Bunge Q1 Results Reflect Upbeat Grain Market Forces

Bunge unveiled its earnings ahead of schedule revealing a strong recovery in the first quarter of 2015 with earnings of $263 million compared to a loss of $13 million for the same quarter in 2014. Company chief executive, Soren Schroder, noted improved profitability in all of the groups four divisions and a positive, upbeat outlook for the balance of 2015 for its agribusiness division, which accounts for 75% of the company’s revenues.

Oilseed results were notably strong in North America for the quarter because of high global demand, high volumes, and high crush margins. In Mexico, Bunge achieved beneficial synergies through the integration of mills it bought from Altex last year, and also recovered from the foreign exchange losses, which hit the business in the fourth quarter of 2014.

In Brazil, grain origination has picked up and processing results were strong, as the decline in the real raised the value of dollar-denominated crops, while the group’s Brazilian sugar and bioenergy business returned to profitability as its ‘sugar cane crop is developing well.’

In South America, processing margins are forecast to remain strong through September on abundant crop supplies, and a bulk portion of crops in Argentina and Brazil remain to be sold, indicating solid marketing opportunities in the coming quarters.

As supplies from the 2014 harvest run down in the EU and North America, northern hemisphere farmers are expected to plant large crops this season, which will maintain processing capacity and exports for the remainder of 2015.

And in China, livestock margins have improved, giving support to healthy crush margins, leading Bunge to commit to a positive forecast for the market for the rest of the year.