ADM cuts 2025 profit outlook on biofuel and trade uncertainty; shares tumble

Core Insights - Archer-Daniels-Midland (ADM) has cut its 2025 profit forecast for the third consecutive quarter due to U.S. biofuel policy uncertainty and global trade disruptions affecting oilseed crush margins, resulting in an 8% drop in shares during pre-market trading [1][3] - The company reported a significant decline in earnings, with a 21% drop in its agricultural services and oilseed segment to $379 million, and a staggering 93% decrease in crushing business earnings for the third quarter [3] Industry Context - U.S. tariff threats and changing deadlines have complicated operations for global grain merchants like ADM, leading to a halt in Chinese purchases of U.S. soybeans and driving crop prices to multi-year lows [2] - The deferral of U.S. biofuel policy decisions has slowed the use of feedstocks, particularly soybean oil, which is produced at ADM's processing plants [2] Future Outlook - Despite current challenges, ADM anticipates an earnings rebound in 2026, driven by proposals from the Trump administration for increased biofuel use and a reduction in trade tensions with China [4] - The company expects biofuel policy clarity and evolving trade policies to create demand signals for the industry, with analysts from UBS expressing optimism for 2026 due to higher biofuel mandates driving demand for soybean oil [4][5] - ADM reported an adjusted profit of 92 cents per share for the quarter ending September 30, marking a six-year low but exceeding analysts' average estimate of 85 cents [5]