The stranglehold of US soybeans over the global export market, after drought hit rival South American producers last year, has provided a late fillip to Archer Daniels Midland, helping a jump in quarterly earnings.

However, the improvement proved insufficient to prevent shares in the US agribusiness giant, one of the world's largest corn and soybean processors and ethanol producers, slipping to their lowest since July.

Archer Daniels reported earnings of $421m for the January-to-March period, recovering from a $3m result a year before.

The improvement was spurred by the first quarterly profits growth in more than a year at Archer Daniels' agricultural services division, which enjoyed growing trade as supplies from South American competitors dried up.

"Merchandising and handling profit improved as global soybean demand was met primarily with US supplies, due to last year's short South American crop, giving ADM good asset utilisation and margins," the group said.

America has made a sucession of upward revisions to expectations for 2009-10 soybean exports, thanks to more resilient demand than had been expected. 

The division's operating profits rose by 36% to $165m.

Ethanol boost

Archer Daniels' oilseeds processing division, the group's largest, also benefitted, being able to operate at higher levels than rivals which were relying on South American supplies.

"ADM's North American operations were able to run at higher utilisation rates and realise improved margins and volumes," the company said.

The division's operating profits near-doubled to $405m, with corn processing also putting an improved performance as better results in ethanol manufacture more than offset a dent from weaker prices of corn-based sweeteners and starches.

Ethanol margins were helped by "good demand driven by favorable gasoline blending economics", the group said.

Patricia Woertz, the group's chairman and chief executive, said: "The ADM team did a good job managing our large, flexible origination and processing network to meet global demands."

Earnings miss

Group revenues rose by 2.0% to $15.1bn, with higher margins helping earnings jump to $421m from $3m a year before.

However, the earnings, equivalent to $0.65 a share, fell short of Wall Street hopes of $0.72 a share, with analysts also disappointed by the lack of a clear outlook statement, and by doubts over hte future of ethanol profits

"Falling ethanol and corn syrup prices cloud the picture for ADM for the rest of the calendar year," Credit Suisse analyst Robert Moskow said.

"Big mark-to-market losses in the corn syrup and wheat-milling business caused the miss versus our estimates."

Archer Daniels shares closed down 5.4% at $26.22.