UPDATE 3-ADM profit soars on higher prices; shares jump

* Adjusted EPS $1.61, tops Wall St view of 69 cents

* To form $500 mln Brazilian sugar cane joint venture

* Says interested in distressed U.S. ethanol assets

* Shares rise as much as 22 percent (Adds comments from conference call and analysts, byline)

By Martinne Geller

NEW YORK, Nov 4 (Reuters) - Archer Daniels Midland Co (ADM.N) reported a quarterly profit that beat Wall Street forecasts by a wide margin, helped by higher selling prices for foods like corn syrup and hedging gains on raw material costs.

Shares of ADM, one of the largest U.S. food processors and ethanol producers, shot up as much as 22 percent after the company revived investor hopes that it can make money and increase cash flow despite a slowing world economy and tighter credit conditions.

Agriculture and fertilizer stocks have been hit hard by the credit crisis as investors fear slower economic growth will reduce demand for raw materials such as grains and oilseeds. ADM shares had plunged 57 percent since April,

Expectations for ADM were also dimmed after rival Bunge Ltd (BG.N), the world's largest oilseed processor, posted quarterly earnings last month that missed Wall Street's expectations by about 50 percent, due mostly to foreign currency exchange rates.

By contrast, ADM, which does not have the same international exposure, increased profit and cash flow. Barclays Capital analyst Christopher Bledsoe said that meant ADM will have greater flexibility to offset future obstacles by paying down debt, buying back shares or accessing credit.

ADM also said on Tuesday that it is forming a $500 million joint venture with Brazil's Grupo Cabrera to make ethanol from sugar cane. The company is also interested in distressed assets of U.S. ethanol distillers squeezed by oil refiners and gyrating corn costs.

BIG BEAT

ADM, the world's largest producer of high-fructose corn syrup, said net income jumped to $1.05 billion, or $1.63 per share, in the fiscal first quarter ended Sept. 30, from $441 million, or 68 cents per share, a year earlier.

Excluding gains on securities and other one-time items, profit was $1.61 per share, well above analysts' average forecast of 69 cents, according to Reuters Estimates.

The company said it also benefited from a change in inventory valuations and a lower tax rate.

Net sales rose 65 percent to $21.16 billion. Sales volumes were comparable but selling prices of goods such as corn syrup and corn meal were much higher due to sharp rises in underlying commodity costs.