Bunge's Q3 results showed its agribusiness results driven by strong soybean crushing margins, including $155 million of new mark-to-market gains on forward soy crushing contracts.
Structural soy crush margins were higher in all regions driven by favorable market dynamics and actions taken in the second quarter to deliberately build inventory of Brazilian beans, allowing the company to secure crush margins in Brazil and China at attractive margins. A decrease in industry margins in certain regions resulted in new mark-to-market gains in the quarter of approximately $155 million related to forward soy crushing contracts, which will reverse as we execute on these contracts in the coming quarters.
In grains, higher results in the quarter were primarily driven by Brazil origination, which benefitted from increased farmer selling as local soy prices rose from the combination of currency devaluation and strong export demand. Results in North America origination benefitted from lower logistics costs, which last year were negatively impacted by weather. Results in ocean freight were also higher than last year.
"Bunge produced a strong third quarter, supported by the prudent actions we took in the second quarter to secure crush margins at multi-year highs, positioning the company for a strong second half performance," says Soren Schroder, Bunge's chief executive officer.
