World Grain - November 2012 - 12

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ADM ups stake in GrainCorp with aim to acquire business
SYDNEY, AUSTRALIA — Archer Daniels Midland Co. (ADM) announced on Oct. 19 that it has acquired 14.9% of GrainCorp Limited shares. ADM previously held economic interest in 4.9%, and on Oct. 18 ADM acquired an additional 10% economic interest at a price of A$11.75 per share. Based in Sydney, GrainCorp has a market capitalization of $1.8 billion. ADM, headquartered in Decatur, Illinois, U.S., has approached GrainCorp with the aim of arriving at an agreement under which GrainCorp’s board of directors would recommend to its shareholders a cash acquisition by ADM. Any agreement would be subject to satisfactory due diligence, regulatory approvals and other conditions. “Our investment in GrainCorp is part of our ongoing portfolio management and is consistent with our strategy of growing our Agricultural Services and Oilseeds businesses by investing in key supply regions outside the U.S.,” said ADM Chairman and Chief Executive Ofﬁcer Patricia Woertz. “GrainCorp is a well-managed company, and together with ADM would be better positioned to connect Australia’s farmers with growing global demand for crops and food, particularly in Asia and the Middle East. We anticipate that an ADM acquisition of GrainCorp would meet ADM’s key ﬁnancial hurdles.”

CME to acquire Kansas City Board of Trade
CHICAGO, ILLINOIS, U.S. — CME Group on Oct. 17 announced it has signed a deﬁnitive agreement under which it will acquire the Kansas City Board of Trade (KCBT). Under the agreement, CME Group will pay $126 million for the exchange, and members additionally will receive a special distribution of excess cash, concurrent with the closing. The KCBT, which is organized as a for-proﬁt corporation, is the leading futures market for hard red winter wheat. Under the agreement, the CME committed to maintain for at least three years a committee of KCBT market participants to advise on hard winter contract terms and conditions. The CME also agreed to “maintain the historic KCBT trading ﬂoor in Kansas City” for at least six months. “Global agricultural market participants continue to depend on liquid, transparent risk management tools for price discovery in both established and emerging economies,” said Terry Duffy, CME Group executive chairman and president. “Building on two rich legacies, the combination of KCBT hard red winter wheat products with our deep and liquid CBOT soft red winter wheat futures and options markets will provide new trading opportunities for market participants around the world — both on the trading ﬂoor and on the screen.” Jeffrey Borchardt, president and chief executive ofﬁcer of the 156-year-old Kansas City exchange, emphasized the degree to which trading in wheat futures and options has changed through its history, most recently technologically. “CME Group’s position as a global leader in electronic trading access and capability makes it an ideal partner for the future of KCBT’s hard red winter wheat contract, the global benchmark for bread wheat,” Borchardt said. The KCBT board unanimously approved the transaction, which is expected to close later this year, pending approval by KCBT shareholders and regulators, expiration of the applicable Hart-Scott-Rodino waiting period, and completion of normal closing conditions. With the completion of the transaction, the Minneapolis Grain Exchange, which trades hard spring wheat, will be the only remaining independent wheat futures exchange in the United States.

Canadian wheat output up 6% from 2011
OTTAWA, ONTARIO, CANADA — Production of all wheat in Canada was estimated up 1% from the August forecast and up 6% from 2011, while canola outturn was expected down 13% from August and down 8% from last year, Statistics Canada announced on Oct. 4 in its September Estimates of Production of Principal Field Crops report. “Prairie farmers anticipate higher wheat production as well as a decline in canola this year,” said Statistics Canada in its report. Based on data collected from Sept. 4 to Sept. 11, total 2012 Canadian wheat production was estimated at 26,733,000 tonnes, down 1% from 27,013,000 tonnes forecast previously and up 6% from 25,261,000 tonnes in 2011, Statistics Canada said. By class, production of spring wheat other than durum was estimated at 18,641,000 tonnes, down 2% from August and up 3% from 18,031,000 tonnes in 2011, durum at 4,398,000 tonnes, up 3% from August and up 5% from 4,172,000 tonnes last year, and winter wheat at 3,694,000 tonnes, up slightly from August
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and up 21% from 3,058,000 tonnes in 2011. Statistics Canada estimated 2012 canola production at 13,359,000 tonnes, down 13% from 15,410,000 tonnes forecast earlier and down 8% from a revised 14,493,000 tonnes in 2011. Oats production was estimated at 2,939,000 tonnes, down slightly from the prior forecast of 2,994,000 tonnes, and down slightly from 2,997,000 tonnes in 2011. The 2012 barley crop was seen at 8,591,000 tonnes, down 10% from 9,508,000 tonnes forecast earlier and up 11% from 7,756,000 tonnes a year ago. Corn production was expected to be 11,576,000 tonnes, down 1% from 11,703,000 tonnes in August and up 8% from 10,689,000 tonnes in 2011. Soybean outturn was estimated at 4,280,000 tonnes, down 3% from 4,405,000 tonnes in August and up slightly from 4,246,000 tonnes last year.
November 2012 / World Grain / www.World-Grain.com

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World Grain - November 2012

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