Headlines:
- ADM profits miss expectations, as oilseed crush margins fall
Agribusiness giant Archer-Daniel-Midand reported lower than expected profits, as the company reported weak results from its global trade desk, and oilseed processing profits little improved, thanks to lower crush margins. ADM’s agricultural services segment benefited from strong “strong global demand for US commodities, “which supported export volumes. But the global trade desk lost money, thanks to lower marketing opportunities, and poor execution. ADM profits tumbled 41% year on year, to $424m, due largely to the one-off benefits from sales last year, in the three months to December 31. Adjusted profits were up some 15%, to 75 cents a share, but still short of the 77 cents a share forecast by a poll of Reuters analysts. Revenue edged up 0.3%, to $16.50 in the period. For oilseed processing, the company said “results were comparable to the challenging year-ago period”. “In crushing and origination, South America results were impacted by reduced volumes as a result of the short 2016 soybean and corn crops in Brazil. Global soybean crush margins were negatively impacted by ample substitute proteins worldwide, despite strong global crush volumes,” ADM said.
- Tyson shares see sharp reversal on legal worries
Shares in chicken producer Tyson Foods soared on sharply higher profits, before fresh legal troubles sent them plummeting back down again. Tyson, the largest US chicken processor, which is known for its pork and beef business, and the sale of prepared foods, issued an upbeat outlook for the rest of the year. Shares surged initially, but in filing its results with the securities exchange commission, the company also revealed a subpoena from the US government, which it believes is related to a civil case for price fixing. Share prices tumbled over 5% as the market absorbed the news, trading down 3.3% on the day in midday deals in New York, at $63.23.
Summary:
With little fanfare grain and soybean futures edged higher today. The next WASDE Report is scheduled for this Thursday at noon eastern and traders pushed the grains higher ahead of the report. At the close March Corn futures were up 5 cents and December futures were up 4.25 cents. Like Corn, Soybean futures has traded somewhat sideways over the last 3-4 trading days but it too ended the day on decent advance. March Beans were up 5.50 cents and November Beans were only up 1.50 cents. The price charts do show that Beans is in a weaker position than that of Corn. Corn looks like it is poised to break its late January highs, meanwhile Soybean is struggling to even reach its January highs. Wheat responded to its big down day yesterday with a big up day today. It was the biggest mover on the day in both points and percentage. The March contract was up 7 cents with the December contract advancing 3.75 cent. Volume overall has been drying up ahead of the Thursday and there seems to be a bit of a “Trump Effect” where participants are wanting to wait for more economic detail ahead of committing to market direction.
