By Karl Plume and Pooja Menon
CHICAGO, Feb 3 (Reuters) – Archer-Daniels-Midland on Tuesday forecast current-year adjusted profit below analysts’ expectations as the uncertainty about U.S. biofuel policies and global trade upheaval that dragged on earnings last year remain a challenge for the grains merchant.
Chicago-based ADM, whose shares were down 2.3% in morning trading, reported its weakest fourth-quarter adjusted profit since 2019 as slumping soybean processing margins in North and South America and poor U.S. soybean exports pulled earnings down 31% in its Agricultural Services and Oilseeds business, its largest segment.
A global grains glut that has dragged down prices of staple crops like corn and soybeans to near multi-year lows has eroded profits for ADM and agribusiness peers like Bunge and Cargill. U.S. biofuel policy delays and trade turmoil stemming from U.S. President Donald Trump’s tariff wars created further pressure on the global grains merchants.
The downbeat outlook comes as the U.S. Securities and Exchange Commission and the Justice Department concluded investigations into whether ADM had inflated the performance of a key business segment. ADM agreed to pay a $40 million civil penalty to settle SEC charges while the DOJ closed its criminal investigation, drawing a line under a years-long scandal that forced the company to twice revise its financial reports.
ADM reported adjusted earnings of 87 cents per share for the quarter ended December 31, down from $1.14 a share a year earlier but above the consensus analyst estimate of 80 cents, according to data compiled by LSEG.
CEO Juan Luciano said operating profit for 2025 was affected by a turbulent global trade landscape and ongoing uncertainty around U.S. biofuel policy. Resolutions “should support a more constructive operating environment for us in 2026,” he added.
The U.S. government has been slow to finalize some biofuels policies, a delay that has slowed the use of feedstocks like the soybean oil produced at ADM processing plants.
ADM reported adjusted earnings for 2025 of $3.43 per share. Its 2026 adjusted earnings outlook of $3.60 to $4.25 per share hinged on those biofuel policies and whether slumping soy processing margins improve. The midpoint is less than analysts’ average estimate of $4.24 apiece, according to data compiled by LSEG.
“We believe once the RVO (biofuel blending quota) is finalized, there is a strong possibility earnings will come in towards the top end of the range,” UBS said in an analyst note, adding that no resolution is a “very low probability event.”
Last month, Reuters reported that the Trump administration plans to finalize long-delayed 2026 biofuel blending quotas by early March, keeping them close to its initial proposal while dropping a plan to penalize imports of renewable fuels and feedstocks.
The delays have led biofuel makers and the suppliers of feedstocks like ADM to hold back on deals and delay spending decisions that shape output and margins.
(Reporting by Karl Plume in Chicago and Pooja Menon in Bengaluru; Editing by Leroy Leo and Susan Fenton)
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