Archer Daniels Midland’s (ADM) net profits for the second quarter surprised industry analysts by doubling to $566 million due to the ongoing trade tension between the U.S. and China along with drought conditions in Argentina.
ADM’s origination business, which includes grain trading, posted operating profits of $189 million for the quarter - triple what they were for the same time period a year before. Corn, soybeans, and wheat all saw higher volumes and margins as supplies out of Argentina dried up and China’s shift to buying from South America resulted in other buyers turning to the U.S.
Oilseed operating profits increased 70 percent to $341 million on the back of market dislocation translating into record high volumes and strong margins.
In May ADM announced expectations that its Q2 results would take about a $30 million hit after China imposed $34 billion in tariffs on imports. However, the damage was not as severe as expected and was easily offset by strong results in other business areas.
Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at email@example.com.