A 50,000t wheat cargo bound for South Africa loads at GrainCorp’s Carrington terminal in Newcastle in August. Photo: GrainCorp

LOW global grain prices and cyclical oversupply are behind an expected drop in GrainCorp profits for the current financial year ending September 30 of 22-42 percent, according to earnings guidance released to the ASX today.

The agribusiness said that net profit after tax for FY26 was expected in the range $20-50 million, well down on the FY25 result of $86M.

Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) are forecast to fall in FY26 to $200-$240M, down from $308M the previous year.

Global grain markets continue to be characterised by cyclical oversupply and low prices, while the rate of grower selling across eastern Australia remains slow, GrainCorp said in a statement published to the ASX.

The company said these market conditions are continuing to place pressure on grain export margins, now at multi-year lows.

GrainCorp managing director and chief executive officer Robert Spurway said the East Coast Australia (ECA) winter harvest was now substantially complete, and the FY26 export sales program has progressed.

“Record global production has created an oversupply of grain, outpacing demand growth and placing downward pressure on commodity prices for the whole market,” Mr Spurway said.

“Despite strong ECA production volumes, with ABARES estimating a 2025-26 ECA winter crop of 31.2 million tonnes, the current abundance of global supply and low grain prices have reduced incentives for growers to deliver grain to market.

“As a result, GrainCorp is experiencing lower margins on grain handled in FY26.

“As previously announced, GrainCorp anticipates FY26 receival volumes to be 11-12Mt, which compares to 13.3Mt in FY25.

“We expect exports of 5.5-6.5Mt (FY25: 7Mt).

“In Nutrition and Energy, we anticipate FY26 average crush margins and Animal Nutrition contribution to be in line with FY25.

“Agri energy contribution is expected to be lower than FY25 due to ongoing uncertainty around US biofuels policy.”

Mr Spurway said GrainCorp was “exercising strong operating discipline” in response to these operating conditions.

“At this point in the cycle, we are accelerating cost management initiatives while continuing to deliver high-quality and reliable services to growers.

“GrainCorp’s balance sheet remains strong and positions us well to continue executing our strategy.”

The earnings guidance excludes business transformation costs and the impacts of the sale of GrainsConnect Canada Inc. (GCC) and is subject to a range of market variables.

GrainCorp’s FY26 guidance remains subject to a range of variables, including: grain volumes, including sorghum receivals; timing and volume of grain exports; supply chain margins; oilseed crush margins; and new season opportunities.

GrainCorp’s AGM will be held on February 18.

Source: GrainCorp