GrainCorp flags weaker FY26 earnings as grain export margins hit multi-year lows

GrainCorp (GNC) issued FY26 earnings guidance this morning, warning the market that the grain cycle is tightening due to global supply outpacing demand and export margins sitting at multi-year lows. The stock immediately dipped 14% as the market opened.

Key numbers:

• Underlying EBITDA: $200-240 million vs. $305.6 million ests (28% miss at the midpoint)

• Underlying NPAT: $20-50 million vs. $85.3 million ests (58% miss).

• Receival and exports: Receival volumes declined -10% to 11-12 million tonnes vs. 13.3 million tonnes in FY25, with exports forecast falling -7.6% to 5.5-6.5 million tonnes vs. 7.0 million tonnes a year ago

The company said the downgrade reflects a familiar late cycle setup: heavy global supply, weaker pricing and slower grower selling, which is compressing the profitability of moving grain into export channels.

GrainCorp managing director and CEO Robert Spurway pointed to “record global production” creating “an oversupply of grain”, while noting that despite strong east coast production, low prices have reduced incentives for growers to deliver to market.

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

The company referenced ABARES estimates for a 2025-26 east coast winter crop of 31.2 million tonnes, highlighting that volume alone is not enough when export margins are under pressure.

In Nutrition and Energy, GrainCorp expects FY26 average crush margins and Animal Nutrition contribution broadly in line with FY25, while Agri Energy contribution is expected to be lower amid uncertainty around US biofuels policy.

On costs, Spurway said the group is “accelerating cost management initiatives” while continuing to deliver high quality and reliable services to growers, assuring investors that the balance sheet “remains strong”.

Graincorp price chart (Source: Market Index)

Graincorp is now trading at fresh 10-month lows, following a series of weaker-than-expected earnings and guidance downgrades.

Last November, the stock suffered a 10.8% selloff after its FY25 result provided a weaker-than-expected margin guidance for FY26. One month later, on 18 December, it suffered another 15.3% dip after a trading update flagged FY26 receival volumes of 11-12Mt, a clear miss vs. market expectations and sharply lower than FY25. This was also inconsistent with prior ABARES forecasts, suggesting market share loss or increased on-farm storage.

This leads us to today's earnings downgrade, where the stock is just ~10% away from 4 year lows.