Archer-Daniels-Midland Company (ADM)

Founded in 1902 and based in Chicago, Archer Daniels Midland purchases, transports, stores, processes, and merchandises agricultural commodities and products worldwide. The Ag Services and Oilseeds division purchases and processes oilseeds, including soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed, and palm into vegetable oils and protein meals. The Carbohydrates Solutions division is involved in the wet and dry milling of corn, and produces alcohol, amino acids, citric and lactic acids, and other specialty food and animal feed ingredients, as well as ethyl alcohol. The Nutrition division sells specialty products such as natural flavor ingredients, flavor systems, natural colors, and animal Nutrition products. The company has approximately 38,000 employees. ADM shares are a component of the S&P 500.

Stocks are higher at midday, as bad news was also good news yet again on Wall Street. The Bureau of Labor Statistics (BLS) released the Employment Situation for September. The U.S. added 29,000 nonfarm jobs, helped by increases in healthcare and construction, while employment in financial activities declined. Private payrolls were up 46,000, while the government category lost 17,000 jobs, with federal down 1,000. Our forecast was for an increase of 115,000 new jobs in September, while the consensus was 90,000. August's payrolls were revised lower by 29,000 to 133,000 and July was reduced by 31,000 to a loss of 10,000 jobs. September's results and the revisions reduced the three-month average to 51,000 from 71,000. The unemployment rate rose to 4.2%, which was higher than our estimate of 4.0% and the consensus of 4.1%. But when all was said and done, the weak jobs data also means that another interest-rate hike from the Fed seems less likely. The probability of a pre-election rate hike at the October 27-28 meeting decreased to 16.1% from 21.6%. There was no expectation that the Fed would reduce the 3.75%-4.0% target range before or after the report. The probability that the funds rate will be 4.0%-4.25% (25 basis points higher) at the end of the year rose to 63.8% from 61.4%, but the probability that rates will be higher by 50 basis points decreased to 11.3% from 19.2%.

On Fridays, we plan to review sector trends, switching from week to week among sectors and sector groups. This week, we examine growth sectors.

Archer-Daniels-Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. The company is also one of the largest grain merchandisers through its extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients and is a large producer of corn-based sweeteners, starches, and ethanol.