Bunge CEO forecasts strong soy U.S. crush margins into 2015
By Tom Polansek
CHICAGO Oct 30 (Reuters) - Oilseed processors will profit from strong U.S. soybean crushing margins through the beginning of next year, as demand from domestic livestock producers and importers remains strong, the chief executive officer of Bunge Ltd said on Thursday.
U.S. margins will be "well above historical averages and probably the best we've seen in many years" for another six months, despite the arrival of a massive U.S. soybean crop at processors, CEO Soren Schroder said on an earnings call.
"Demand for U.S. crushing capacity is real, and it will stay with us for quite a while," he said.
Bunge, which makes money by trading, transporting and processing crops, reported lower-than-expected third-quarter earnings and revenues due to slow farmer selling and temporary hedging losses.
The outlook for crushing margins is positive for the company, one of the world's largest oilseed processors, and competitors such as Cargill Inc and Archer Daniels Midland Co, which extract soymeal and soyoil from soybeans. ADM is due to report its third-quarter earnings on Nov. 4.
Schroder said on the analyst call that the United States has been the world's cheapest origin for soymeal exports for months. Huge export commitments have pushed up cash soymeal prices and futures this week, with the futures market in October heading for its biggest monthly gains since 2008.
Supplies of soy available for crushing in the United States tightened last month as rains delayed the start of the autumn harvest and inventories from the previous harvest dwindled. Farmers also delayed crop sales because of weak prices.
Strong demand for limited supplies meant that crushing margins in the third quarter were higher year-over-year in most parts of the world, according to Bunge. Continuación...