Grain trader ADM’S profit jumps 74% on strong demand

CHICAGO: GLOBAL grain trader Archer-daniels-midland Co (ADM) reported a 74% rise in secondquarter profit on Tuesday, benefiting from high demand for grains and tighter supplies following Russia’s invasion of Ukraine.

Shares jumped 3 per cent in pre-market trading. Grain supply-chain middlemen like ADM and its peers have seen increased demand for crops they ship around the world as the Ukraine war cut off shipments from the breadbasket region around the Black Sea. The war exacerbated already thin supplies of grain and oilseeds ater weather-reduced crops in South America and other key production areas.

“We expect the combination of our strategic actions and continued good demand for our products to propel very strong earnings in the second half of 2022,” Chief Executive Officer Juan Luciano said.

Adjusted operating profit in ADM’S core agricultural services and oilseeds unit rose to $1.12 billion from $570 million last year. The unit’s North American results fell from last year, though ADM said export volumes were strong. South American results were higher.

“Global trade had an outstanding quarter,” the company said.

ADM has predicted that global supplies of key crop staples will remain tight for at least two years amid shipping disruptions from the war.

The first shipments of Ukrainian grain could leave Black Sea ports within days under a Unbrokered deal, though, the United Nations and Ukraine said on Monday, raising some expectations for supply increases.