GrainCorp shares dropped after the Australian crop handler revealed it would report profits below expectations, citing "challenging conditions" in grains which it warned were being suffered sector-wide.
The Sydney-based group, Australia's top listed grain handler, said it would report underlying earnings before interest, tax, depreciation and amortisation (ebitda) for the year to the end of September of Aus$235m, below the Aus$240m-270m it had previously guided to.
Underlying after-tax profits were pegged at Aus$45m, at the bottom of the range of Aus$45m-60m it had previously suggested, with reported earnings seen at Aus$32m, the weakest result since 2008, in the midst of the world financial crisis.
The downgrade reflected "continued challenging conditions in global grain markets" which had depressed results in GrainCorp's marketing division, and more than offsetting a benefit from exports hitting 3.5m tonnes, ahead of the 2.5m-3.0m tonnes that the group had forecast.
Indeed, Mark Palmquist, the GrainCorp chief executive, flagged a "good performance" in storage and logistics, including in grain receivals too, which hit 7.4m tonnes, coming in towards the top end of a target range of 7.0m-7.5m tonnes.
However, the group hinted at weaker margins on these volumes, flagging "intense competition" to originate grain in eastern Australia, and "strong competition" with other origins on export markets.
"This situation was exacerbated by lower fuel costs and ocean freight rates," which reduced Australia's competitive advantage in trading with the major Asian importing nations, "severely limiting the opportunities available".
In signs of the greater distances that Asian wheat buyers are sourcing supplies, France, the European Union's top wheat exporter, has raised exports to China in 2015-16, while the UK earlier in 2015 shipped its first wheat to the Philippines in five years.
Indeed, GrainCorp cautioned that it was not alone among Australian grain merchants in finding trading tougher.
"Many of our competitors have reported experiencing similarly difficult conditions," Mr Palmquist said.
The comments come a day after Nidera, the Dutch-based grain trader controlled by Chinese state-owned Cofco, revealed it had bought full control of Queensland-based Pentag Nidera, heralding an expansion drive outside the business's eastern Australian heartland.
Pentag Nidera is also to develop further its niche in sorghum, of which it is Australia's top exporter, at a time when Chinese imports of the feed grain have jumped.
The group also underlined the setbacks to Australia's winter grains crop, currently being harvested, from poor weather blamed on the El Nino.
"Growers in areas of Victoria and southern New South Wales have had to contend with particularly hot and dry conditions in September and October," Mr Palmquist said.
"This will temper grain production forecasts relating to our [2016 financial] year," although he added that it was "too early to make definitive predictions", with some crops still undeveloped enough so as to benefit from rains.
The group said that the average of current estimates suggested an east coast harvest of barley, canola and wheat of 16.1m tonnes, down some 200,000 tonnes year on year.
With rival grain handler CBH Group on Friday forecasting a drop of some 500,000 tonnes to 13m tonnes in the Western Australia harvest, chances would appear to be fading of an increase in output this year.
GrainCorp shares closed down 4.6% at Aus$8.48 in Sydney.