Sector Snap: Agriculture Cos.

NEW YORK (AP) — The worst drought in Argentina in 40 years means that a big chunk of the world's demand for corn, wheat and soybeans will move to U.S. suppliers, an analyst said, at the same time grain prices are rising.

"The worst-case scenario in the agricultural processor universe appears to be abating," Citi Investment Research analyst David Driscoll said in a note to investors Friday.

He upgraded agribusiness company Archer Daniels Midland Co. to "Hold" from "Sell" and raised his price target on agriculture processor and fertilizer maker Bunge Ltd. to $65 from $55.

Bunge shares gained $2.94, or 5 percent, to $62.29, while Archer Daniels Midland jumped $1.69, or 6.6 percent, or to $27.54.

Earlier this month, Archer Daniels Midland said stabilizing crop prices caused its sales to sink by 21 percent and profit by 98 percent in its fiscal third quarter.

Analysts then had questioned the company's ability to post high profits such as those last year when a crush in the global food supply helped drive food prices higher.