Archer Daniels Midland Co., the largest U.S. ethanol producer, is considering a purchase of Brazil's Cosan SA as ADM prepares to enter Brazil's sugarcane ethanol business, The Wall Street Journal reported on its Web site on Friday.

Entering the sugarcane-ethanol field is a key component of ADM's short-term strategy, according to the report, which cites company executives including ADM's senior vice president of strategy, Steve Mills.

The company has not ruled out an outright purchase of Cosan, Brazil's largest sugar and ethanol producer, Mills told the Journal, without specifying how much ADM is willing to invest. The company could use Brazil as a production base for exports to the United States, according to the Journal.

An ADM spokesman in Decatur, Illinois was not immediately available to comment.

Price swings in crude oil and gasoline have pushed consumers to use more fuels from renewable sources like sugar, corn and soybeans. Brazil is the world's biggest producer of cane-based fuel ethanol, most of which is used in the domestic market.

Cosan has a market capitalization of about $3.5 billion, or 6.7 billion reais, according to Reuters data.

Cosan shares closed Thursday at 35.20 reais, while ADM finished the day at $33.83 per share.