adm is not just an ethanol company. one must remember some of adm business is based on getting crop/commodities from where they are plentiful to where they are needed, and that is always going to be the case in good and bad commodity prices.
More acres planted dont necessarily mean more yield produced this year. If the weather would be normal or like last year one might reasonably say the yield will be in ratio to acres planted. I note fertillizer sales are down and weather is not all that good in some areas.
I think the whole crop yield and commodity price picture is as clear as mud until the crop is actually in the bins. One Canadaian Alberta farmer said he is struggling with record drought and even with crop insurance will lose up to $300,000. Said if the weather co-operates from here he might only lose @100,000. had to mortage his farm to continue, and wont be able to buy fertillizer next growing season either.When asked about his commodity prediction he said its a global market and thinks prices remain low, but i think he was being pessimistic.
As for adm its the long term fundamentals.
I think its too complex for any individual to take more than a guess at the crop prices and results etc. While i like to hear about it i have faith in adm and defer to their management. Hey its their job to make commodity price predictions and purchases and sales. Given the global network that adm has it will have the best market intelligence on commodity prices/yields second to none. As i said before adm has global informantion from the farmer to the storage to the demand.
Good news. This is the 2nd largest corn planting on record.
This will drive down feed stock prices for corn related ADM products. Corn fell almost 1.00 in the last week.
This planting however will add support for higher soybean prices.~md
The prior poster's question is more pertinent. Are they being caught in a hedged position. There is strong buying in corn futures today which could indicate that this low price may be short lived. But being hedged in a declining market in never good. We'll know in another few weeks.
All comes down to the good old blackbox syndrome and long term investors in this stock are at risk. Take profits anywhere near 28 and wait for a pullback.