Global grain traders’ profits continue to decline

Big harvests and weak crop markets are squeezing profits and lowering the outlook for some of the world’s top grain traders and equipment makers, including Bunge Global SA and Archer-Daniels-Midland Co.

Bloomberg reports that “bumper harvests around the world are cutting into Bunge Global SA’s profit, while weak crop markets are giving the company ‘limited visibility’ for the rest of the year.”

Bunge Global SA, one of the world’s largest grain traders, posted earnings of $1.73 per share in the second quarter of 2024, the lowest since 2020.

Earnings at Bunge and its peers, including Cargill Inc. and Archer-Daniels-Midland Co., have been weighed down by ample grain supplies, wiping out gains from previous years when crop losses and the onset of a cold snap in Ukraine sent grain prices soaring. Margins from crushing soybeans into meal and oil, a key driver of profits, also fell.

Also, Reuters reports that Archer-Daniels-Midland Co shares fell 2 percent two weeks ago after the company missed stock market expectations for second-quarter profit, which was cut by falling soybean crushing margins and weaker demand for U.S. grains.

The profit decline reflects the challenges facing global grain traders and oilseed crushers, with grain prices at nearly four-year lows due to large global corn and soybean inventories.

Tags: Bunge