Cargill Replaces Trader, Disputes Details of ReportShruti Date Singh
Cargill Inc. replaced a senior trader while disputing some details in a report that said the the largest closely held U.S. company lost at least $100 million in energy trading in recent weeks.
The losses arose mostly from trading in mid-Atlantic power markets amid large price moves caused by unusually cold weather across the U.S. in January, the Wall Street Journal reported, citing industry publication SparkSpread.com.
“We do not provide financial details on our individual business, only at company level, but we do refute the details of the numbers shared” in the report, Pete Stoddart, a spokesman for Minneapolis-based Cargill, said in an e-mail today.
Mike Newman was appointed physical trading manager for North America at Cargill’s thermal energy supply chain unit, Stoddart said. His predecessor, David Toole, left the company Feb. 19, the Journal said, citing SparkSpread. Stoddart declined to comment on Toole, who couldn’t immediately be reached for comment.
Energy prices soared in January after a polar vortex spread subfreezing arctic air across much of the eastern U.S. Natural gas futures on the New York Mercantile Exchange jumped to their highest in more than three years on Jan. 24 while peak electricity prices were the most in at least a decade.
While Cargill’s focus is largely on agricultural markets, through its trading of grains and processing of meat and food ingredients, it also handles non-food commodities. The company’s thermal-energy unit is a proprietary trader of oil, gas, coal and power, according to its website. The business also serves clients including utilities, buying transportation and storage capacity and managing supply and distribution assets.
Cargill said Jan. 9 its energy activities had “weak” results in the quarter ended Nov. 30, even as overall net income rose 36 percent to $556 million on sales of $32.9 billion. The segment’s performance in the previous quarter was also described as “weak,” because of mild weather and “soft” demand.