ADM missed Q2 profit estimates due to lower soy crush margins and declining demand for U.S. crops, leading to a 2% share drop. The company's Ag Services and Oilseeds unit saw a significant decline in quarterly operating profit.

Archer-Daniels-Midland Co. (ADM) shares fell 2% after the company missed Wall Street expectations for second-quarter profit, reporting an adjusted profit of $1.03 per share against the anticipated $1.22. The drop was attributed to lower soy crush margins and decreased demand for U.S. crops, reflecting the broader challenges faced by global grain merchants and oilseed processors.

Global stockpiles of corn and soybeans have driven crop prices to nearly four-year lows, exacerbating ADM’s difficulties. The Ag Services and Oilseeds arm experienced a 56% year-on-year plunge in quarterly operating profit. Factors included slow crop sales by South American farmers and a shift in demand to Brazilian supplies by China, the world's largest soy buyer.

ADM's CEO Juan Luciano

"We expect these dynamics to continue to pressure margins in our third quarter," ADM's CEO Juan Luciano told analysts. He also highlighted that biofuel producers’ reduced use of soyoil in favor of cheaper alternatives like imported used cooking oil further squeezed global soybean crush margins.

Despite the challenges, Luciano expressed optimism about the latter half of the year, noting, "We are reducing our footprint to match supply and demand around the globe." He expects improvement in ADM’s crush and ethanol business fundamentals moving forward.