September 10, 2012

 

Canada to produce above-average crops

 

 

In the early stages of harvest, western crops are producing above-average yields and quality, which looks to be bigger than usual.

 

Canada's biggest grain handler Viterra, which is in the process of being taken over by Glencore International, said Thursday (Sep 6) that the quality of the six major grains -- wheat, barley, rapeseed, oats, flax and peas -- looked promising but would depend on favourable Canadian harvest weather over the next couple of months.

 

In South Australia, where Viterra is also the dominant grain handler, crops have had good growing conditions throughout the state. Quality of the crops, which are mostly wheat and barley, appeared good, the company said.

 

Viterra reported a 10% fall in quarterly profit after taking charges related to taxes and early redemption of bonds.

 

Grain handling and marketing revenue rose to US$2.21 billion in the third quarter from US$2.19 billion a year earlier, mainly due to higher commodity prices, Viterra said in a statement.

 

Lower global shipping volumes "were offset by stronger grain handling margins and solid results from the company's international grain marketing activities," the company said.

 

Agricultural products revenue rose 16% to US$1.31 billion, owing to strong fertiliser pricing and higher sales of crop protection products.

 

Viterra's processing segment saw higher revenue at US$326.7 million, on improved results from rapeseed, malt and oats operations, "in part offset by (Viterra's) pasta operation, which is experiencing competitive pricing pressures."

 

Processing margins per tonne slipped on "lower pasta margins and a change in product mix, as there are now more rapeseed volumes given the new crush facility in China."

 

Net profit fell to US$111 million, or US$0.30 per share, from US$123 million, or US$0.34 per share, a year earlier. Overall revenue rose 7% to US$3.64 billion.

 

Glencore has bid US$6.1 billion for Viterra. Under the deal, which is awaiting regulatory approval from China, Glencore plans to sell some parts of Viterra to Canadian fertiliser company Agrium and private Canadian grain handler Richardson International.