Bunge's forecast profit is below estimates due to trade and biofuel uncertainties
Bunge Global, the world's biggest oilseed processor, forecast lower-than expected profit in 2026 on Wednesday. The company is navigating commodity market volatility as well as?tight?margins that took a toll last year.
Bunge, a Missouri-based company, reported its lowest adjusted annual profit and fourth quarter since 2019 although both exceeded consensus analyst's estimates.
Analysts characterized the outlook as "conservative", but it will likely improve in the second half of the year once U.S. biofuel policies are finalized.
Arun Sundaram is a CFRA Research senior equity analyst. He said that investors are likely to take the outlook as a grain of sand, since it doesn't factor in any potential improvements in crush margins once the Renewable Fuel Standard has been finalized and updated biofuel blend requirements. A global grain glut has impacted crop prices and thinned the processing margins, as well as eroded profitability for the agribusiness industry. This has affected Bunge and peers like Cargill and ADM, who forecast a bleak outlook for 2026.
BIOFUEL POLICY UNCERTAINTY
Bunge's earnings were impacted by the trade turmoil caused by President Donald Trump’s tariff wars, and uncertainty surrounding biofuel policies. Customers became more cautious about booking deals in the future.
Greg Heckman, CEO of Bunge, said: "Externally the environment is complex with geopolitical tensions and evolving trade flows, as well as uncertainty surrounding biofuel policy in the U.S.
Data compiled by LSEG revealed that Bunge's adjusted earnings for the quarter ending December 31 were $1.99 per share, down from $2.13 a yeaear earlier but higher than the consensus estimate at $1.81. The full-year adjusted profit for 2025 fell from $9.19 to $7.57 per share. This was down from $9.19 one year ago, but above the $7.40 consensus estimate.
Volumes and revenues were boosted by the company's increased grain-handling capacity and processing capability following its merger with Viterra mid-2025. Tuesday, the U.S. Treasury Department published "proposed rules" on how biofuel producers can get larger tax credits. The rules would encourage the use of feedstocks from North American oilseeds such as canola and soy, and tweak the method for calculating carbon intensity. Market participants are awaiting the final rules for biofuel blending, which is expected to be released next month. Analysts and traders expect the quotas will remain close to the initial proposal. This would boost volumes and drop a plan that penalized imports of renewable feedstocks and fuels. (Reporting from Karl Plume, Chicago, and Pooja menon, Bengaluru, with editing by Sahal muhammed, Kirsten donovan, David Holmes; Alexander Smith, Rod Nickel).
(source: Reuters)