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Shares of Archer Daniels Midland ended the day barely changed, but only after a wild ride that saw the stock tank in premarket trading after the soybean-processing giant cut its outlook due to pressure on profit margin.
A lack of further detail around a U.S.-China trade agreement and a delay in the release of the Trump administration’s biofuel policy were all factors, according to news reports.
“Farmers are kind of selling reluctantly, and buyers are kind of hand-to-mouth,” ADM Chief Executive Juan Luciano told analysts on an earnings call Tuesday morning, according to the Wall Street Journal.
Luciano said ADM wasn’t alone in eagerly awaiting more details on the China deal after Trump administration officials said Beijing agreed to buy 12 million metric tons of U.S. soybeans over the next two months and 25 million metric tons in the following three years.
“We really need clarity on this trade deal. But although on the surface it is positive for ADM and for grain in general, we haven’t yet seen a joint document, highlighting the details of this,” Luciano said, according to the report.
Meanwhile, a delay in biofuel policy decisions, including renewable fuel-blending standards under the U.S. Renewable Fuel Standard, have slowed the use of feedstocks such as soybean oil produced at ADM processing plants, Reuters reported.
Notable closes
“Turnaround Tuesday” was in effect for the soy complex. January soybeans fell 12 3/4 cents to $11.21 1/2, December soybean meal fell $3.40 to $317.40, and December soybean oil fell 31 points to 49.53 cents. Both soybeans and meal were significantly overbought from a technical perspective after a strong bull run. It may take a close back below $11 a bushel for bears to at least begin to feel confident that a near-term high may be in place.