Red-Hot Crop Markets to Give Years-Long Boost to Global Traders


·         Chinese demand, adverse weather tighten global supplies

·         Corn, soybean and wheat futures are at multiyear highs


By Michael Hirtzer and Isis Almeida, Bloomberg

April 26, 2021


Voracious crop demand in China and tight global supplies have helped agricultural firms Archer-Daniels-Midland Co. and Bunge Ltd. outperform the broader S&P 500 this year, and the good times may last a bit longer.


With top pork producer China rebuilding its hog herd and adverse weather hitting crop yields, it’s likely supply imbalances will persist and benefit the big traders who buy, store, process and ship grains and oilseeds. ADM, the largest publicly traded crop handler, will provide some insight on its first quarter, when the Chicago-based company reports earnings Tuesday.


“Industry economics are the strongest since 2011-2014,” said Bank of America analyst Luke Washer, who initiated a buy rating on ADM last week. “ADM will be a key benefactor of a renewed ag cycle that is expected to last a few years and potentially much longer.”


ADM shares have climbed about 18% in 2021, compared to the S&P 500 gains of 11%. Shares for Bunge, which reports earnings May 4, are up about 30% year-to-date...


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