Bunge is holding out for higher soybean prices to improve its second half prospects after a poor first half for the firm’s oilseeds businesses. Brazilian farmers’ reluctance to sell beans at depressed prices hurt the firm’s first half performance, with a bounce in prices since the last week of June since opening the export floodgates.
CBOT prices have bounced sharply since bottoming in the second half of June as concerns that extreme heat is shrivelling US harvest prospects have gripped the market. Futures have broken below their recent range mid-this week, jeapardising the second half outlook after an almost relentless slide in prices since late last year.
“We are optimistic about a much better second half of the year, but some market headwinds will persist. Global trade remains strong, opportunities are emerging from recent weather concerns in North America and farmers in Brazil are proving willing sellers as prices have increase,” said CEO Soren Schroder.
The oil complex meanwhil is continuing to suffer from a second quarter oversupply of product which is overwhelming strong demand for both meal and oil. A “meal surplus” is expected to weigh on Bunge’s crush margins through the end of September, Schroder said.
For detailed analysis of developments in the international vegetable oils markets, contact [email protected]
MS – 2/08/2017