Archer Daniels Midland Co. (ADM) on Friday reported quarterly profit dropped 30 percent, but its shares rallied as the agribusiness company said a near-record U.S. harvest and rising demand for crop-based fuels will boost future earnings.

First-quarter earnings fell because hurricanes on the Gulf Coast (search) made transporting grain difficult and halted exports. As a result, profit from the agricultural services division fell 61 percent, to $20 million.

But ADM's three other business units all had increased profit, including a 32 percent jump in corn processing earnings, its bd for ethanol and biodiesel would help its bottom line going forward.

ADM, the largest U.S. food processor, earned $186.3 million, or 29 cents pershare, in the first quarter ended Sept. 30, compared with $266.3 million, or 41 cents per share, a year earlier.

The quarterly results include an after-tax charge of $19 million, or 3 centsa share, due to the acceleration of share-based compensation expenses.

Analysts on average had forecast a profit of 33 cents per share, according to Reuters Estimates.

Decatur, Illinois-based ADM takes commodities such as corn and soybeans and processes them into byproducts like ethanol, sweeteners and soymeal for animal feed.

ADM also announced it was raising prices for high-fructose corn syrup (search), a sweetener used in soda and food, starting in January.

"I think they made very good progress in the sweetener division," said analyst Todd Duvick of Banc of America Securities. "That's been an Achilles' heel over the last several years."

ADM executives also said that prices for lysine, a livestock feed additive, have bottomed out and should start to improve.

Oilseeds processing operating profit rose about 9 percent to $99.1 million from improved results in Europe, South America and Asia. Corn processing, ADM's largest division, saw profit jump 32 percent to $136.3 million because of lower prices for corn due to a near-record U.S. harvest.

Other segments, such as feed ingredients and financial, posted a 2 percent increase to $95.1 million.

Revenue fell 4 percent to $8.63 billion from $8.97 billion. The average forecast from analysts polled by Reuters Estimates was $9.12 billion.

An inventory valuation adjustment resulted in a $9 million benefit this quarter, compared with a $116 million benefit a year earlier.

As of Thursday's close, ADM shares had risen 4.2 percent this year against an 8.1-percent drop in the Dow Jones U.S. Food Product Makers Index (search) . ADM trades at 16 times forecast fiscal 2006 profits, compared with 17 times future earnings for other food product makers.