Biodiesel Has Strong Potential For ADM

Article Excerpt

ARCHER DANIELS MIDLAND CO. $39 (New York symbol ADM; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Above average) is currently building new plants in the United States and Brazil to meet growing demand for alternative fuels, particularly biodiesel fuel made from soybeans. Right now, only about 3% of vehicles in the United States use diesel fuel. But that figure will probably grow to 10% by 2015, due to the environmental advantages of new diesel engines. Biodiesel contains almost no sulfur, so it already meets tougher new environmental regulations for diesel fuel. ADM got as high as $47 in May, but moved down as rising corn prices and falling gasoline prices cut ethanol demand. New ethanol plants under construction by ADM and other companies could keep prices down once production begins. However, ethanol and other fuels account for less than 10% of ADM’s profit. In the meantime, its core agricultural businesses will benefit from higher corn prices. Archer Daniels Midland is a..