UPDATE 3-ADM profit soars past estimates; sees more demand

* Q1 EPS 77 cents; Street view 57 cents

* Says declines in demand bottoming

* Sees ethanol margins remaining positive

* Shares up more than 5 pct (Recasts with share move, company comments; adds bylines)

By Martinne Geller and Dhanya Skariachan

NEW YORK, Nov 3 (Reuters) - U.S. agricultural processor Archer Daniels Midland Co (ADM.N) reported quarterly earnings that blew past expectations and said declines in demand for food, feed and fuel were bottoming, sending shares up more than 5 percent.

ADM, which benefited from lower costs for manufacturing and for corn, saw ethanol margins turn positive in the quarter and expects them to remain so. In the quarter, profit at ADM's corn processing unit -- which accounts for about 13 percent of its total business -- rose 59 percent.

ADM is the second-largest producer of ethanol made from corn in the United States and will be the largest once two new plants currently under construction come on line.

Government forecasts for the second-largest corn crop ever helped drag corn prices to their lowest level of 2009 in the quarter.

On a conference call, ADM said domestic demand was stable and export demand was "picking up."

ADM rivals Bunge Ltd (BG.N) and privately held Cargill reported disappointing results last month, citing poor fertilizer profits. [ID:nN22441460] [ID:nN13166190]

For the fiscal first quarter that ended Sept. 30, ADM reported a net profit of $496 million, or 77 cents per share, compared with last year's record-large, first-quarter profit of $1.05 billion, or $1.62 per share.

Analysts on average were expecting 57 cents per share, according to Thomson Reuters I/B/E/S.

Net sales fell 29 percent to $14.92 billion, hurt by lower selling prices and the impact of foreign exchange translation.

The company said average selling prices decreased in line with drops in underlying commodity costs. It said there were no material changes in overall sales quantities.

Profit in ADM's oilseeds processing unit tumbled 44 percent due to lower margins and production volumes, resulting from a short global soybean supply. Profit in its agricultural services division fell 59 percent on reduced demand and less volatile commodity market conditions.

ADM's shares rose $1.58, or 5.2 percent, to $32.10 in early trading on the New York Stock Exchange. (Reporting by Martinne Geller and Dhanya Skariachan; Editing by John Wallace and Maureen Bavdek)