World grain supplies remain “very tight”, Bunge said, seeing as “slow” the prospect of Ukraine exports reopening, while flagging the prospect of a “bounce back” in Chinese demand as the country recovers from Covid curbs.

Greg Heckman, the chief executive of US-based Bunge, acknowledged that North America looked poised for a “good” harvest this year, “although kind of under any scenario, corn may end up being a little short of trend on yield”.

For soybeans, “it looks like we’re on the way” to a “good US crop”.

However, many other dynamics looked less positive in terms of enhancing world grain supplies, including the Ukraine export slowdown which Mr Heckman was downbeat on being resolved by Friday’s Kiev-Moscow deal.

‘Big unknown’

“You’ve still got the Ukraine situation hanging over the S&Ds [supply and demand balance] and can we get a sea lane opened to get some of the stocks that are trapped there… into the global markets,” he told investors.

“Under any scenario, we need those in the global market, but I think it will be slow,” he said, contrasting with comments on Tuesday by Juan Luciano, head of Archer Daniels Midland, one of Bunge’s biggest rivals.

“We hope it can get opened up, but there’s damage to the origination, there’s damage in the ports. There’s complexity in insuring those vessels.

“So that’s a big unknown, I think, that’s hanging out there.”

‘China will be back’

Meanwhile, Bunge was expected China, a huge ag commodity importer, to “start to recover” from the Covid outbreak which overshadowed the first half of 2022.

Chinese economic growth in the April-to-June period, at 0.4% year on year, was the second lowest in 30 years, beating only a quarter of contraction at the start of the pandemic.

“It’s hard to imagine a situation where China could look worse than it has,” Mr Heckman told investors.

“We don’t all want to forget that China has been the driver for the last couple of years in demand around the world, and they will be back at some point.”

‘Very tight’

Meanwhile, South American farmers had been slow to release crop, particularly in Argentina where “the producer is really not selling, very reluctant to protect themselves against devaluation”.

Elevated rates of inflation, above 60%, and a devaluing currency, down by one-quarter against the dollar so far this year, are encouraging farmers to hold on to their crop as a dollar-denominated hedge.

“In ag, the physical supply and demand remains very tight globally, and I think that’s what we’re starting to sense.”

‘The one negative…’

Mr Heckman termed as a potential red flag the threat of a fresh spike in prices providing a structural curb in consumption.

“Probably the one negative would be if we did have a crop problem and you’ve got a big run-up in prices, and that destroyed some demand.”

However, for now demand was “very good”, he said, highlighting in the oilseeds sector a strong appetite among livestock producers for soymeal, thanks to its price competitiveness against corn and wheat.

Demand for vegetable oils, as used in making biodiesel as well as the likes of cooking oil, was “very good”.

“We continue to see excellent demand from the fuel side, but the majority of our volume is still going to food,” he said.

Bunge, which claims to be the “largest global oilseed crusher”, was looking at expansion in capacity for processing “softseeds”, such as rapeseed or sunflower seed, as well as the soybeans popular in the US.

The group was “thinking about the future and whether it’s winter canola or what other softseeds to help meet the demand for renewable diesel and biofuels in general, which will continue to grow”.