38.24 +0.21 (0.55%)
Pre-Market: 8:00AM EDT
|Bid||0.00 x 800|
|Ask||38.24 x 800|
|Day's Range||37.76 - 38.37|
|52 Week Range||36.45 - 52.07|
|Beta (3Y Monthly)||1.00|
|PE Ratio (TTM)||16.38|
|Forward Dividend & Yield||1.40 (3.68%)|
|1y Target Est||N/A|
U.S. high-dividend stocks are trading at their biggest discount in four decades as investors flock to bonds, pushing down their yields.
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is...
Europe stocks traded sharpy lower on Wednesday after data showing the Continent’s largest economy contracted and eurozone industrial production declined.
(Bloomberg) -- Corn plunged by the exchange limit after the U.S. Department of Agriculture said American farmers planted more than analysts estimated.Futures capped their worst day in six years as the USDA pegged planted acres at 90 million, 2.6% higher than the average analyst estimate. The agency also said U.S. yields and production will be bigger than forecast.The report was quick to be met with some skepticism from traders, who had expected the agency to better reflect in this report the impact of a deluge that hit the U.S. Midwest and delayed sowings by the most on record.The USDA had already been criticized for its June planting estimates and, as a result, took the unusual step of re-surveying farmers to get a more accurate number. Back then, corn prices tumbled, costing farmers about $2.6 billion, according to estimates from the American Farm Bureau. It was another blow to the rural economy, which is already grappling with the U.S.-China trade war.“Corn drops the limit with the USDA once again not cutting onto their estimates despite widespread expectations to do so,” futures and options brokerage INTL FCStone said in a note to clients. “Foul cries will continue.”The U.S. faced one of the wettest planting seasons ever, delaying corn plantings and leaving normally uniform fields totally uneven, at least in the state of Illinois. Soybeans aren’t much better. Flowering is behind schedule and now that the weather has turned dry, plants are struggling to develop.The USDA forecast corn yields at 169.5 bushels an acre, 2.8% higher than analysts expected.“It is hard to understand the USDA yield estimates,” said Jack Scoville, a broker at Price Group in Chicago. “We were out in central Illinois over the weekend and the crop was silked and making ears, but only a couple of areas were far enough along to get a good count. The early area yields were good, the rest was blister or less and hard to count in any reliable way.”Corn Plunge Spurs Chicken-Producer Rally as Tractor Stocks DropStill, corn plants are proving to be resilient thanks to advances in seed technology and precision farming, a trait pointed out earlier this month by Ray Young, chief financial officer of Archer-Daniels-Midland Co., one of the world’s largest agricultural commodities traders.“With the seed technologies of genetics, it’s amazing what yield can be,” Young said in an earnings call Aug. 1.Corn futures for December delivery fell by the limit of 25 cents to $3.9275 a bushel Monday on the Chicago Board of Trade. That left the price down 6%, a record for the contract and the steepest decline for most-active futures since April 2013.Rich Nelson, chief strategist at Allendale Inc., said he expects futures to drop to $3.30 by the time the December contract expires, based on current market conditions.Doubts over the numbers linger, especially amid a separate report from the agency that detailed the number of fields that were left unsown. So-called prevent plant acres totaled a record 11.2 million acres for corn, while unplanted soy acres also reached an all-time high at 4.35 million.On Twitter, Lance Honig, branch chief for crops at USDA’s National Agricultural Statistics Service, said the prevent plant numbers were “not directly factored in to our estimates” that were reflected in the WASDE report. Soybean futures also fell, but held up better than corn after the soy acreage number came in lower than expected. The extremely bearish corn market pulled soy down with it, said Terry Reilly, senior commodity analyst at Futures International LLC.“What I like out there is to see some soybean-corn spreading to kick in over the next day or two,” he said by phone. “We’ll continue to see weakness through the remainder of the balance of this week in the corn market.”\--With assistance from Millie Munshi, Tatiana Freitas, Michael Hirtzer and Lydia Mulvany.To contact the reporters on this story: Isis Almeida in Chicago at email@example.com;Michael Hirtzer in Chicago at firstname.lastname@example.org;Lydia Mulvany in Chicago at email@example.comTo contact the editors responsible for this story: James Attwood at firstname.lastname@example.org, Millie Munshi, Pratish NarayananFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The market has been on a wild ride this week, and today won't be much different. But the fact is, there are a number of things going on around the globe that are signaling that a slowdown is underway, trade wars or not.The United Kingdom just announced that its economy has contracted. Germany's manufacturing is weakening. Many European Union nations are back to negative interest rates to spur investment. The United States is still doing all right, but the trade war is starting to have its costs. And if President Donald Trump's administration adds another $300 billion Chinese goods to the war, not even the easiest Federal Reserve policy may help.Adding to this, the U.S. dollar remains the strongest currency out there. And that's not good for multinational corporations or companies that rely on the strength or weakness of the dollar for their products.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Below are seven large-cap stocks to get out of your life now, before this all ends up in their next earnings reports. They're all F-rated in my Portfolio Grader. Large-Cap Stocks to Sell: Occidental Petroleum (OXY)Source: Shutterstock Occidental Petroleum (NYSE:OXY) is an integrated energy producer with exploration and production operations in the U.S., Colombia and the Middle East. It recently completed its $55 billion acquisition of Anadarko Petroleum. This deal left Occidental in debt when the company was forced to complete the payment in cash instead of stock. Now OXY has to divest all redundant business to get to the U.S. shale fields Anadarko owned.Add to this a slowing global economy, rising oil inventories and trouble in Venezuela -- Colombia's neighbor -- and you have a lot of headaches ahead.There's a reason OXY stock is off 23% this year and 40% in the past 12 months. FedEx (FDX)Source: Shutterstock FedEx (NYSE:FDX) is the well-known global shipping and logistics business. And it's having a rough go of it because of its far-flung empire.The U.S.-China trade war doesn't help and the strong dollar is a potential double whammy to its business since all revenue derived abroad is worth less when converted back to dollar terms. This is one of the big consequences facing U.S. companies doing business in China, especially now that China has lowered its yuan against the dollar.China's move has also lowered the Singapore dollar as well, since it trades in a close ratio to the yuan. In Europe, Brexit is hurting the British pound and most of the mainland is struggling with negative interest rates as their economies slow. * 10 Cyclical Stocks to Buy (or Sell) Now Add to that FedEx's recent announcement that it's ending its relationship with Amazon (NASDAQ:AMZN) and there's going to be some adjustment in expectations moving forward. Year-to-date, the stock is up less than 2%, and it's down 32% over the past year. Kraft Heinz (KHC)Kraft Heinz (NASDAQ:KHC) became the fifth-largest food company following its 2015 merger. But things haven't gone as expected.Over the past three years, the stock has been on a downward trajectory that at this point seems unstoppable. Kraft and Heinz used to be two bedrock consumer staples companies that owned some of the most iconic brands on supermarket shelves. But times have changed.Younger generations aren't as beholden to those brands and tastes and demographics have changed. As a new wave of non-European immigrants start to show their buying power, ketchup and mac and cheese are not the foundation of comfort foods they once were.While KHC stock still delivers an impressive nearly 5.7% dividend, it doesn't make up for a stock that dropped 34% year-to-date, and 53% in the past year -- as well as 68% in the past three years. Archer-Daniels-Midland (ADM)Source: Shutterstock Archer-Daniels-Midland (NYSE:ADM) is one of the largest publicly traded agricultural companies in the U.S. But this year hasn't been kind to farmers, and thus, to ADM.The latest escalation of the trade war saw China retaliate by swearing off all American agricultural products. Bear in mind, it took many years to establish the previous U.S.-China trade relationship.Now, China has leased land from Russia's far eastern region and is growing its own soybeans there. That isn't just a short-term fix, that's business that U.S. farmers may have lost forever.Add to that the flooding in the spring that made corn planting difficult -- if not impossible -- for Corn Belt farmers. But prices are still low and aren't helping farmers stabilize. The taxpayer-funded aid isn't a long-term solution and hardly covers the expenses many need to keep going. * 5 Cheap Stocks to Buy Now That the Fed Cut Rates ADM stock feels all of this. The stock is off 6% year-to-date and 23% in the past year. ArcelorMittal (MT)Source: Shutterstock ArcelorMittal (NYSE:MT) is the world's largest steel producer. That's usually a good thing, since it can balance between mining operations for iron ore and steel production. But when there's not a lot of growth going on, industrial commodities is the first sector that gets hit.Recently, the prices of iron ore and coking coal -- the two main inputs in steelmaking -- have risen, making steel even more expensive to produce. Add to that waning demand and it's hard to make a buck.MT stock's second-quarter earnings tell the story. The company lost nearly $500 million in Q2 after writing down almost $1 billion in impairments. With growth projections falling around the world and the dollar strong, it's not a good place to be right now.Off 30% year-to-date and 52% in the past year, MT stock is not a good choice now or in the near future. AbbVie (ABBV)Source: Shutterstock AbbVie (NYSE:ABBV) owns the world's most profitable prescription drug, Humira. Now, Humira became off-patent in 2016, but you wouldn't know that from the sales. Advertising for the drug also continues unabated. Why? Because ABBV went to court in both the U.S. and E.U. to fight to keep biosimilars, drugs that are nearly identical, out of the market for another seven years.And while the case made its way through courts over a couple years, E.U. courts allowed biosimilars to remain on the market through late 2018. The U.S. courts gave Humira its dominance (and pricing power) until 2023.While AbbVie has a stable of solid drugs out there, it's hard not to see Humira as its chief breadwinner. And that status is waning. Add to this threats from U.S. consumers and politicians to transition to a more consumer-focused healthcare system where prescription drug cost prices will be better negotiated. * 10 Stocks to Buy on the Trade War Dip This is all part of the reason why AbbVie recently offered to buy out Allergan (NYSE:AGN) for a whopping $63 billion. However, that deal has yet to get approved, and it will take a while to assimilate the acquisition if it does.All of these are real risks. Ryanair (RYAAY)Source: Shutterstock Ryanair (NASDAQ:RYAAY) is the world-renowned, low-fare airline of Europe. While plenty of people have tried before to capture that market, RYAAY has had the most enduring success.But, the airline has come up against an immovable force that may not spell doom for the company, but certainly has chilled investors' enthusiasm. The airline has had to suspend about 30,000 flights because it was a big customer for Boeing's (NYSE:BA) 737 MAX 8 planes. When that model was taken out of the sky, it impacted many airlines. But RYAAY got hit significantly, since its entire business is ferrying people around Europe for bargain prices.It can't expand service now and the savings new jets would bring in efficiencies are no longer there. Those 30,000 flights represent five million passengers. Ryanair also has to cut back operations at airports and close some of its hubs.This is a significant disruption to an airline that was already running a business on thin margins and high volume. And there's still no sign when the airplanes will be cleared for take off.Off 13% year-to-date and 38% in the past 12 months, this stock is going to have trouble achieving cruising altitude for some time.Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system -- with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the "Master Key" to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Aristocrat Stocks to Buy Now No Matter What * 7 Stocks to Buy to Ride the Vegan Wave * 4 Safe Stocks to Buy Amid Trade War Turbulence The post 7 Large-Cap Stocks to Sell Right Now appeared first on InvestorPlace.
President & CEO of Archer-daniels Midland Co (30-Year Financial, Insider Trades) Juan R Luciano (insider trades) bought 5,457 shares of ADM on 08/06/2019 at an average price of $36.65 a share. Continue reading...
(Bloomberg) -- The global bond market is sounding the alarm that things won’t be able to carry on much longer before a recession strikes.Germany’s yield curve is now at its flattest since the financial crisis -- and yields across the world are slumping to fresh lows -- in a cacophony of signs that investors are growing increasingly pessimistic about the outlook for the world economy. Central banks from New Zealand to India have responded by surprising markets with their efforts to boost stimulus.“This is all setting up for something very disruptive,” said Marc Ostwald, a global strategist at ADM Investor Services. “What exactly is difficult to enumerate, but the flattening will continue as long as people believe that bunds are a safe haven.”In recent weeks, investors have faced off against a barrage of record-low yields as they have flocked to the remaining corners of the market where they can still eek out a positive return. Germany’s entire curve is already fully below 0%, while even the 10-year bonds of some of the riskiest nations in the euro area -- such as Spain and Portugal -- are getting precariously close to negative territory.Investors are therefore seeking refuge in longer-dated bonds, betting that the European Central Bank will need to embark on quantitative easing again to counter a weakening economy. Shorter-dated bonds -- those more sensitive to interest-rate cuts -- have moved less, given the deposit rate is already deeply negative at -0.40%.Trade TensionsGlobally too, the repercussions of the U.S.-China trade war are being felt. Ten-year Treasury yields are at the lowest level since 2016, with the premium over two-year bonds next to nothing -- a sign that an economic recession may be just months away.“Rates markets globally are expecting what looks like Armageddon,” said Tom di Galoma, managing director of government trading and strategy at Seaport Global Holdings LLC. “In our view, a recession is an 80% probability,” referring to the possibility of a U.S. contraction.U.S. President Donald Trump waded into the debate, tweeting that the U.S. yield curve was “at too wide a margin” and that the Fed needed to understand that the country was competing against others.Indeed, fears have grown this week that the dispute between U.S. and China over trade is spilling into a global currency war after the People’s Bank of China move to weaken the yuan to levels unseen since 2008. There are signs that the Swiss National Bank may be intervening to weaken the franc, while India, New Zealand and Thailand all cut interest rates.The Federal Reserve may have to embark on an easing package of its own, according to Nomura Asset Management money manager Richard Hodges.“The Fed will cut rates aggressively over next 12 months,” Hodges said. “I see little good news or evidence the US economy will improve and more suggesting it will fall further. How anyone can give an optimistic view on global economies is beyond me.”Not DoneGerman 30-year bond yields dropped as much as 11 basis points to -0.15%, narrowing the spread over those on two-year bonds to 71 basis points, the lowest level since 2008. The difference between two- and 10-year Treasuries is just eight basis points.The flattening is unlikely to be finished just yet given the ECB may have to come up with alternative easing measures to counter stalling inflation, such as yield-curve control, according to Danske Bank AS. That refers to a practice by the Bank of Japan, which limits the range yields can move.“This is all supportive for flatteners,” said Jens Peter Sorensen, chief analyst at Danske. The trend will continue “unless they start some significant fiscal expansion in Germany, but what is the chance of that?”(Adds Trump tweet in eighth paragraph.)\--With assistance from James Hirai and Liz Capo McCormick.To contact the reporter on this story: John Ainger in London at email@example.comTo contact the editor responsible for this story: Ven Ram at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Once upon a time, some of America's greatest companies were based in what looked like the middle of nowhere.Source: Shutterstock Along I-74 in western Illinois, the squat home office of Caterpillar (NYSE:CAT) dominated the Peoria skyline. Off I-72, to the southeast, Archer Daniels Midland (NYSE:ADM) ruled the small town of Decatur.Both HQs have since decamped to Chicago, but there's big trouble back home. The trade war is unhealthy for the farm economy. Vendors like CAT and ADM aren't getting bailouts like the ones offered to their farmer clients.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThus, these stocks are now among the worst performers, or the biggest bargains, Wall Street has to offer. Caterpillar is down almost 13% over the last year. ADM is down almost 25%.Is it time to give these old farm dogs another look? Caterpillar Grows DividendOn the surface Caterpillar looks like a screaming bargain.With a market cap of $69.5 billion, on sales of $54 billion, Caterpillar sports a price-earnings multiple of just 11x with a newly raised dividend of $1.03 per share yielding 3.25%. * 7 A-Rated Stocks Under $10 Caterpillar makes more than farm equipment. Its equipment is also heavily used in construction. China is one of its biggest markets, and the stock took another leg down July 24 after it reported a profit of $1.6 billion, $2.83 per share fully diluted, on revenue of $14.4 billion. Caterpillar is a slow-growth company. Investors buy it for the dividend. During the second quarter the company earned that dividend nearly three times over. There was also $7.4 billion in cash on the books at the end of June. The dividend costs just $600 million per quarter.Caterpillar has been paying dividends continuously since 1981. The dividend has been boosted regularly and was just 70 cents per share five years ago. Before its latest hike last month, the dividend rate was 86 cents.But ask analysts about Caterpillar and they say sell. The chart pattern looks bearish in the short term, bearish in the medium term, bearish in the long run. Caterpillar is America's most successful maker of gas-powered engines. Even their mobile electric generators run on diesel. Can that really be a buy in the 2020s? ADM No Longer AmusesArcher Daniels Midland, meanwhile, looks like a disaster area.ADM bet that the trade war would end quickly. It has lost that bet. On June 30 the company announced earnings of $325 million, 42 cents per share fully adjusted, on revenue of $16.3 billion. The earnings were barely enough to pay the 35-cents a share dividend, with its 3.4% yield.Analysts were not amused. The earnings were down 41% from a year earlier. Bad spring weather was added to the China woes. Shares dropped by $2 each, and are since down another $2, the shares due to open below $38. * 10 Generation Z Stocks to Buy Long The trade war and competition with other fuels is killing ADM's ethanol business. The company believes the China soybean market may be "closed for good" and it must find other markets for U.S. grain. Bottom Line on Ag-Related Dividend StocksFor income investors, market downturns can be a picnic. Prices go down and yields go up.But you must watch out for the ants, the bugs in the business model that put the dividend at risk.For Caterpillar, the bug is the complete lack of an electrification strategy. That may not look like trouble now, but such machines are coming. Fortunately, management has time and cash to deal with this, if it chooses to do so.ADM's problems are more basic, its margin of safety smaller. There's real trouble in the grain belt, where ADM creates markets. ADM helped create both the ethanol market and the corn syrup market. Can it turn America's grain surplus into meat?For now, ADM has the fatter yield, but CAT is the better bet.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cyclical Stocks to Buy (or Sell) Now * 7 Biotech ETFs That Should Remain Healthy * 7 of the Hottest AI Stocks to Buy Now The post Caterpillar Stock Gives Income Investors a Feast on Agricultureas Problems appeared first on InvestorPlace.
(Bloomberg) -- Archer-Daniels-Midland Co. shares fell to a three-year low as the deepening U.S.-China trade dispute eroded prospects for a second-half rebound in the agriculture giant’s results.The stock sank as much as 3.5% to $36.46, the lowest since mid-April 2016. The Trump administration has designated China as a currency manipulator as the yearlong trade dispute showed signs of sinking into a quagmire with no end in sight. ADM had expected U.S. trade would be back to normal by the middle of this year. The shares pared losses as two top executives made purchases.Last week, Chief Executive Officer Juan Luciano tempered his optimism on an immediate trade resolution. He refrained from speculating on when the tit-for-tat tariff dispute between Washington and Beijing would be resolved, while continuing to be upbeat about the months ahead. China, the biggest soybean importer, is signaling a greater focus on supplies from countries including Brazil and Argentina.“South America is a bit of a weaker spot for ADM” relative to its North American assets, Chris Shaw, an analyst at Monness Crespi Hardt & Co. in New York, said by telephone. It “looks like the U.S. is losing that export market for good” to South America, he said.ADM, based in Chicago, declined to comment. Since releasing results on Aug. 1, the stock has dropped 9.1%, the second-biggest decline most among 26 companies in the Bloomberg World Agriculture Index. The broad gauge is down 3.7%.The stock pared losses after regulatory filings showed CEO Luciano purchased 5,457 shares for $199,990, and Chief Financial Officer Ray Young bought 3,400 shares for $124,899. ADM fell 1% to close at $37.42 in New York.Cofco International Ltd., the trading arm of China’s top food company, plans to increase soybean purchases from Brazil by 5% a year over the next five years. Spending on logistics and new silos will increase subject to the “continued existence of a stable and predictable investment environment,” Chairman Johnny Chi said Monday at an industry event in Sao Paulo.A breakthrough in the U.S.-China dispute may fail to bolster ADM, “given the broadening relationship between China and South America.” Shaw of Monness Crespi Hardt said.China Turns Back to Brazilian Beans After Trade War EscalationBunge Earnings Estimates Raised, ADM’s Lowered by JPMorgan(Updates with CEO share purchase in sixth paragraph.)To contact the reporter on this story: Mario Parker in Chicago at firstname.lastname@example.orgTo contact the editors responsible for this story: James Attwood at email@example.com, Patrick McKiernanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
CFO of Archer-daniels Midland Co (30-Year Financial, Insider Trades) Ray G Young (insider trades) bought 3,400 shares of ADM on 08/06/2019 at an average price of $36.74 a share. Continue reading...
Brazil's Marfrig Global Foods SA, the world's largest hamburger producer, said on Tuesday it has reached an agreement with U.S.-based agribusiness company Archer Daniels Midland Co to produce and market vegetable protein products in Brazil. ADM, which trades and processes grains and oilseeds, will supply raw materials, and Marfrig said it will produce, distribute and sell the plant-based meat to restaurants and retailers. "Together, Marfrig and ADM will produce a 100% vegetable burger with a meat-like flavor and texture.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. As China turns its back on American ethanol in a lingering trade spat, Brazil is considering opening its doors to U.S. biofuel.Brazilian authorities are debating whether to yield to Washington’s request to lift ethanol-import duties as a way of facilitating talks for a bilateral trade deal with the U.S., two people with direct knowledge of the matter said. A broad trade accord would benefit many Brazilian products and may be announced by October.Officials in Brazil’s Economy Ministry are willing to remove ethanol barriers while those from the more protectionist Agriculture Ministry are pushing to renew the current import quotas with zero tariffs, the people said, asking not to be identified because talks are private.Brazil Agriculture minister Tereza Cristina confirmed that a discussion is going on within the government. There’s no decision yet, she said, and there may not be one until the end of the month, when the quota ends.”Any market opening may be done gradually in order to not hurt Brazil’s sector,” she told journalists Monday in event in Sao Paulo.Two years ago, Brazil slapped a 20% tariff on U.S. ethanol shipments that exceed an annual quota of 600 million liters (158 million gallons) after American corn-ethanol imports surged, flooding the Brazilian market and pushing down prices.A biofuel deal between the two nations would come as a relief for the U.S. ethanol industry, which has been beset by a supply glut and the weakest margins in more than 15 years. American producers had expanded rapidly to cater to fast-growing Chinese demand, only to be left without buyers amid President Donald Trump’s trade war with Beijing.A decision would have to be made by the end of this month, when the quota expires and a 20% duty on all imports would go back into effect, the people said. Brazil’s sugar-cane industry group Unica and the Economy and Agriculture ministries didn’t immediately respond to requests for comment.The administration of President Jair Bolsonaro would at least exclude some American ethanol shipments from the 20% tax in order to preserve relations given Brazil is striving to address other U.S. trade complaints, according to the people. In March, Brazil agreed to open a wheat import quota of 750,000 tons a year free of duty, a move U.S. Wheat Associates says could benefit American farmers.In a worst-case scenario, the Economy Ministry would extend the 600 million-liter quota to gain more time to negotiate, the people said.Brazil was the top destination for U.S. corn-ethanol shipments last year, with imports of more than 1.7 billion liters.(Updates with chart)\--With assistance from Isis Almeida and Dominic Carey.To contact the reporters on this story: Rachel Gamarski in in Brasilia at firstname.lastname@example.org;Fabiana Batista in Sao Paulo at email@example.comTo contact the editors responsible for this story: James Attwood at firstname.lastname@example.org, Reg GaleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. China is stepping away from further U.S. farm imports and said it doesn’t rule out more tariffs after President Donald Trump ratcheted up tensions with its biggest agricultural trading partner last week.The Chinese government has asked its state-owned enterprises to suspend purchases of U.S. agricultural products, people familiar with the situation said. Also, privately run Chinese crushers that had received retaliatory-tariff waivers on American soybeans from Beijing have stopped buying the commodity due to uncertainty over trade relations, other people said.Chinese buyers have turned to South American soybeans and the Asian nation said it doesn’t rule out for now taxing American agricultural goods that were traded after Aug. 3, the Commerce Ministry said in a statement on its website. The ministry also confirmed relevant Chinese firms have stopped purchasing American agricultural goods.President Trump on Thursday proposed adding 10% tariffs on another $300 billion in imports from Sept. 1, marking an abrupt escalation of the trade war between the world’s largest economies shortly after the two sides restarted talks. Bureaucrats in Beijing were stunned by Trump’s announcement, according to Chinese officials who’ve been involved in the trade talks, and Beijing has pledged to respond if the U.S. insists on adding the extra tariffs.China’s state-run agricultural firms have now stopped buying American farm goods, and are waiting to see how talks progress, the people said, declining to be identified as they’re not authorized to speak to the media. Meanwhile, the private crushers haven’t received notices from the government on any policy change since the U.S. escalated tensions last Thursday, people said.“The leverage that China has is its large agricultural purchases,” Darin Friedrichs, a senior analyst at INTL FCStone’s Asia commodities division, said in an interview on Bloomberg TV. “This does affect U.S. farmers and the rural U.S. voting base that’s normally in support of Donald Trump. If they hit back before the election, that’s the obvious way to retaliate.”Chinese buyers are seeking to buy Brazilian and Argentine soybeans after trade talks soured, people familiar with the matter said Monday. They were seeking Brazilian cargoes mostly for September and Argentine for August and September, the people said. Inquiries by the world’s top soybean buyer Friday sent the premium for soy at Brazilian ports surging.Trump has repeatedly complained that China hasn’t made the “large quantities” of agricultural purchases that he claims President Xi Jinping promised when they met in Osaka at the G-20 summit.Those accusations are “untrue” as Chinese companies have bought U.S. farm products, including soybeans, Cong Liang, Secretary General of the National Development and Reform Commission, said in an interview with state media CCTV. Some deals haven’t been completed because the prices are not competitive, he said.‘Very Nervous’Soybeans for November delivery slumped as much as 1.6% on Monday before recovering to be little changed at 1:20 p.m. in Chicago. Corn tracked a similar path. Hog futures, which plunged 6.4% earlier today, were up 2.6%. Earlier, soybean-meal prices in China and rapeseed meal futures advanced on expectations for tighter supplies. Shares in crop trader Bunge Ltd. fell 3.1% while rival Archer-Daniels-Midland Co., which has been more positive on a resolution to the trade war, slumped 6.2%.China had already drastically cut back on U.S. purchases, with soybean imports sinking to the lowest in a decade during the first half. In a show of goodwill, the Asian nation had recently given the go-ahead for five private companies to buy as much as 3 million tons of U.S. soybeans without paying retaliatory tariffs. Meanwhile, state-owned firms earlier pledged to buy about 14 million tons in the current marketing year, of which 4 million tons have not yet been shipped.The companies that had received the waivers were state-owned Jiusan Group, as well as privately run Shandong Bohi Industry Co. and China Sea (Zhonghai) Grain and Oil Industry Co., Bloomberg reported last month. Yihai Kerry Group, a Chinese subsidiary of Singapore-based Wilmar International Ltd., and Hopefull Grain & Oil Group are also among the firms.“I would be very nervous if I was a Chinese company trying to buy produce right now,” Friedrichs said. “We’ll see a lot of private importers backing away from U.S. products as well.”(Updates with Chinese statement in third paragraph.)To contact Bloomberg News staff for this story: Steven Yang in Beijing at email@example.com;Isis Almeida in Chicago at firstname.lastname@example.org;Niu Shuping in Beijing at email@example.com;Alfred Cang in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Anna Kitanaka at email@example.com, James PooleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The dizzying rise of the plant-based meat trend continued Thursday, with ingredients giant Archer Daniels Co. the latest big food player to jump on the bandwagon.
Sacramento-based Pacific Ethanol Inc. reported its 10th straight quarter of losses, but its CEO said the company has no plans to declare bankruptcy.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.One of the world’s biggest ethanol producers painted a grim picture for American-made biofuel, along with its own prospects, if Donald Trump’s trade war with China lingers much longer.Archer-Daniels-Midland Co. said Thursday that the main risk to its goal of matching earnings levels of last year is a continuation of the trade spat between the world’s two largest economies. Like U.S.-grown soybeans, ethanol -- made primarily from corn and a revenue generator for farmers -- faces steep tariffs in China.“If we don’t see a resumption of significant agricultural trade with China, particularly ethanol, well before the end of the third quarter, it would be difficult to achieve adjusted earnings per share in 2019 similar to 2018,” Chief Financial Officer Ray Young said on a call with analysts.America’s ethanol industry is beset by a supply glut and negative returns. On Wednesday, Pacific Ethanol Inc. reported its 10th straight quarter of losses. Last week, Plymouth Energy LLC said it shut a plant in Merrill, Iowa. ADM warned of more plant closures without a trade resolution.“If this thing persists, I could see more capacity coming offline,” Young said. “I mean, this industry is not sustainable long-term with negative EBITDA margins.”Chief Executive Officer Juan Luciano said on the same call that the ADM continues to “work on the operational and legal separation” of its ethanol plants into a standalone business that positions it for a sale or joint venture.The agribusiness industry is navigating an operating environment pockmarked with everything from the trade war to African swine fever in China to inclement weather in the U.S. Midwest that washed out fields and delayed planting. That’s led to higher corn costs for ethanol plants.In recent years, the biofuel industry expanded with an eye toward meeting burgeoning demand from China. The country has a goal to use more ethanol by 2020 in order to reduce smog. China’s ethanol program may mean it needs to import 2 billion to 3 billion gallons of the fuel, annuallyFor that reason, Luciano said it’s “a no-brainer” and a “win-win” for ethanol sales to be included in a trade deal.Earlier this year, Luciano expressed optimism for a strong second half, citing expectations of a mid-year trade resolution. He tempered that outlook on Thursday, declining to estimate a time-line for a deal, although he did say he was confident one would be reached.To contact the reporters on this story: Mario Parker in Chicago at firstname.lastname@example.org;Isis Almeida in Chicago at email@example.comTo contact the editors responsible for this story: James Attwood at firstname.lastname@example.org, Millie MunshiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Archer Daniels (ADM) posts dismal results in second-quarter 2019 owing to the adverse impact of unfavorable weather conditions in North America and weak ethanol industry.
ADM (ADM) delivered earnings and revenue surprises of -1.64% and 4.28%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?