Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from David Newman - National Bank Financial.
David Newman - National Bank Financial
A couple of quick questions on the guidance. Obviously the crop has a prospect of looking pretty good here in terms of volume and also in terms of the quality, but it is a little bit late in the season. What sort of risks are we looking at here? How many days of good weather and it does look like we’ve got the prospects of fairly decent weather right now, how much do we need to get this crop in the bin?
Francis J. Malecha
I think if we have three good weeks of weather and you don’t get rains in between, that does kind of slow you down because the later in the season the longer it takes to recover from a rain, would go a long way in getting the crop in the bin.
David Newman - National Bank Financial
And given historic precedent, what do you envision right now? What’s your company perspective on where it might end up being given the typical seasonal weather patterns and of course we’ve not seen that more recently. But as you look out what do you think the crop could be subject to some frostbite or what do you think?
Francis J. Malecha
I think we’re probably far enough along on the crop development where frost would have a minimal impact on quantity; maybe a slightly higher impact on quality. But I think minimal. The biggest issue as I see it would be rain and if we get that open three weeks of weather, then I expect that we’ll have about an average quality crop.
David Newman - National Bank Financial
In terms of handle for next year, do you sort of forecast around 14 million tonnes thereabout is what you think you could probably handle?
Francis J. Malecha
We don’t forecast our shipments but what I would say is we are going to have a bigger crop. We have strong markets. We’d expect the grain to move, farmers to take advantage of these markets and sell the grain, and we’re still expecting a strong margin opportunity.
David Newman - National Bank Financial
Just switching gears on the gross margin for Tom. Obviously it came in a little higher than expectations. Your guidance has been moved up a little bit. If you strip out and you looked into next year, what would be the normal or base case sort of margin assumption we should use? I think it’s been around the mid-20s before. Is there something that you’re seeing operationally now that would lead you to believe that maybe it’s towards the $27.00 to $28.00 range now if you strip out some of the pricing volatility?
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