ADM to start ethanol production in Brazil - report

SAO PAULO, July 28 (Reuters) - U.S. food and grains company Archer Daniels Midland (ADM.N) will start cane-based ethanol production in Brazil with local partners, a Brazilian newspaper said on Monday.

The company will participate in joint ventures to open two mills, both in center-western Goias state, financial newspaper Valor Economico said.

Each mill will have capacity to crush 3 million to 4 million tonnes of cane per year. The first one should come on stream in 2010, the newspaper said, adding the investment was expected to be announced officially in August.

A spokesman at ADM's local subsidiary would not confirm the information.

A leading corn-based ethanol producer in the United States, ADM had been looking for opportunities to enter the Brazilian ethanol market for years, market sources say.

The company already is a top grain processor and trading house in the South American country. (Reporting by Inae Riveras; Editing by Walter Bagley)