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Commodities

Renewable Fuel Makers Set for Strong Q2 as RINs, Diesel Prices Lift Earnings, TPH Says

Renewable fuel producers are expected to report a sharp improvement in Q2 earnings as stronger government blending mandates, higher diesel prices and a tightening California carbon market boost margins across the sector, TPH Energy strategists said in a note on Wednesday.Matthew Blair, analyst at TPH Energy, said Q2 EBITDA for renewable fuel companies is expected to rise to an average of $600 million, above the consensus estimate of $564 million and higher than the $410 million reported in Q1.Blair said the gains would mark the strongest quarterly performance for many companies in at least four years. TPH said the sector has benefited from three major tailwinds.The US Environmental Protection Agency's 2026 Renewable Volume Obligation introduced more aggressive blending targets, with requirements about 20% higher than the previous year.However, despite a recent increase in renewable diesel utilization, the market is projected to fall short of the mandated volumes unless imports rise substantially.Renewable Identification Numbers, which are used by refiners and fuel blenders to comply with federal biofuel obligations, strengthened during the quarter.D4 renewable diesel RIN prices averaged $2.11 per gallon in Q2, up from $1.39 in the previous quarter, with prices recently approaching $2.50 per gallon.Blair said even with RD utilization picking up recently, the industry is likely to come in well short of the 2026 RVO unless RD imports step up in a big way.The renewable fuels industry also benefited from higher conventional fuel prices following the US-Iran conflict, which disrupted global energy markets and contributed to tighter supply conditions.Flat diesel prices climbed to $3.78 per gallon in Q2 from $2.78 per gallon in the previous quarter, despite repeated expectations during much of the period that diplomatic efforts could lead to a ceasefire.California's Low Carbon Fuel Standard market provided another boost, moving into a supply deficit for the first time in four years as stricter carbon intensity requirements reduced credit availability.LCFS credit prices averaged $68 per metric ton during the quarter, compared with $65/mt in the prior quarter, and have since climbed closer to $75/mt.TPH expects several companies to outperform Wall Street expectations, with the biggest upside projected for Green Plains (GPRE), Archer-Daniels-Midland (ADM) and Neste.Green Plains is forecast to exceed consensus EBITDA estimates by about 15%, supported by stronger co-product contributions.Archer-Daniels is expected to beat estimates by about 10%, driven by improving soybean crushing margins and ethanol market trends, while Neste is projected to come in roughly 7% above consensus as refining conditions improve.Going forward to Q3, renewable natural gas markets are showing further improvement, supported by stronger D3 RIN and LCFS credit prices.Other segments, including renewable diesel, ethanol and soybean crushing, have softened slightly from second-quarter levels but remain above year-ago levels and five-year averages.Price: $17.65, Change: $-0.02, Percent Change: -0.11%

$ADM$GPRE
Wire

Archer-Daniels-Midland Benefits From Stronger Crush Margins, but Bunge Offers More Upside, Morgan Stanley Says

Archer-Daniels-Midland's (ADM) improving crush margins have raised earnings expectations, but Bunge Global (BG) remains the preferred long-term investment due to its Viterra synergies and stronger upside potential, Morgan Stanley said in a note Monday.Archer-Daniels-Midland is set to release its Q2 results on Aug. 4 and Bunge Global on July 29.The bank said it expects Archer-Daniels-Midland's Q2 earnings per share to come in about 3% above consensus, driven mainly by stronger crush margins, although the benefit is partly offset by a smaller reversal of the large mark-to-market loss recorded in Q1.For Bunge Global, the firm expects Q2 EPS to beat consensus by about 3% and has raised its 2026 EPS forecast to 4% above consensus and above the high end of the company's guidance. It also sees greater upside in 2027, with its forecast 9% above consensus."We continue to prefer Bunge's idiosyncratic opportunity over company-specific risks that could limit Archer-Daniels-Midland earnings upside," the firm said, adding that it doesn't expect Bunge's long-term investment case to play out linearly and sees near-term dislocations as a buying opportunity.Morgan Stanley raised its price target on Archer-Daniels-Midland to $60 from $58.Price: $85.25, Change: $-0.65, Percent Change: -0.76%

$ADM$BG
Commodities

US Soy Crush Margins Hold Near 5-Year High Despite Q3 Pullback, TPH Says

US soy crush margins eased to $117 per metric ton in Q3 2026 from $139/mt in Q2 but remained at a new five-year high for the period, TPH Energy said Thursday.TPH Energy said weaker soybean oil prices drove most of the decline over the quarter, cutting the indicator by $12/mt as lower crude oil and diesel prices pressured renewable diesel and biodiesel margins.The report said soybean oil generates about 50% of crush margin value despite representing only 18% of production volume. About 54% of US soybean oil is used in the biofuels market, making prices highly sensitive to fuel economics.Higher soybean feedstock costs reduced the indicator by another $6/mt from Q2. TPH cited the latest World Agricultural Supply and Demand Estimates report, which forecast 9% annual export growth and 5% higher domestic production.Soybean meal prices slipped 1%, lowering crush margins by $4/mt as broader protein markets weakened. Dried distillers grains and canola meal prices also declined, according to the report.Despite the quarterly decline, the indicator remains about $40/mt above the five-year average, reflecting margins that continue to exceed midcycle levels, TPH said.TPH expects strong Renewable Volume Obligations to support soybean oil demand after regulators raised total blending requirements by about 20% this year, with additional increases scheduled for next year.The firm said these market trends remain most relevant for renewable fuels exposure at Archer-Daniels-Midland (ADM) and Bunge Global (BG), which continue to benefit from supportive long-term biofuel demand.Price: $83.13, Change: $+0.83, Percent Change: +1.00%

$ADM$BG
Commodities

Resilient Q3 Ethanol Margins Offset Weaker Co-Product Prices, TPH Says

Q3 ethanol margins averaged $1.05 per gallon so far, exceeding previous expectations despite moderating from the prior quarter, according to TPH Energy Research in a Wednesday note.The firm said its Midwest ethanol margin indicator eased from $1.15/gal in Q2 but remained above $1.03/gal a year earlier, reflecting continued strength in industry profitability.Lower co-product prices weighed on margins during the quarter. Falling dried distillers grains prices, driven by weaker soymeal values, reduced the margin indicator by 6 cents per gallon over the quarter, while softer corn oil prices trimmed the margin by another 2 cents.The ethanol-to-corn spread narrowed by just 2 cents per gallon from the prior quarter as lower corn prices largely offset slightly weaker ethanol prices.TPH Energy said corn prices declined despite last week's bullish World Agricultural Supply and Demand Estimates report, which lowered year-end corn inventories on stronger exports.The firm said ethanol exports continue to support the industry and expects US shipments to reach 2.2 billion gallons in 2026, up from 2.0 billion gallons in 2025.Stronger-than-expected ethanol margins prompted TPH Energy to raise its third-quarter EBITDA forecast for Green Plains (GPRE) to $82 million from the consensus estimate of $69 million.TPH Energy also expects Green Plains to generate a 19% free cash flow yield in 2026, supported by resilient ethanol margins and favorable export trends.The brokerage said the improving ethanol market should also benefit Archer-Daniels-Midland (ADM), Aemetis (AMTX) and Valero Energy (VLO).Price: $16.65, Change: $-0.47, Percent Change: -2.75%

$ADM$AMTX$GPRE$VLO
Commodities

Renewable Fuel Investors Upbeat as Tighter US Biofuel Mandates Lift Outlook, TPH Says

Investors focused on renewable fuels are becoming more optimistic about the sector after the US Environmental Protection Agency's proposed 2026 biofuel blending requirements tightened the market for renewable fuel credits, TPH Energy Research analyst Matthew Blair said in a note on Friday.The improved sentiment has been driven largely by stronger prices for Renewable Identification Numbers, the tradable credits used to comply with the federal Renewable Fuel Standard.Tighter supplies of the credits have improved profit margins for renewable diesel producers, soybean processors, and ethanol makers, Blair said, adding that the D4 RIN credit prices may need to rise further to encourage additional imports of renewable fuels into the US. D4 RINs are credits primarily used for biomass-based diesel.Investors also question whether the Trump administration could grant a waiver to reduce or suspend Renewable Fuel Standard requirements, but Blair said any such action is unlikely.Among publicly traded companies, Blair said investors show the greatest interest in Darling Ingredients (DAR), Bunge Global (BG) and Archer-Daniels-Midland (ADM), as well as ethanol producer Green Plains (GPRE).Price: $60.41, Change: $+0.22, Percent Change: +0.37%

$ADM$BG$DAR$GPRE
Commodities

Trump Pushes to Make Year-Round E15 Sales Permanent, TPH Says

The Trump administration is seeking permanent authorization for year-round sales of E15 gasoline, a move that could modestly boost US ethanol demand and support biofuel producers, TPH Energy strategists said in a Thursday note.Matthew Blair, an analyst at TPH Energy, said that the White House Office of Management and Budget has requested legislation to allow the higher-ethanol fuel blend to be sold year-round as part of a supplemental budget proposal.The measure follows the passage of a similar bill in the House of Representatives in May, though its prospects in the Senate remain uncertain.TPH analysts said E15, a gasoline blend containing 15% ethanol, is currently restricted during the summer months in much of the US due to concerns that its higher volatility could contribute to smog formation in hot weather.Federal regulators have routinely issued temporary waivers to allow summertime sales, but the latest proposal would make those permissions permanent.The move marks the latest step by the administration to support the US biofuels industry, a key constituency in agricultural states across the Midwest.Though the potential increase in demand may be limited initially, analysts say even incremental gains in ethanol blending rates could benefit major producers, including Green Plains (GPRE), Archer-Daniels-Midland (ADM) and Valero Energy (VLO).There are fewer than 5,000 E15 pumps across the US, representing less than 2% market share, Blair said, adding that even with approval for year-round E15, actual volumes would likely remain quite small at first.However, TPH said ethanol's current pricing advantage over gasoline could encourage wider adoption. Midwest ethanol is trading at about $1.85 per gallon, compared with about $2.92 per gallon for Midwest gasoline.The US consumed about 13.6 billion gallons of ethanol last year, largely unchanged from the previous year and below pre-pandemic levels.TPH said a permanent shift to year-round E15 sales would likely provide a gradual increase in domestic ethanol demand rather than an immediate surge, analysts said. However, at a time when US biofuel consumption has stagnated, even modest growth could improve margins and utilization rates for ethanol producers.The proposal now faces the more difficult challenge of securing Senate approval, where bipartisan support for biofuel legislation has historically been uneven despite backing from farm-state lawmakers and the ethanol industry.Price: $251.73, Change: $+9.29, Percent Change: +3.83%

$ADM$GPRE$VLO
Commodities

Strong Refining Margins, Falling Crude Stocks Boost Energy Outlook, UBS Says

US crude inventories dropped by 8.2 million barrels as refinery utilization climbed to 96.7%, reinforcing concerns over tightening fuel supplies, UBS said in a Wednesday note.The Department of Energy reported an 8.2 million-barrel crude draw, exceeding consensus expectations for a 4.6 million-barrel decline and aligning with the American Petroleum Institute estimate of an 8.33 million-barrel draw, UBS said.Gasoline inventories fell by 0.90 million barrels, compared with forecasts for a 1 million-barrel decline. Diesel inventories increased by 0.95 million barrels, versus expectations for a 500,000-barrel draw, according to UBS.Refiners increased utilization rates by 1.4 percentage points over the week to 96.7%. UBS said operators rarely sustain such levels for long, yet fuel inventories continue to tighten despite elevated processing rates.US fuel inventories continue to trail historical levels, with diesel stocks running 12.8% below the five-year average and 5.8% below year-ago levels. Gasoline inventories also remain tight, standing 6.3% below the five-year average and 6.9% lower than a year earlier, according to UBS.Inventory shortages persist across key regions. Diesel stocks in PADD 1 sit 21.6% below the five-year average, while PADD 5 inventories remain 16.7% below historical levels. Gasoline inventories also trail their five-year averages, with deficits ranging from 3.0% in PADD 1 to 10.3% in PADD 3, UBS said.Margins remain well above mid-cycle levels, supporting refinery profitability. In Q2 2026, Mid-Continent cracks averaged $28.58 per barrel versus $13.40/bbl in Q1 2026 and $14.63/bbl a year earlier, while West Coast cracks increased to $41.80/bbl from $24.65/bbl and $25.28/bbl, respectively, UBS added.Strong margin conditions also extended to other regions. North Atlantic cracks averaged $27.64/bbl in Q2 2026, up from $17.41/bbl in the previous quarter and $13.76/bbl a year earlier, while Gulf Coast cracks rose to $30.64/bbl from $18.36/bbl and $12.76/bbl, respectively.Driven by a growing project pipeline, Plains All American Pipeline (PAA) increased its 2026 growth capital spending forecast to $400 million to $450 million net to the partnership from roughly $350 million previously. The company still expects maintenance spending to remain around $185 million.Plains has moved forward with several high-return projects across its Permian long-haul, Permian gathering and Canadian gathering systems as stronger customer interest and improving oil market fundamentals support additional investment, UBS said.After touring Archer-Daniels-Midland's (ADM) Decatur facility, UBS highlighted strong agricultural services results and continued demand for soybean meal in domestic and export markets. Management also views organic expansion opportunities as more attractive than bolt-on acquisitions at present.Improving margins across refining, chemicals and renewable diesel operations could drive stronger earnings and cash flow for Phillips 66 (PSX) through 2026. The company could also accelerate debt reduction as profitability improves, UBS said.Price: $21.34, Change: $-0.24, Percent Change: -1.11%

$ADM$PAA$PSX
Wire

UBS Adjusts Price Target on Archer-Daniels-Midland to $95 From $90, Maintains Buy Rating

Archer-Daniels-Midland (ADM) has an average rating of hold and mean price target of $77.11, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $78.50, Change: $-1.72, Percent Change: -2.14%

$ADM
Commodities

Renewable Fuel Stocks Fall as RNG Weakness Persists, TPH Says

Renewable fuel stocks fell last week as weakness in renewable natural gas firms overshadowed improving profit margins across several low-carbon fuel markets, TPH Energy Research said in a Monday note.Matthew Blair, analyst at TPH Energy, said that the renewable fuels sector declined 3% during the week, slightly worse than the S&P 500's 2.6% drop, with RNG-focused companies accounting for the four worst-performing stocks in the group.Agribusiness companies with exposure to biofuel feedstocks fared better. TPH said that Soybean crushers Bunge and Archer-Daniels-Midland were among the top performers, gaining 2.6% and 1.4%, respectively, as processing margins continued to improve.Margins for renewable diesel strengthened significantly, with low-carbon intensity renewable diesel indicators rising by $0.27 to $0.29 per gallon.The gains were driven by higher ultra-low sulfur diesel prices and stronger D4 Renewable Identification Number credits, while feedstock costs remained largely unchanged.RNG economics also improved despite the weakness in sector equities. Indicators for both landfill gas and dairy-based RNG increased by about $1 per million British thermal units, supported by stronger D3 RIN values.Elsewhere, Midwest ethanol margins rose $0.3 per gallon as corn prices eased, while soybean crushing margins increased by about $10 per metric ton on lower soybean costs.TPH said the renewable fuels sector is currently trading at a forward enterprise value-to-EBITDA multiple of 8.9 times, broadly in line with its three-year average valuation. Meanwhile, policy and regulatory developments continued to dominate investor attention.Renewable natural gas industry groups launched legal challenges against the US Environmental Protection Agency's decision to reduce the 2025 cellulosic biofuel Renewable Volume Obligation and exclude electric vehicle charging credits from the Renewable Fuel Standard program.Simultaneously, the American Fuel & Petrochemical Manufacturers filed its own lawsuit challenging the EPA's biofuel blending mandates for 2026/27.Germany's revised renewable fuel legislation came into effect, introducing new compliance requirements for fuel suppliers and renewable energy producers.On the corporate front, renewable fuels producer Clean Energy Fuels began commercial production of RNG at its Millenkamp dairy project in Idaho, adding to the company's portfolio of renewable gas assets that supply the transportation sector.Though improving margins supported fundamentals, TPH analysts said investors remained cautious amid ongoing policy uncertainty and legal disputes surrounding US renewable fuel mandates.Price: $126.44, Change: $-0.02, Percent Change: -0.02%

$ADM$BG
Commodities

D4 RIN Production Rises in April but Still Misses 2026 Target Pace, TPH Energy Says

D4 renewable fuel credit production rose in April, though output still trails the pace needed to meet 2026 renewable fuel targets, TPH Energy said Friday.April D4 RIN generation rose to 422 million from 399 million in March and 363 million a year earlier, while domestic supply made up 100% of sourcing for the second straight month, TPH Energy said.In April, renewable diesel accounted for 64% of the fuel mix, down from 65% in March, according to TPH Energy.Biodiesel accounted for 31% of the April mix, up from 29% in March, while sustainable aviation fuel represented 5%, down from 6% a month earlier.Renewable diesel utilization climbed to 72% in April from 69% in March, while biodiesel utilization increased to 79% from 72% over the same period, according to TPH Energy.TPH Energy estimates combined D4-D5-D6 RIN generation will reach 21.63 billion in 2026 after year-to-date growth of only 6%, well below the Renewable Volume Obligation target of 25.45 billion.Even if all US renewable diesel and biodiesel capacity operates at full rates for the rest of 2026, total D4-D5-D6 generation would still reach only 24.20 billion, missing the target by 5%, TPH Energy said.Overall, TPH Energy said the trends remain positive for US renewable diesel producers such as Darling Ingredients (DAR), as well as for feedstock suppliers Archer-Daniels-Midland (ADM) and Bunge Global (BG).D3 RIN generation rose to 118 million in March from 109 million in February and 99 million a year earlier, while year-to-date growth of 27% puts projected 2026 generation at 1.39 billion versus the 1.36 billion mandate, the report said.Price: $58.01, Change: $+0.15, Percent Change: +0.26%

$ADM$BG$DAR
Research

Research Alert: CFRA Maintains Buy Opinion On Shares Of Archer-daniels-midland Company

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We lift our 12-month target from $76 to $88, representing ~15x our 2027 EPS of $5.83 (raised from $4.91; 2026 raised to $4.65 from $4.23). This multiple reflects a slight premium to the company's long-term mean of 14x. Our raised estimates and target price reflect a strong start to 2026, with the company's earnings trajectory improving over the next several quarters due to robust crush margins (supported by recent biofuel policy clarity), stronger ethanol margins, and solid export demand, particularly from China. Soybean meal is also seeing strength, supported by favorable livestock fundamentals and strong global demand for protein. ADM is also experiencing a strong recovery in its Nutrition segment due to robust sales of flavors (e.g., natural colors) and improved efficiencies as the Decatur East plant comes online. ADM shares have been a standout performer so far this year, and we continue to see additional upside.

$ADM
Research

Research Alert: Adm: Solid Q1 Results; Guidance Raised As Expected On Biofuel Policy Clarity

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:Archer-Daniels-Midland (ADM) delivered solid Q1 2026 results, with adjusted EPS of $0.71 (+1% Y/Y) beating consensus by $0.05. The company raised full-year 2026 guidance to $4.15-$4.70 (consensus: $4.23) from $3.60-$4.25, supported by the March 2026 Renewable Fuel Standard finalization, which provides crucial policy clarity. This regulatory certainty supports the biofuels sector and strengthens ADM's investment thesis. Carbohydrate Solutions was the standout performer, with operating profit surging 48% to $356M as ethanol operations capitalized on strengthening margins from the improved policy environment. While AS&O faced headwinds with operating profit declining 34% to $273M due to mark-to-market impacts, its underlying operational performance showed resilience. The Nutrition segment continued its recovery trajectory with 42% growth in operating profit to $135M. We believe the combination of regulatory clarity and strong operational execution positions ADM well for improved earnings performance through 2026.

$ADM
Research

Research Alert: Adm: Solid Q1 Results; Guidance Raised As Expected On Biofuel Policy Clarity

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:Archer-Daniels-Midland (ADM) delivered solid Q1 2026 results, with adjusted EPS of $0.71 (+1% Y/Y) beating consensus by $0.05. The company raised full-year 2026 guidance to $4.15-$4.70 (consensus: $4.23) from $3.60-$4.25, supported by the March 2026 Renewable Fuel Standard finalization, which provides crucial policy clarity. This regulatory certainty supports the biofuels sector and strengthens ADM's investment thesis. Carbohydrate Solutions was the standout performer, with operating profit surging 48% to $356M as ethanol operations capitalized on strengthening margins from the improved policy environment. While AS&O faced headwinds with operating profit declining 34% to $273M due to mark-to-market impacts, its underlying operational performance showed resilience. The Nutrition segment continued its recovery trajectory with 42% growth in operating profit to $135M. We believe the combination of regulatory clarity and strong operational execution positions ADM well for improved earnings performance through 2026.

$ADM
Wire

Archer-Daniels-Midland, Bunge Global to Deliver 'Modest' Beats in Q1, Morgan Stanley Says

Archer-Daniels-Midland (ADM) and Bunge Global's (BG) Q1 financial results are both expected to "modestly" beat analyst estimates, Morgan Stanley analysts said in a Wednesday note to clients.Archer-Daniels-Midland is scheduled to report Q1 results on May 5, while Bunge Global is planned for April 29.Morgan Stanley said it prefers Bunge Global over Archer-Daniels-Midland, noting that synergy optionality positions Bunge Global better to meet or exceed investor expectations, while idiosyncratic risk at Archer-Daniels-Midland likely limits its upside potential.Morgan Stanley analysts raised their Q1 adjusted earnings per share estimate for Archer-Daniels-Midland to $0.69 from $0.68. Analysts polled by FactSet are looking for $0.65.For Bunge Global, Morgan Stanley increased its Q1 adjusted earnings per share estimate to $0.92 from $0.85. Analysts surveyed by FactSet expect $0.88.Analysts have an underweight rating on Archer-Daniels-Midland, but increased its price target to $54 from $50. On Bunge Global, they have an overweight rating and a $140 price target.Price: $69.69, Change: $-0.14, Percent Change: -0.20%

$ADM$BG

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