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Archer Daniels sees bumper crops driving profits

  • Archer Daniels Midland (ADM +3.7%) powers higher after reporting better than expected Q2 earnings, citing strong U.S. exports and demand for ethanol.
  • ADM President Juan Luciano said on today's earnings conference call that a second straight year of bumper U.S. crops will boost ADM's grain-trading profits by driving greater volumes through its trade and transportation network.
  • ADM already is benefiting from rising U.S. grain and oilseed output, with crop-trading income rising about eightfold in Q2 to $115M, as ramped-up exports improved profits over drought-crimped results a year earlier.
  • Luciano also expects strong harvests in North America and Europe to help lift quarterly profits in ADM's agricultural services unit to the high end of the division's historical range of $200M-$250M.
  • Also, ADM says it expects to have a signed agreement to sell its global chocolate business by the end of Q3.

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