ADM Lowers 2026 Profit Forecast on Biofuel Policy Delay

ADM Profit Outlook Weakens Amid Policy Uncertainty

Archer-Daniels-Midland has issued a 2026 adjusted profit forecast below analyst expectations, citing significant delays in U.S. biofuel policy. The grain trader projects earnings between $3.60 and $4.25 per share, with the midpoint falling short of the $4.24 average estimate. This announcement led to a 4.6% drop in its shares during premarket trading.

Overview of the Biofuel Policy Delay

The U.S. government's deferral of its 2026 biofuel blending quotas has created uncertainty in the market. Originally expected in late 2025, the delay forces companies like ADM to postpone investment and spending decisions. The policy is crucial for determining the required use of renewable fuels, which directly impacts demand for feedstocks like soybean oil.

Market and Financial Impact on ADM

The policy uncertainty has already affected ADM's financial performance. The company's largest segment, agricultural services and oilseeds, saw operating profit decline by 31% to $444 million in the last reported quarter. The slowed use of soybean oil and other feedstocks due to unclear blending requirements is a primary driver of this downturn.

Summary

ADM's lower profit forecast highlights the direct financial consequences of regulatory delays. Market participants will closely watch for the finalization of the U.S. biofuel quotas, as this will provide much-needed clarity for the industry and could influence ADM's future performance and stock valuation.

FAQ

Q: Why did ADM lower its profit forecast?
A: ADM lowered its forecast due to the continued delay in the U.S. government's biofuel blending policy, which has reduced demand for its soybean oil feedstocks.

Q: What was the immediate market reaction to ADM's announcement?
A: ADM's shares fell by 4.6% in premarket trading following the news.

Source: Investing.com