ADM raises outlook on biofuel boost despite Q1 mark-to-market drag

Archer-Daniels-Midland (NYSE:ADM) delivered a major upgrade to its full-year 2026 profit outlook, betting on a resurgence in the U.S. biofuels market to offset a first quarter tempered by volatile commodity pricing and mark-to-market accounting.

The Chicago-based global grain trader and processor now expects adjusted earnings per share for 2026 to range between $4.15 and $4.70, a significant jump from its previous guidance of $3.60 to $4.25.

The more optimistic view follows the U.S. Environmental Protection Agency’s finalization of the 2026 and 2027 Renewable Volume Obligations (RVO) in March, a move that is expected to stabilize and improve margins for ADM’s massive ethanol and oilseed crushing operations.

For the first quarter ended March 31, 2026, ADM reported net earnings of $298 million, or $0.62 per share.

On an adjusted basis, which strips out certain one-time items, earnings were $345 million, or $0.71 per share.

These results included approximately $275 million in negative mark-to-market and timing impacts, as the company navigated rapid shifts in global crop prices and supply chain flows.

The company’s Ag Services & Oilseeds segment, its largest revenue driver, began to see relief late in the quarter as crushing margins stabilized following a period of excess global supply.

Management indicated that the new RVO mandates provide a clearer demand floor for soybean oil and corn-based ethanol, which had faced headwinds throughout late 2025.

Despite the improved earnings outlook, ADM maintained its capital expenditure guidance at $1.3 billion to $1.5 billion for the year.