The top U.S. supplier of corn and soy seeds has invested heavily to improve the yields of its products as it bets on the long-term demand for food, feedstock, and biofuels.

The company forecast 2027 revenue to be in the range of $18.2 billion to $18.8 billion (C$25.5 billion to 26.3 billion) , compared with its expected 2024 revenue of about $17.1 billion (C$23.9 billion).

Corteva also predicted $1 billion (C$1.4 billion) in cost declines through 2027, largely due to a fall in commodity prices.

The company projected flat to low-single-digit percentage growth until 2027 compared to 2024 levels for its crop protection segment.

The insecticide maker’s profit has been dented since last year by a slump in demand for insecticides and fungicides as farmers have slowed purchases in the face of lower income and rising costs.

“I think we have taken a conservative view of the market, but we expect it to return to sort of normal growth rates in 2026,” CEO Chuck Magro said at the company’s investor day.

The Indianapolis-based company earlier this month cut its annual sales forecast and reported a larger-than-expected loss for the third quarter due to weak demand and lower prices.

Corteva also said it expects to return about $4.5 billion (C$6.3 billion) to shareholders between 2025 and 2027, after announcing a new buyback program of $3 billion (C$4.2 billion) on Tuesday.

The company’s existing $2 billion ($2.8 billion) share repurchase plan, announced in 2022, had about $750 million (C$1.05 billion) remaining as of Sept. 30.

Shares of the company were up 1.5 per cent in afternoon trade.

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The news comes one day after the global grain trader, which has been embroiled in controversy over its accounting practices, sought an extension from the U.S. Securities and Exchange Commission to file its third quarter financial report because it could not meet the deadline.

Accounting irregularities have sparked several government investigations and led to the departure of CFO Vikram Luthar in September.

The accounting problems also forced the company to correct six years of financial data earlier this year after an internal probe found sales between its nutrition business and other core units were not recorded properly.

On Wednesday, company spokesperson Jackie Anderson told Reuters that Bard was leaving the company for personal reasons and “to make any other assumption is factually inaccurate. … His leadership will be greatly missed.”

ADM has tried to assuage investor concerns by testing new internal controls and naming 3M’s Monish Patolawala as its new chief financial officer. Earlier this month, ADM’s board of directors elected AT&T Inc’s general counsel, David R. McAtee II, to its board.

Bard has over 25 years of legal, compliance and risk management experience, according to ADM’s website.

Prior to joining ADM in 2014, he worked at Coca-Cola Co. as senior anti-corruption and trade sanctions compliance counsel among other roles.

— Additional reporting by Tanay Dhumal in Bengaluru

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The company is set to lose about $2.3 billion (C$3.2 billion) of its market value if premarket losses hold through the day.

Archer-Daniels-Midland said it will amend its fiscal year 2023 Form 10-K and statements for the first and second quarter of this year.

This comes months after ADM corrected six years of financial data after an internal investigation found some sales between business units within the company were not recorded properly.

The accounting irregularities have sparked several government investigations and led to the departure of CEO Vikram Luthar in September.

“Investors will undoubtedly be disappointed that this accounting overhang has returned,” CFRA analyst Arun Sundaram said, adding that they would also question whether ADM will achieve its 2025 financial targets that were set three years ago.

The company postponed its earnings call, which was scheduled for Tuesday, and now expects to hold a webcast after it has filed the amended statements.

The restated filings will include some newly identified errors concerning additional intersegment sales for all three of its main segments, the company said late on Monday.

ADM said it does not expect any material impact and was working to complete the restatements as soon as “reasonably practicable”, but cut its 2024 adjusted earnings forecast to $4.50 to $5 per share, from $5.25 to $6.25 it had estimated earlier.

The company reported adjusted profit per share of $1.09 for the third quarter ended Sept. 30, compared with the average analyst estimate of $1.25, according to data compiled by LSEG.

ADM’s operating profit from Ag Services and Oilseeds segment, its largest by revenue, slumped 43 per cent from a year earlier.

The company also paid $96 million (C$133 million) in settlement claims in the quarter.

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Germany, the largest medical cannabis market in Europe, decriminalized cannabis possession and small-scale home cultivation in April, making it easier for doctors to prescribe it.

But only a few local companies are licensed to grow pot, and U.S. and Canadian firms are looking to capture a slice of the market by providing capital and exporting products to Germany.

Industry insiders said this is mostly driven by problems at home, with Canada plagued by an illicit market and oversupply. In the U.S., allure has dimmed amid regulatory hurdles, including a lack of timeline for federal legalization.

“Canadian market is very challenging for these producers and Germany is probably the largest opportunity for them,” said Frederico Gomes, analyst at brokerage ATB Capital Markets.

Last week, the large-scale Manitoba cannabis grower and retailer Delta 9 said it had filed for creditor protection as it was struggling to pay its bills.

Two German companies, including its largest cannabis producer Demecan and online seller Bloomwell Group, told Reuters they are in talks with US and Canadian companies for potential investments, and more deals may be announced in the coming days.

“We see a big movement in the global market. Everybody needs to be in Germany and wants to be in Germany now,” said Bloomwell CEO Niklas Kouparanis.

Canada’s OrganiGram had in June announced a 14 million euro ($15.21 million) investment—16.5 per cent of its overseas investments funds—in Berlin-based Sanity Group.

A demand spike following decriminalization would further encourage investors, with Cannabis research firm BDSA estimating Germany’s marijuana sales to hit $1.5 billion (C$2.1 billion) in 2024 and $3.7 billion (C$5.1 billion) by 2027.

Bloomwell said it added more patients in the three months following reclassification, compared to its first four years in business.

Another draw is that Germany does not impose high taxes on medical marijuana sales, keeping prices competitive to the illicit market in contrast to Canada, OrganiGram CEO Beena Goldenberg said.

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The top potash producer had halted work indefinitely on its clean ammonia project at Geismar, Louisiana, in 2023 due to rising costs and uncertainty around the timing of emerging uses for clean ammonia.

Industries such as marine shipping and power generation are evaluating and piloting the use of ammonia as a clean fuel.

A company executive at its investor day said that the company wants to prioritize investments in its core agriculture segment.

Nutrien said it intends to reduce controllable costs across its operations by nearly $200 million by 2026 while maintaining an average capex of $2.2 to $2.3 billion through 2026.

The Saskatchewan-based company said last month that it would indefinitely halt three fertilizer-blending facilities in Brazil due to a downturn in fertilizer markets.

Nutrien also said it would review strategic options for its 50 per cent ownership stake in the Argentinian firm Profertil, which produces 1.32 million tons of urea and 790,000 tons of ammonia per year.

Nutrien said it continues to pursue divesting its retail assets in Argentina, Chile and Uruguay, which account for two per cent of its retail earnings.

It is also aiming for potash and nitrogen sales volume growth of approximately 2-3 million tonnes by 2026, compared to 2023.

“Our simplified and focused plan prioritizes initiatives that enhance our ability to serve growers in our core markets,” CEO Ken Seitz said in a statement.

Toronto-listed shares of Nutrien were marginally down.

“We do not expect Nutrien’s strategic priorities or targets to come as a significant surprise to investors,” TD Cowen analysts wrote in a note.

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ADM confirmed some employees have received subpoenas from the Department of Justice amid an ongoing investigation over its accounting practices, after Reuters reported FBI agents delivered subpoenas in Illinois last week.

They show that a criminal probe into ADM’s accounting, first reported by Reuters last month, is escalating fast and directly relates to accounting issues that the company said in January were the subject of an internal probe.

ADM said some sales between business units within the company were not recorded at amounts approximating market value and corrected certain segment-specific financial information for previous financial statements from 2018 to 2023.

The company said the adjustments made to previous statements had no impact on consolidated financial statements as a whole for any period as they were made to sales between business segments.

“Looking ahead, we have developed a remediation plan with respect to the identified material weakness to enhance the reliability of our financial statements with respect to the pricing and reporting of such sales,” Chairman and CEO Juan Luciano said in a statement.

ADM shares were up 4.3 per cent though they are down nearly 21 per cent for the year.

ADM said that it would gradually implement enhancements to internal controls and will be more transparent about how it values goods bought and sold by one company segment from another.

It said, however, it will not be able to conclude whether the steps it is taking will remediate a “material weakness” in its accounting for “a sustained period of time” as the company tests the new controls.

Luciano spoke publicly following ADM’s fourth-quarter earnings release for the first time since announcing an internal investigation into accounting practices in its Nutrition unit in January that is now the subject of a criminal probe. He declined to answer questions on the investigations.

ADM reported a lower-than-expected fourth-quarter profit as oilseed processing and crop origination margins fell and as the company’s Nutrition unit, the subject of the investigation, posted a quarterly loss in an earnings statement delayed by nearly two months by the investigation.

ADM said the unit took a goodwill impairment charge of $137 million in 2023 in animal nutrition, a lower-margin portion of its Nutrition segment.

The company said on Tuesday it had received a voluntary document request from the Securities and Exchange Commission in June, prompting the internal investigation.

Government investigations are not evidence of wrongdoing and do not necessarily result in charges.

The investigations have brought more uncertainty to ADM’s Nutrition segment, which has struggled to meet lofty revenue targets and faces slowing demand for meat alternatives and supply chain problems.

Touted by executives to be the future of ADM, the Nutrition division, ADM’s smallest, had seen explosive growth until profits began to erode in late 2022.

The company reported an adjusted profit of $6.98 per share for 2023, in line with guidance lowered in January, after the investigation delayed the release of its financial results for nearly two months.

Adjusted earnings came to $1.36 per share for the fourth quarter, while analysts had expected earnings of $1.43 per share, according to LSEG data. ADM also announced an additional $2 billion in share repurchases, including $1 billion through an accelerated program.

ADM said it expects full-year earnings for 2024 between $5.25 and $6.25 per share, down 18% from last year due to lower margins and higher costs. In Nutrition, ADM forecast “mid single digit revenue growth” and higher operating income.

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Brazil’s soybean harvest is already delayed and that hold-up may push back planting for the main corn season that follows it early next year, which is likely to affect fertilizer companies like Nutrien NTR.TO, Mosaic MOS.N and Yara YAR.OL. Corn is one of the most fertilizer-intensive crops.

The drought, related to the El Nino climate phenomenon, illustrates the volatility facing global agriculture as climate change accelerates. Fertilizer companies are already coping with lower profits, as crop and fertilizer prices sag after peaking at the start of the Russia-Ukraine war.

Brazilian farmers usually sow less corn when they miss the ideal planting window in January or February, decreasing fertilizer demand.

U.S.-based fertilizer producer Mosaic expects “safrinha,” production, a Portuguese word referring to Brazil’s second corn harvest, to drop by 12% or 12.7 million metric tons, exceeding the Brazil government’s view of an 11.1 million ton drop from last year.

“I would call it a very plausible downside scenario because of how late the crop’s going to go in, how dry it currently is and how it’s likely that rains will shut down before that safrinha corn matures,” said Mosaic vice-president of market and strategic analysis Andy Jung.

Mosaic’s estimated crop decline would cut Brazilian demand for potash fertilizer by about four per cent or 500,000 tons, Jung said. That volume of potash is worth about $160 million at current prices.

A loss of sales on that scale would not be financially material as Mosaic could sell to other countries, Jung said. A worst-case scenario, however, would see safrinha corn harvest fall by 25 million tons or about one-quarter, he added.

As of early December, farmers had purchased only 60 per cent of their estimated fertilizer needs in the corn-producing states of Parana and Mato Grosso do Sul, compared with 80 per cent usually at this time of year, said Guilherme Schmitz, market development director at Oslo-based Yara’s Brazil unit.

Safrinha corn represents about 75 per cent of Brazil’s national corn output depending on the year.

“The combination of low crop prices and the uncertainty about the weather has growers really buying on a just-in-time basis their inputs for the safrinha crop,” said Jason Newton, chief economist at Canadian fertilizer company Nutrien.

Brazilian potash prices have fallen to around $325 per metric ton, down 36 per cent year over year, according to RBC, illustrating the weak demand.

Brazilian full-year potash imports are expected to be record-high, however, based on robust shipments earlier, though some of those imports may sit in retailers’ warehouses if farmers buy less.

The drought has also forced crop chemical producers FMC FMC.N and Corteva CTVA.N to sell Brazilian stock at a discount because of lower-than-expected demand, said Morningstar analyst Seth Goldstein.

Both companies may need to reduce production as rising global chemical demand may not fully offset lost Brazilian sales, he said.

“No doubt (the drought) could bring a reduction in the use of technology, including fertilizers, and a reduction in costs to make the harvest viable,” said Fernando Cadore, chief of farmer group Aprosoja in Mato Grosso.

FMC and Corteva did not respond to requests for comment.

Reduced Brazilian production could revive global corn prices and spur U.S. farmers next year to buy more fertilizer to maximize their corn production, offsetting lost Brazilian sales Mosaic’s Jung said.

Early forecasts suggest U.S. farmers will prioritize planting of soybeans, however, a crop that needs relatively little fertilizer.

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While higher fertilizer prices dented demand in early second-half of last year, a fall in prices later in the year did not boost demand as farmers further awaited pricing trends to stabilize. Nutrien also said there was a “historic decline” in potash shipments in the second half of 2022.

“Growers are hesitant to step into the market with falling fertilizer prices,” Jason Newton, chief economist and head of market research at Nutrien, told Reuters.

Newton, however, expects the reduced fertilizer prices and strong crop prices to support demand as spring arrives.

The company forecast 2023 adjusted earnings in the range of $8.45 to $10.65 per share, compared with analysts’ estimate of $11.62 per share.

Excluding items, it reported earnings of $2.02 per share for the three months ended Dec. 31, compared with analysts’ average estimate of $2.62 per share, according to Refinitiv data.

The company also raised its dividend by 10.4 per cent to 53 cents per share and said its plans to reduce its share-count by five per cent.

Its peer CF Industries also reported lower sales, and said global nitrogen availability loosened in the fourth quarter with weak industrial demand in Europe being one of the reasons.

Yet, higher fertilizer prices helped the company post fourth-quarter net earnings of $860 million or $4.35 per share, compared with $705 million or $3.27 per share, a year ago.

— Reporting for Reuters by Sourasis Bose in Bangalore.

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The Calgary-based company said the facility will produce 20,000 barrels per day of renewable diesel and is expected to start production in 2025.

Imperial expects regulatory approval for the project, first announced in August 2021, in the near-term.

The facility will use low-carbon hydrogen and biofeedstock combined with a proprietary catalyst to produce the renewable diesel, which Imperial says will reduce greenhouse gas emissions by roughly three million tonnes a year compared with conventional fuels.

The low-carbon hydrogen will be produced with carbon capture and storage technology and supplied by Air Products.

Imperial is developing agreements with third parties for biofeedstock supply. Jon Wetmore, Imperial’s vice-president for downstream, said the project had moved forward quickly to help secure feedstocks such as canola, which needs to be run through crush plants and turned into canola oil before being used.

“Early mover advantage does help, we’re aware at some point there might not be enough crush capacity for all the renewable diesel projects being contemplated in Canada,” Wetmore told Reuters in an interview.

Alberta is already home to canola crushing plants including those of Cargill at Camrose, Richardson International at Lethbridge and ADM at Lloydminster.

Crush capacity is expected to increase also in neighbouring Saskatchewan, where Richardson plans to double its handle at Yorkton, while Cargill and Viterra each plan facilities in the Regina area.

The Strathcona project will be partly funded by credits granted under British Columbia’s provincial Low Carbon Fuel Standard, and a “significant portion” of the diesel produced will be supplied to B.C. to help Alberta’s other neighbouring province meet its emissions targets.

Site preparation and initial construction are underway and the project is expected to create about 600 direct construction jobs.

“We view this as a neutral impact for now given the capital outlay and the long-term adoption, appreciating that Imperial continues to make strategic investments to reduce emissions from its own operations,” National Bank analyst Travis Wood said in a note to clients.

— Reporting for Reuters by Nia Williams and Sourasis Bose. Includes files from Glacier FarmMedia Network staff.

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