ADM projects strong, export-led profit in last half of 2020 - Metro US

ADM projects strong, export-led profit in last half of 2020

FILE PHOTO: The Archer Daniels Midland Co. (ADM) logo is displayed on a screen on the floor of the NYSE in New York

(This July 30 story officially corrects paragraphs two and four to remove reference to record Q4 profit, after ADM says CEO misspoke and meant record exports, not profit)

CHICAGO (Reuters) – Agricultural commodities trader Archer Daniels Midland Co <ADM.N> expects a groundswell of export demand in the second half of 2020, led by robust purchases by China, as the coronavirus pandemic fuels food security concerns around the world, the company said Thursday.

Ample U.S. supplies of crops like soybeans, corn and wheat could help propel exports to record levels in the fourth quarter, Chief Executive Juan Luciano said during a quarterly call with analysts.

After record export volumes from South American facilities helped ADM deliver a stronger-than-expected second-quarter profit, Brazilian soy stocks are nearly depleted, Luciano said. The United States will be the prime supplier to the world, he added.

“The U.S. export market is setting up … for very good times on very solid global demand and competitive prices,” Luciano said. “We do expect large programs for corn, soybeans … as well as wheat and soybean meal for Q4.”

Global agribusinesses like ADM and rival Bunge Ltd <BG.N> are among the companies that have fared better than expected during the pandemic despite food supply chain disruptions and volatile markets.

Bunge raised its full-year outlook after reporting a stronger-than-expected quarterly profit on Wednesday following record Brazilian crop exports.

Both companies have reported minimal disruptions to operations due to COVID-19.

China has recently been actively buying U.S. soybeans and corn, including its largest ever single-day corn purchase reported on Thursday.

However, China will need significant buying for the remainder of the year to reach the $36.5 billion in purchases promised in its Phase 1 trade deal signed in January.

Luciano said China needs about 25-26 million tonnes of soybeans for the remainder of 2020, about half of which is already booked. The rest will be U.S. beans shipped in the fourth quarter, he said.

(Reporting by Karl Plume in Chicago; Editing by Bernadette Baum)

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