GRAIN HIGHLIGHTS: Top Stories of the Day

Features Dow Jones Newswires

TOP STORIES:

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Grains Slide on Export Woes, Growing Yields

Grain futures fell Tuesday as big U.S. yields and stiff export competition depressed corn and wheat markets. Soybeans were mixed.

Prices for wheat declined for the fifth straight day, hitting the lowest level in nearly two months. Contracts for the grain succumbed to pressure from technical selling and robust exports from Russia, a key competitor for U.S. wheat shipments. Russian wheat exports are expected to hit a record this year, according to the U.S. Department of Agriculture, signaling to traders that U.S. wheat needs to trade at a lower level in order to win export business.

Growing Farms Keep Archer Daniels Midland in its Toes -- Market Talk

11:26 ET - As farmers in the U.S. and Brazil expand acreage and absorb smaller farms, grain companies like Archer Daniels Midland are adjusting to keep farmers' business. When farms get big enough they can start running their own storage and trucking operations, often cutting out local or regional grain companies that offer similar services. ADM CEO Juan Luciano says his company's railroad-linked facilities, ports and processing plants remain important destinations for big farmers looking to sell their grain, but ADM has also been developing more financial and logistics services that many farmers haven't yet started doing for themselves. (jacob.bunge@wsj.com ; @jacobbunge)

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STORIES OF INTEREST:

ADM Doesn't See More Capital Going to Grain Trading -- Market Talk

10:23 ET - After mining giant Glencore confirmed a deal approach to grains trader Bunge earlier this year, some investors speculated whether Archer Daniels Midland could present a rival suitor for Bunge, as grain traders struggle against a persistent crop glut and analysts look for consolidation to answer that. ADM executives, however, say they intend to invest less in their own grain trading operations, instead directing capital toward flavorings and ingredients businesses that typically carry higher profits. In grain trading, "we feel we need less capital going forward in that business," ADM CEO Juan Luciano says on 3Q conference call, describing its existing network of grain elevators and ports as "complete." Luciano doesn't address dealmaking in the sector. (jacob.bunge@wsj.com; @jacobbunge)

Farm Sector Headwinds Continue for ADM -- Market Talk

9:12 ET - A tough agricultural market isn't letting up for Archer Daniels Midland, as the grain trading and processing company reports 3Q results that undershoot Wall Street's expectations, including in its crop merchandising and oilseed crushing units. Stifel analysts see "little change to the narrative" facing Archer Daniels: North American grain exporters like Archer Daniels face stiff competition from rivals in South America and Eastern Europe, while profit margins in soybean processing have been under pressure around the world. ADM shares down 3.2% in premarket trading after earnings of $192M come in 44% below the same period a year ago. (jacob.bunge@wsj.com; @jacobbunge)

Mosaic Shares Jump on Higher Profits -- Market Talk

10:39 ET - Mosaic shares soar as higher potash and phosphate prices lead to surprisingly strong profits for the fertilizer manufacturer. Strong global fertilizer demand boosted the company's earnings even as Hurricane Irma led to 220K tons of lost phosphate sales. Mosiac CFO Rich Mack says the storm prompted a week's worth of downtime at the company's Florida plants, and cost it $35M in the month of September. CEO Joc O'Rourke attributes strong demand for Mosaic products to farmers the world over who are looking to replenish soil nutrients following multiple years of bumper crops. MOS reports a $227M net profit for 3Q vs $39M a year earlier. Mosaic is up 8.4% to $22.60. (jesse.newman@wsj.com; @jessenewman13)

THE MARKETS:

Hog Futures Soar on Packer Squeeze

U.S. livestock futures surged again Tuesday as meatpackers scrambled for supplies to satisfy strong consumer demand and fill recently-expanded slaughtering capacity.

Hog futures gained more than 4% and cattle rose almost 2% to new contract highs as meatpackers accepted lower margins to secure supplies, a move that analysts said dented their financial prospects in what is traditionally the most profitable quarter of the year.

(END) Dow Jones Newswires

October 31, 2017 17:46 ET (21:46 GMT)