TORONTO, ONTARIO, CANADA — Ceres Global Ag Corp. announced on Jan. 6 that it expects to incur a durum wheat loss of approximately C$11.7 million ($8.9 million) with its third quarter results ended Dec. 31. The loss, which is consistent with International Financial
Reporting Standards, is due to the negative impact that durum wheat price declines had on the value of the company's existing grain inventory at the end of the quarter, Ceres said.
As a result of the durum wheat loss, the company expects to incur a consolidated loss of C$13.5 to C$15 million ($10.3 to $11.5 million) in its third quarter. Ceres expects to report its full third-quarter results after market close on Feb. 10.
"While we make every effort to monitor grain prices and mitigate our risks through active hedging against futures prices, the amount and speed at which durum wheat prices have declined is unprecedented given the amount of new supply coming to market," said Patrick Bracken, president and chief executive officer (CEO) of Ceres Global Ag Corp. "The loss is a material development and its disclosure is consistent with our objective of transparency. It's important to understand that the loss has no reflection on the quality of inventory being stored."
Ceres provides grain origination, storage, handling and trading services and currently has more than 42.1 million bushels of assorted grains, including oats, rye, and durum wheat at its eight storage and handling facilities in Minnesota and New York, U.S. and Ontario, Canada.