By Tom Polansek and Katha Kalia
May 5 (Reuters) - Grain trader Archer-Daniels-Midland increased its forecast for full-year profit and beat quarterly earnings estimates on Tuesday, citing a strong oilseed processing outlook and clarity over U.S. biofuel blending mandates.
Uncertainty over the mandate in recent quarters hung over global grain merchants that process crops into fuel and food, slowing the use of feedstocks such as soybean oil produced at ADM facilities.
After a lengthy delay, U.S. President
Donald Trump's administration in March ordered refiners to blend a record amount of biofuels into their gasoline and diesel this year and next.
ADM said it now had "a stable regulatory framework" and expected 2026 adjusted earnings between $4.15 and $4.70 per share, compared with its prior forecast of between $3.60 and $4.25 per share.
Shares rose 1.3% in premarket activity.
FULL-YEAR FORECAST RISES
ADM posted an adjusted profit of 71 cents per share for the three months ended March 31, compared with analysts' average estimate of 66 cents, according to data compiled by LSEG.
Some analysts expected a full-year forecast closer to $5 per share after rival Bunge Global last week also raised its annual outlook due to strong oilseed processing margins and expectations for improved biofuel demand.
"We do not think the guidance increase was a particularly positive surprise," JPMorgan analysts said. "If anything, it was a bit lower than we had heard from others."
ADM faces risks from tariff battles and the Iran war as the conflict disrupts global shipments of fuel and fertilizer needed by farmers.
CRUSHING UNIT POSTS LOSS
Soaring crude oil markets have pushed soybean oil prices to their loftiest levels in more than three years, a boon for oilseed processors such as ADM and Bunge.
However, ADM's crushing unit fell to a quarterly operating loss of $79 million from profits of $47 million a year earlier. The company attributed the decline to mark-to-market losses but said its plants processed larger volumes and the margin environment improved.
In ADM's agricultural services unit, quarterly operating profit rose 26% from a year earlier to $200 million. The business benefited from soybean and sorghum exports to China from North America, ADM said, as U.S. shipments increased following a late October trade truce between Washington and Beijing.
(Reporting by Katha Kalia in Bengaluru and Tom Polansek in Chicago; Editing by Shailesh Kuber, Ronojoy Mazumdar and Barbara Lewis)
