Dow Jones — Archer Daniels Midland Co.’s fiscal second-quarter earnings rose 29 percent as the grain-processing giant saw improved demand and pricing for agricultural commodities. 

The results beat analysts’ expectations, sending shares up 4.1 percent to $34 in premarket trading.

The agribusiness sector has been benefiting from a rebound in commodities prices owing to tight global supplies.  ADM’s strong earning and debt buybacks coupled with strengthening global demand for agriculture commodities have given it flexibility to renew its emphasis on acquisitions.

ADM also is poised to benefit from the extension of a U.S. ethanol tax credit for 2011 as well as a expected increase in U.S. limits on the amount of ethanol permitted in gasoline. 

For the quarter ended Dec. 31, ADM reported a profit of $732 million, or $1.14 a share, up from $567 million, or 88 cents a share, a year earlier.  The latest period included 25 cents a share in inventory-related charges, while the prior year included 5 cents a share in such charges.  Revenue climbed 32 percent to $20.93 billion. 

ADM’s much smaller bioproducts division — which includes its ethanol business — had earnings more than double on improved ethanol margins and volume, as well as stronger lysine margins.