Sector Snap: Agriculture Cos.

Driscoll had downgraded Archer Daniels Midland to "Sell" in April after meeting with managment, saying his belief that "fundamental trends are deteriorating across ADM's major businesses" was confirmed.

Now, thanks to a "dramatic improvement" in profit margins of soy products, "what looked like a dismal outlook now appears more reasonable" for both Archer Daniels Midland and Bunge, he said.

Still, Driscoll said, Bunge will need to post record second-half earnings to meet its 2009 guidance.

But Argentina's woes will help the agribusiness giants. The Latin American country's severe drought means its soy crop will likely be down 26 percent, Driscoll said.

Meanwhile, the USDA says US crop supplies are tight as well, which is driving corn and soy prices higher.

Corn prices are up 16 percent, wheat up 9 percent and soy prices up 30 percent since March, he said.

Tightness in global crop supply is good for Bunge and Archer Daniels Midland, Driscoll said, as it could also create opportunities for their grain trading divisions.