Farmers suffered with weak soybean basis in 2007, as cash bids fell well below futures at almost all markets. Turns out producers weren't the only ones to feel the pain.
Bunge Ltd., the world's largest oilseed processor, reported Thursday that its quarterly profit dropped 76% due to losses in trading positions tied to hedging. The company's losses on short futures positions weren't offset by traditional gains in basis on its huge inventory of cash soybeans, which failed to keep pace with the board.
Strong fertilizer sales due to the huge increase in corn plantings helped offset the losses.
The company says earnings fell to $14 million, or 5 cents per share, in the first quarter, compared with $58 million, or 48 cents per share, a year earlier, but kept its forecast for full-year earnings of $4.56 to $4.71 a share.