and they are in sugar, in consumer pack, and they are in 13 countries in Africa through associates and all that and also in India. So I would say it's hard to pinpoint exactly one point making a significant impact on Wilmer. So we're still very, very bullish about our ownership there and their prospects for growing, especially their investments in China into the future. When you think about China, you described it correctly. I think their corn inventories have dropped and armyworm continues to spread in China. Although I think if the farmer will follow the recommendations of the government, there are tools to correct that. But they still need to apply all those pesticides. I think the other issue that you didn't mention that I think is important in the dynamics bringing China into the equation is ethanol. China has put this mandate of 2020 in ethanol. They really need it for breathing air quality, and I think that they will come through with that. That creates -- as you know, you have heard me saying before, by 2020, they will have 50 billion gallons of gasoline demand. 10% of that will be about 5 billion gallons, of which they internally can produce about 2 billion of it. So they may import 2 billion to 3 billion gallons between Brazil and the U.S. So that is the trigger or the thing that the U.S. margins need for actually get out of this load that we are in, in terms of ethanol margins. So that, to us, is the biggest impact of a potential resolution between the trade dispute between the U.S. and China. And it is a no-brainer because it's a win-win. China needs this to comply to -- with their promises and their goals, and the U.S. needs this to help this industry and to help the U.S. farmer. So I think that's something that we put a lot of faith on because, as I said, it makes a lot of sense and because there are no other way for China to get this product from the world. Brazil will not be able to supply 3 billion gallons overnight.

Our next question comes from the line of Tom Simonitsch from JP Morgan.

So looking at U.S. export volumes in Q2, particularly in corn, how much of that weakness do you attribute to supply challenges and the weather as supposed to market demand?

Yes, Tom. I think that the river logistics in general caused an abnormally slow U.S. exports in Q2. And so I will put a lot of the blame in the weather because regardless of the demand that was out there -- and we couldn't have a competitive fray it to even participate in that because we couldn't deliver. So I would say -- I certainly put a lot of the weight on the weather.

Okay. And just following up on ethanol. Absent exports to China, what actually can turn things around for you in that business? In particular, can you comment on your assumptions for -- small refinery exemptions in 2019?

Yes, John. I think the -- we're starting to see -- with negative EBITDA margins in the industry persisting, you're actually starting to see smaller refineries, ethanol refined shut down now. And so if these things persist, I could see more capacity coming off-line. I mean this industry is not sustainable long term with negative EBITDA margins. And so as we kind of look through the rest of the year, and as you know, normally, July, August, summer driving season, normally, this is the peak period in terms of demand and this is normally when inventories actually come down, right? But if you take a look at our inventory levels in the industry, we're actually up versus last year, the middle of the year. So I do think that there is going to be more pressure on the industry to reduce production just simply due to negative EBITDA margins. I do believe that the focus on cost -- and that's what ADM has been doing, we're focusing on driving cost down in our ethanol productions. And so therefore, from our perspective, we're carefully managing production relative to margins with a focus on making sure that we're one of the low-cost producers in the industry here. I mean the small refinery exemptions are out there. We think that -- and actually, that's a negative for the industry here. We hope that as we kind of proceed forward in terms of looking at, for example, E15 -- year-round E15 in order to try to drive some incremental volumes and look for more export markets, in Mexico, as an example, and actually, Juan talked about China. I mean the industry needs to continue to expand the markets around the world in order to try to find additional volumes for the industry. I mean, just for perspective, I mean, the industry has practical operating capacity of low over 17 billion gallons. And we're running -- right now production rates is around 16 billion gallons. And so I think there is an opportunity for the industry to further consolidate in the future as we kind of move through the next months and years of industry here.

Our next question comes from the line of Ken Zaslow from Bank of Montreal.

It's Ken Zaslow. Just a couple of questions. My first question is can you talk about the cost savings program? It seems like you are doing more aggressively on the cost savings program. How is that progressing? Is that -- how much is going to be falling to the bottom line? And how does that set you up for 2020 in terms of earnings potential? Can you start there?

Sure, Ken. Yes. So Readiness and -- continues, and then we feel very good about how we're tracking for the $1.2 billion run rate benefit by the end of 2020 as originally outlined. We are on track on run rate. We are on track on accrued savings in the 2019. And fundamentally, I think it's spreading around the organization, bringing simplicity and bringing everything that you see in all changes: the consolidation of milling with corn into Carbohydrate Solutions and the moving of some of the people in milling to Decatur to consolidate that makes better decisions, avoid about duplications, the consolidation of Origination with Oilseeds. I mean -- so the reduction in P&Ls, the standardization around the company. So when we look at 2020, if you compare it to 2019, Ken, and why we feel good about it is think about that this year, so far, we had $125 million of weather impact that hopefully, in a normalized weather environment, that will not repeat next year, so $125 million. The full year interventions that we did with the early retirement window and some of the positions consolidations that we had has an annual impact of $200 million, of which $80 million will account in 2019. So you have an extra $120 million for the full year of that coming into 2020. Then you have Readiness that we expect -- in order to complete that $1.2 billion, we expect about $200 million to $300 million be in the 2020 accrued results for Readiness. We still have some improvements area that we need to put behind. We have this year impacts on Decatur, impacts on lysine that we -- they're going to be completely resolved by the time we get, of course, to 2020. So that will be about $50 million, give or take, that we're now going to have. And then we're going to have some of the full impact of some of the investments that we have made in either Campo Grande from a growth perspective or even in Ziegler and Florida Chemicals, on Neovia that will add another $100 million to $150 million. So even when you account for maybe extra IT investments or extra inflation next year of about maybe $100 million, just to make it simple, I could see about $0.5 billion to $600 million OP improvement or about $0.70, $0.85 per share improvement versus what we see here, provided, as I said, normal weather conditions that -- I'm sure we're not going to getting exactly that, but just for our reference of how I'm thinking about 2020. That helped you? Is that helpful?

Yes. The $125 million for the weather, just to be clear, is -- that is the actual logistics? That's not talking about bases and all the other...

No. No. That's basically Transportation and the impacts of our plants being down by not being able to produce on them because of either flooding or extreme cold.

Yes. But that doesn't include the basis, the run-up because it is hard to get product? It doesn't...

No. No.

So all the market-related issues relative to the weather, does that include that?

No, absolutely not. This is just lost production.

Can you put a framework about what you would think weather would have been just on the market conditions? Or is that too hard to do? I just feel like there's [indiscernible] in there, too.

No. I think I will be guessing at this point in time. I don't want to. No.

Our next question comes from the line of Michael Piken from Cleveland Research.

Just wanted to sort of touch base on the Neovia side and really the Nutrition business. It looks like you're saying that Neovia is on track to meet your prior growth target. So does that mean that the rest of the business would have been down, excluding Neovia within Nutrition? And if so, could you talk to some of the factors why?

Yes. So we are very pleased with Neovia. We are going through the integration process, and we identified -- remember, when we launched this or when we announced the acquisition, we talked about €50 million of synergies by year four. We continue to say that we're probably going to achieve the same amount in half the time, so in about two years. So we're going to exceed the synergy targets. When you look at the impact, we're very pleased with the impact. The negative impact that we have had in our P&L, in our legacy, Animal Nutrition P&L, is certainly ASF got impacted pricing in lysine. And we still have some issues with finalizing the fixes on the plant here in Decatur. Also, Michael, you need to remember the last year from the previous -- so the first half of last year has a big boost on some of the vitamin issues that happened in the industry that we took full advantage of. That was a one-off, of course, because of a fire. So that, we don't have it this year. So I would say in Nutrition, in general, things are going as expected. I think that Ray mentioned it before. It probably was a little bit disappointing quarter given some of the customer timings that we faced. We were expecting a little bit more of that. We also have a little bit of a shortfall in a couple of our plants mostly because we were trying to run that at very high levels and explore some of the high levels, and we couldn't ramp-up as quickly as possible. On the customer timing that we saw in the Q2, we have seen already July came back strongly and August maintaining the forecast. So we think that those issues are going to put be put behind already in Q3. So we feel good about how the Nutrition platform is developing. Customers are looking for more healthy solutions, so supplements are going well. You look at our growth in Health & Wellness in OP is astronomical. We look at all the demand from alternative proteins that are coming, not only driven by the desire of the consumer to experiment with something new, but also by the shortfall in proteins that we have in the world right now with more than 10 million tons coming. There is renewed interest in alternative proteins, and we have the broadest portfolio of alternative proteins. And to be honest, when we formulate alternative protein solutions, we benefit a lot from being integrated into flavors, into colors, those -- texturizer, those are important products in the formulation. So feeling very good about Nutrition actually. And I think Ray mentioned in his prepared remarks, we expect Nutrition to have a significant year-over-year improvement in Q3, and we're still seeing that.

Okay. Yes. And just a follow-up on that one. Like could you maybe quantify a little bit in terms of what the market opportunity might be for ADM in terms of plant-based proteins? What type of growth rate we might expect from Nutrition in the outer years, either a volume basis or a need basis?

Yes. So think about it. If we look at QSRs and people asking for more alternative burgers, if you will, I mean, they have a climb recently of about 10%. So we see ourselves very well positioned in that area. Our teams are expecting growth of about 25% in that area. It is relatively a new phenomenon in that sense. We've been supplying alternative proteins for a very long time, but some of this excitement about the alternative burgers are a lot driven by start-ups. So their volumes are still not huge. So we haven't -- you haven't seen all of that in our P&L yet, but we are exceptionally positioned to do that. We have about five plants of different proteins around the world, whether you count soy-based proteins or pea protein or edible beans proteins. We have two plants that are just ramping up at this point in time, so you haven't seen it in the P&L yet. You're going to see the full benefit of that in 2020 and 2021. So you should expect a big contribution from that -- a big growing contribution from that in our P&L over the next two years.

Our final question today comes from the line of Adam Samuelson from Goldman Sachs.

So a lot of ground has been covered. I was hoping to -- so first, just Readiness and some of the reorganization and maybe just a little bit more color on the -- or -- and actual business level impact of consolidating Oilseeds and Origination. And I guess moving the Brazilian Origination under a different home is probably the biggest single change there, but just making sure I understand kind of -- was there a meaningful cost opportunity? I don't think either one had a meaningful headquarters function. But just strategically, kind of what has that enabled you to do that you weren't doing previously?

Yes. Listen, Adam, I think that the combination of two businesses -- so first of all, let me clarify on Brazil. Origination was in the P&L of Oilseeds in Brazil, so they have been run and integrated. But now it doesn't change much in the sense that the rest of the world now matches the Brazilian model, if you will. So everything is in one P&L. I guess what you have to see here is the same, as I said, trend that we showed when we put together corn with milling in Carbohydrate Solutions. It's our trend towards simplification, towards making decision-making better and avoid duplication and reduce the silos, if you will. So I think that the teams are making better decisions. There is certainly cost savings on that, but I will say more importantly is the further refinement and coordination on risk management processes, reducing the level of internal transactions. Sometimes, we have too many of those transactions. There are some businesses that have in excess of maybe 40% of the total transactions just being internal. So imagine the simplification in terms of processes and documenting and processing all these transactions. And certainly, centralizing some of the decision-making in the Global Trade and all that, having both businesses making this -- or having the same view is very important. So regardless of how well they were communicating before, that is absolutely seamless today. So we're very pleased with the early stages of that.

Okay. That's very helpful. And then just in Oilseeds. And you covered a little bit of this in the conversation around ASF, but just would love to get kind of the forward view on the crush outlook around the world as we go into the second half and the first half of next year. And specifically, kind of what impact does a -- if any, does a smaller U.S. soybean and crop and a trade deal or lack thereof with China play into that outlook?

Yes. So let me start by addressing that in parts. So from a trade deal perspective, I think Ray mentioned also before and it's our belief that -- now if we look at the combined unit of Ag Services and Oilseeds, the impact of resolution or no resolution is kind of will be a little bit muted. It may be a little bit better for Origination in North America. If there is a resolution, a little bit worse maybe for Oilseeds in North America and for Origination in South America and vice versa. I think the biggest impact of the resolution of a trade dispute with China will be on ethanol, and that is how we believe it's going to play out. In terms of Oilseeds, in the U.S., we're feeling very good about it. As you know, board crush rallied during the quarter and then came back to where -- basically where it started the quarter. We had an opportunity during the quarter to book some margin levels for Q3, so we have good confidence and good visibility into what Q3 is going to be. Q4 is a little bit more open, but demand continues to be strong. Nutrition -- I mean, soybean meal demand, we expect outside China to be somewhere between 3% and 4%. So it continues to be very good. And soybean oil demand remains strong as well in the U.S. So we're also going to have the North American harvest in the Q4, which normally bring increased availability of soybean. So -- and regardless, there is a huge carryout of soybeans in the North America. So we expect that any potential spike in basis will be short-lived in that sense. If we look at the different regions, if you will. So we look at --…

We have no further questions in queue. I'll turn the call back to Victoria de la Huerga for closing remarks.

Thank you for joining us today. Slide 16 notes an upcoming investor event in which we will be participating. And as always, please feel free to reach out to me to follow up with any additional questions you may have. Have a great day, and thanks for your time and interest in ADM.

This concludes today's conference call. You may now disconnect.