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Can China's Soybean Buying Lift Archer Daniels' Ag Services?

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Key Takeaways

  • ADM's Ag Services operating profit surged 159% year over year in the second quarter of 2026.
  • China is buying about 1 million tons of U.S. soybeans weekly toward a 25-million-ton 2026 commitment.
  • ADM says fourth-quarter Ag Services results will partly hinge on U.S. exports and corn and sorghum programs.

Archer Daniels Midland Company’s (ADM - Free Report) Ag Services business could benefit from continued Chinese purchases of U.S. soybeans, as stronger export activity would support grain merchandising, origination and transportation volumes. Ag Services benefits from sourcing, transporting, storing, trading and exporting agricultural commodities, making higher U.S. soybean exports supportive of volumes and margins.

ADM’s second-quarter 2026 performance highlights the potential benefit. Ag Services operating profit surged 159% year over year, driven by strong commercial execution and the company’s ability to leverage its global asset network. Improved South American operations, including the return of ADM’s Barcarena, Brazil, export terminal to full operations, also contributed to results.

Importantly, management expects China’s soybean purchases to remain a contributor to the company’s 2026 outlook. ADM said China is well underway in fulfilling its commitment to purchase 25 million tons of U.S. soybeans in 2026 and has been buying roughly 1 million tons per week. Continued soybean purchases, along with potential exports of corn and sorghum, could support Ag Services activity later in the year.

However, management expects Ag Services results in the third quarter to be slightly lower than the second quarter, while fourth-quarter performance will depend partly on the pace of U.S. exports and whether additional corn and sorghum programs develop alongside soybean shipments. Nevertheless, sustained Chinese demand for U.S. soybeans could strengthen ADM’s Ag Services volumes and help support ADM’s overall performance.

ADM’s Peers

Dole plc (DOLE - Free Report) is pursuing a growth strategy centered on expanding its presence in attractive fresh-produce categories, strengthening sourcing capabilities, and investing in logistics and automation. DOLE is increasing its exposure to higher-growth categories such as organic produce, avocados, cherries and other value-added products. Dole is also investing in automation, Artificial Intelligence and warehouse infrastructure to improve efficiency and better serve customers.

Mission Produce, Inc. (AVO - Free Report) benefits from a vertically integrated model spanning sourcing, farming, packing, distribution and ripening, providing greater supply flexibility and supporting margins. AVO is also leveraging the Calavo acquisition to expand customer reach, enhance sourcing flexibility and increase North American packing capacity. Integration efforts are generating robust SG&A savings and network efficiencies, while the combined platform provides opportunities to optimize its distribution network and improve operational efficiency. These initiatives are strengthening AVO’s competitive position and creating a broader platform for sustainable growth.

ADM’s Price Performance, Valuation and Estimates

Archer Daniels shares have gained 11% in the past six months against the industry’s 3.9% drop.

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From a valuation standpoint, ADM trades at a forward price-to-earnings ratio of 14.30X compared with the industry’s average of 7.89X.

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The Zacks Consensus Estimate for ADM’s 2026 and 2027 earnings per share (EPS) indicates year-over-year growth of 59.2% and 3.9%, respectively. The company’s EPS estimate for 2026 and 2027 has been stable in the past 30 days.

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Archer Daniels currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

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