(Recasts, adds background, quote, earnings details, byline)
By Karl Plume
May 1 Harsh U.S. weather and geopolitical
turmoil in Ukraine have humbled a third global grain trader as
Bunge Ltd reported a surprise loss for the first quarter
on Thursday, saying it had bet wrongly on a drop in wheat
The world's biggest agricultural traders, including Archer
Daniels Midland Co and Cargill Inc, were
slammed by a series of exceptional events in the first part of
the year, from a severe winter "polar vortex" in the United
States to the rejection of corn imports in China.
Bunge, which swung to a $27 million loss in the three months
through March 31, cited a 55 percent slump in its trading and
distribution division as the biggest drag, saying that tumult in
Ukraine had upended its strategy.
The company's shares fell 5 percent in midday trading on the
New York Stock Exchange.
"We expected a lower price environment, particularly in
wheat, which did not materialize," Bunge Chief Executive Soren
Schroder said. "Political turmoil in the Black Sea and
deteriorating winter wheat conditions in the U.S. were the
primary catalysts for the wheat rally, which ignored the
more-than-adequate global stocks."
The three companies and Louis Dreyfus Corp -
known as the ABCDs - dominate global grain trading and had been
expected to benefit from bumper harvests just a year after the
worst U.S. drought since the Dust Bowl days.
Instead, they have emerged as some of the most evident
losers from this year's unexpected commodity market volatility,
which has carved a sharp divide across the trading industry.
Chicago wheat prices plunged to a 3-1/2 year low in
January on abundant global stocks before surging some 30 percent
over two months as frigid weather threatened the U.S. crop and
as tensions in Ukraine escalated.
On a per-share basis, Bunge lost 18 cents, missing analysts'
expectations of a $1.40-per-share profit on average. It had
earned a profit of $170 million a year earlier.
Profit in its agribusiness unit, including trading and
distribution, plummeted to $79 million in the quarter.
Earlier this week, ADM reported a 19-percent decline in its
core grain merchandising and handling operations, following
Cargill's 28-percent drop in overall profit early in April.
Bunge's sugar-milling business, which it has been trying to
sell since late in 2013, was hurt by hedging losses and higher
milling costs due to an earlier start to Brazil's milling season
Its sugar and bioenergy segment lost $64 million in the
quarter, after earning a profit of $23 million a year earlier,
while food and ingredients' profit slipped 8 percent to $54
million and fertilizer profit doubled to $6 million.
(Reporting by Karl Plume in Chicago; Editing by Jeffrey Benkoe
and Bernadette Baum)