ADM raises its profit forecast for 2026 on the back of strong margins and favorable biofuels outlook
U.S. agribusiness Archer-Daniels-Midland raised its 2026 profit outlook on Tuesday as it beat Wall Street estimates for second-quarter earnings on strong crop processing margins and favorable U.S. biofuels policies. The Iran war-induced surge in energy prices has boosted margins on corn-based ethanol and soybean crushing for crop-based diesel. The U.S. biofuel blend mandates were also increased after a long delay, which lifted the uncertainty that had weighed on earnings. ADM and other agribusinesses such as Bunge and Cargill have seen their margins increase after a global grain glut and trade disruptions lowered earnings in recent quarters. ADM, based in Chicago, raised its 2026 adjusted earnings to $5.15 to $5.60 a share. This is compared to a previous forecast of $4.15 to $4.70 a share. The company cited improvement?in the crushing and ethanol business and that it expected a "constructive environment" to continue. ADM shares rose by 3.8% during premarket trading. A rally in grain price since the beginning of the Iran War triggered new farmer sales of corn and soyabeans, which had been stored from last years' crop during a long period of low prices. ADM's largest business segment - ag services & oilseeds - saw its operating profit jump 129% from a year ago. This was due to margins expanding after the U.S. Government ordered refiners this year to blend in a record amount of biofuels for gasoline and diesel. The global grains merchant was also helped by a strong crop grain export market. The carbohydrate solutions division, which includes ADM’s ethanol and sweeteners business, saw a 22% increase year-over-year, while the high-margin nutritional unit posted a 51% increase in operating profit.
According to data compiled and analyzed by LSEG, the company reported an adjusted profit?of 1.84 per share during the three-month period ended June 30. This was higher than analysts' estimates of $1.44.
(source: Reuters)
