January 16, 2009
Bunge and ADM hit by souring soy prices
Bunge stocks fell sharply on Wednesday (Jan 14) amid concern about oversupply in the global soy sector following a profit warning from the company. ADM shares were also in a sell-off.
Bunge saw its shares close down 14 percent at US$41.61, after its warning late Tuesday (Jan 13).
Archer Daniels Midland Co. (ADM), which is less exposed to the soy market, lost 13 percent to US$24.25.
Agribusiness stocks had already fallen sharply from the record highs last summer as commodity prices cooled.
Analysts had warned for some weeks that utilisation rates in oilseed processing have been falling as global demand growth cooled.
Bunge said lower global demand for soy products, credit constraints in Brazil and limited fertiliser sales were contributing to its pessimistic forecast.
Analysts described the ADM sell-off as an overreaction to the Bunge warning, because the company is less exposed to the Brazilian and fertiliser markets.
