Weak exports, grain glut hits ADM Q3 profits

A fall off in US agricultural exports, a glut in global production and stocks of grain and poor oilseed crushing margins meant agribusiness giant Archer Daniels Midland (ADM) posted worse than expected profits for the third quarter.

Profits at ADM’s Agricultural Services division fell to $87m, down from $195m, while its Oilseeds division posted profits of $119m, down from £145m on the previous corresponding period, according to the company's third quarter earnings report, published Tuesday.

ADM did not give production data, but its results appear to be hampered by weak exports amid fresh competition from Argentina as well as poor crushing margins for oilseeds.

Net profit fell almost by 50% to $192 million over the quarter compared to $341 million in the previous corresponding period.

ADM announced in May that the global grain glut was expected to see a decline in profits.

Global production of grain is expected to hit 2.07 billion mt in the 2017/2018 harvest, according to the latest forecast from the International Grains Council, marking the second highest level on record after the 2017/2018 season.