Archer Daniels Midlands Co’s fiscal second quarter earnings rose 29 percent as it took advantage of surging exports demand for grains and favourable ethanol margins, pushing the company’s stock to a high not seen in more than 20 years
The grain processor and merchandiser, which was caught off-guard in the summer by the timing of a Russian grain export ban, began benefiting from tightening global supplies toward the end of 2010. Its results for the quarter beat analysts' expectations, with shares up 6.4 percent to US$34.75 in recent trading.
Earnings were driven by ADM's agricultural services division, which handles and transports grain from farm to market, relying on a network of elevators, barges and ports. Profits in the segment nearly tripled as the Decatur-Ill.- based company reported record exports.
World grain supplies have grown precariously tight, which largely benefits global grain merchandisers such as ADM, as customers are forced to find supplies in new and distant locations. Yet the company wasn't able to capitalize initially, seeing profits fall as a drought in Russia last summer whipsawed global crop markets. Read more...
This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.
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