Archer-Daniels-Midland (ADM): Navigating Turbulent Waters
Archer-Daniels-Midland (ADM) has been facing significant challenges, including an ongoing federal investigation following an accounting scandal last year. The company reported its weakest fourth-quarter profit in six years and projected a third consecutive annual earnings drop for 2025. To counteract these challenges, ADM has announced a cost-cutting plan that involves slashing up to 700 jobs and aiming for \$750 million in cost reductions over the next three to five years.
ADM’s difficulties are compounded by uncertainty surrounding U.S. biofuels policies and a brewing trade war. CEO Juan Luciano expressed concerns over the impact of President Donald Trump’s tariffs on Canada, Mexico, and China. While the tariffs could benefit ADM in certain scenarios, retaliatory measures from top U.S. farm goods buyers remain a significant concern.
ADM is leveraging its global grain origination and distribution footprint to mitigate risks. For instance, during China’s reduction in U.S. soybean purchases in 2018, ADM tapped its Brazilian supply chain to maintain market access. Additionally, the company is closely monitoring policy developments related to biofuels tax credits, which could enhance oilseed crushing and biodiesel margins.
Recommendation: ADM appears to be in a defensive mode, focusing on cost reductions and strategic adjustments to weather the current turbulence.
Venture Global LNG: Facing Trade War Uncertainty
Venture Global LNG, the most valuable U.S. LNG exporter, is navigating uncertainties stemming from a trade war between the U.S. and China. With two operating plants in Louisiana and three more under development, Venture Global has secured 9.5 million metric tonnes per annum (MTPA) in long-term supply deals with Chinese companies. However, China’s imposition of tariffs on U.S. LNG has injected uncertainty into the company’s operations and market positioning.
In its January initial public offering prospectus, Venture Global warned investors about potential adverse effects from the trade war. The company noted that such factors could impact its ability to market remaining production capacity, thereby affecting project viability and overall business performance. Following this news, Venture Global’s stock declined by nearly 5% during afternoon trading on Tuesday.
Recommendation: Venture Global is advised to diversify its market base to reduce dependency on Chinese buyers and mitigate trade war risks.
Cheniere Energy: Resilience Amid Trade Tensions
Cheniere Energy, the largest U.S. LNG exporter, has over 4.5 MTPA in long-term supply agreements with Chinese companies. Despite the imposition of tariffs, Cheniere’s stock was relatively stable, declining by less than 1% on Tuesday. The company remains focused on advancing its LNG export projects and securing additional long-term contracts to support its growth strategy.
Recommendation: Cheniere Energy is positioned to weather trade tensions but should continue exploring alternative markets to reduce risk exposure.
Metals Market Analysis: Aluminium Leads the Pack
Aluminium is touted as the top-performing base metal for 2025, with analysts forecasting a supply shortfall and a price increase of 6.3% to \$2,573.50 per metric ton. The market deficit is expected to grow further in 2026, driven by China’s smelter capacity cap. In contrast, zinc is projected to see short-term gains, followed by a decline as mine supply recovers. Copper’s price outlook has been downgraded due to macroeconomic concerns, while nickel faces continued oversupply but shows signs of a gradual recovery.
Recommendation: Investors should consider aluminium for its bullish prospects while exercising caution with other base metals due to market uncertainties.
Gold: A Safe Haven Amid Economic Uncertainty
Gold demand reached a record high in 2024, driven by central bank purchases and investor interest as a hedge against global risks. Spot gold prices surged by 27%, marking the largest annual gain since 2010. Central banks, led by the National Bank of Poland, accelerated their buying activity, while investment demand for gold bars rose by 10%.
Recommendation: Gold remains a strong investment option for those seeking a safe haven amid ongoing geopolitical and macroeconomic uncertainties.
China’s Wheat Market: Delays and Redirections
China has delayed or redirected up to 600,000 metric tons of wheat imports due to ample domestic supplies. This has impacted Australian and Canadian wheat exporters, with some shipments being resold in Southeast Asia. China’s state-run COFCO is absorbing the costs associated with these delays and redirections, reflecting the country’s efforts to protect local farmers and stabilize domestic prices.
Recommendation: Wheat exporters should prepare for continued volatility in Chinese demand and explore alternative markets to mitigate risks.
