ADM Quarterly Profits Surge, Driven by Corn Exports to China
Archer Daniels Midland (ADM) reported a 52 percent jump in quarterly profits due to strong exports and oilseed crushing margins - with revenue jumping 40.8 percent to $22.92 billion, surpassing expectations of $18.64 billion.
Strong corn sales to China resulted in a jump in exports for the quarter ending June 30. However, China’s farmers have increased their corn planting to capitalize on record prices, indicating that demand from imports will cool.
But for now, strong demand for exports and from the animal feed industry have left U.S. stockpiles of corn, wheat, and soybeans at their lowest points in nearly a decade, as prices soar to multi-year highs.
At the same time, unfavorable weather over the past two-to-three weeks, including a drought that has devastated Canada’s canola crop, and drought and frost conditions in Brazil that have caused serious damage, have resulted in the world’s farmers losing 15 million tons of crop production - creating conditions where the U.S. can fill the gaps.