Bunge Limited Q3 2014 Earnings Conference Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ann Duignan - JPMorgan - Analyst : Hi, guys, it's Ann.

Question: Ann Duignan - JPMorgan - Analyst : Can you talk a little bit about the comments you made about the US crush margins being particularly strong? I don't think any of us really expect those to be sustained at current levels, given it's probably driven by the lack of supply. Can you also talk about the impact of the record harvest, and whenever it is harvested, the capacity issues with rail and how you're getting around all of that? So two questions on the US, please.

Question: Ann Duignan - JPMorgan - Analyst : As a follow-up, do you think that the rail car capacity issue is a bigger risk to the industry than the lack of barge capacity down the Mississippi? I'm just curious as to which one you're more worried about.

Question: Ann Duignan - JPMorgan - Analyst : Okay. As a quick follow-up on Brazil, can you talk about post-elections, you made mention of what might happen on the sugar and bioenergy side, but just in general where you think the pluses and minuses are now that we are post the election in Brazil?

Question: Ann Duignan - JPMorgan - Analyst : Okay. But they didn't do that in the last regime, so what's the probability of them doing it now?

Question: Ann Duignan - JPMorgan - Analyst : Okay. Thank you for the color. I'll get back in line. I appreciate it.

Question: Adam Samuelson - Goldman Sachs - Analyst : Yes, thanks. Good morning, everyone. First in agribusiness and a little bit on some of the challenges in the quarter and how the expectations for recovery in 4Q. I think, going back to last quarter, there was an expectation for some strong volume growth in the second half. Agribusiness actually ended up down year-over-year and just wondering how did that shape up or relative to your own expectations and the key areas? Was it just Brazil and Argentinian exports, or was it crush volumes and how sharp of a rebound are you expecting in the fourth quarter?

Question: Adam Samuelson - Goldman Sachs - Analyst : Okay. That's helpful.

Question: Adam Samuelson - Goldman Sachs - Analyst : Is that a situation that could actually, you could see some of that move into the first quarter at this point, given how late it has shaped up to be?

Question: Adam Samuelson - Goldman Sachs - Analyst : Okay. That's helpful. Thinking about in sugar, I know the election has probably put some people's strategic thinking on the sector on hold, given some of the policy uncertainties, but it's been nearly a year now that the strategic review has been ongoing. Can you help frame for us the range of options that are being contemplated? Is it a mill by mill review or selling or JVing part of the business or the entire -- is there still opportunity to sell the entire portfolio as one piece? Help frame for us the range of the likelihood of different options.

Question: Adam Samuelson - Goldman Sachs - Analyst : On that point, as we think about timing, it's been a year. How long can we really contemplate this business being under strategic review before you make the decision, look, we can't find a party to extract a value that we are happy with and then you recommit to running the business as part of Bunge and driving organic improvements that way?

Question: Adam Samuelson - Goldman Sachs - Analyst : I'll get back in queue. Thanks very much.

Question: David Driscoll - Citi Research - Analyst : Good morning. This is Cornell Burnette with a few questions for David.

Question: David Driscoll - Citi Research - Analyst : Sugar ethanol still seems to be the outlook for about breakeven profitability this year. Wondering about going forward, can this business become profitable? It seems right now, ethanol prices in Brazil are still pretty weak and at the same time, Brazilian ethanol seems uncompetitive relative to US corn ethanol on the global markets. So in that context, does it come down to, as you mentioned earlier, the blend rate moving to 27.5%? Is that what we really need to turn things positive in terms of profitability for you in the industry as we move into 2015?

Question: David Driscoll - Citi Research - Analyst : Okay, great. Turning it back to agribusiness and particularly soy crushing, I think it's pretty evident that the fourth quarter is going to be great and same with the first quarter in terms of margins. But talk a little bit more about some of the more meaningful, longer-term dynamics. When we turn over from that US crop and move into South America in the middle of next year, can you talk about what you're seeing generally in the market in terms of demand from the livestock sector and how you expect that to trend throughout 2015 and what that means for the margins for the whole year and not just looking at North America early in the year?

Question: David Driscoll - Citi Research - Analyst : Okay, great. Thanks for the color.

Question: Tim Tiberio - Miller Tabak - Analyst : Good morning. Thanks for taking my question. Drew, you seem like you're pretty confident that you can recover the $60 million in the fourth quarter. I just thought it may be helpful to give us some sense of the band of price movement that would be needed in REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. the physical markets in soy mill or underlying soybean cost basis in the fourth quarter. Or is this, as such, that you basically have locked this in and regardless of whether we see a 5% or 10% move in the physical markets, you'll still be able to recover.

Question: Tim Tiberio - Miller Tabak - Analyst : Thanks. That's very helpful. Soren, you mentioned that you're open now to a full range of optionality around the strategic review with the sugar assets. Does that imply that you would also, in the right situation, even be open to looking at scaling the business even further if there's an opportunity to take advantage of distressed assets or am I reading that incorrectly?

Question: Tim Tiberio - Miller Tabak - Analyst : Okay. One last question. In the third quarter was the bio diesel trends much of an impact on the oilseed margins? Bio diesel margins have not been as positive, at least in the US, as last year. Is that a meaningful impact to your business currently?

Question: Tim Tiberio - Miller Tabak - Analyst : Great. Thanks for your time.

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Good morning, everyone. My first question is, what would be the case to which 2015 agribusiness would not be at a record level?

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Why wouldn't it be at record levels in 2015?

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Okay. Can you talk about the cadence to which the farmers are selling in the US and then in South America, because it seems like actually if the cadence works out to what I think it is, this could actually be optimal for Bunge's operating profit for fourth quarter, first quarter and then second quarter. Can you talk about the cadence?

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Yes, because it seems like the US farmer was going to start selling, the South American farmer's holding, but that will sell in the first quarter so your facilities in the US will be nicely optimized in the fourth quarter. Then as things keep on going, you're going to layer on the South American farmer selling and it seems like you're set up for a lot of good quarters. Am I missing something in the way to which the farmers are going to be selling?

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Okay. My next question is, are you by any chance caught short at all on the soybean meal side? Because obviously soybean meal prices have gone hyperbolic. You have not sold forward and not been able to make that commitment? We're not expecting any issues in the next quarter or something related to the soybean meal movement, are we?

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Okay. My very final question is, in terms of the outlook for vegetable oil, soybean oil, can you talk about the likelihood of the dollar bio diesel tax credit and the higher bio diesel mandate and does that create a catalyst or an opportunity for vegetable oil prices to move higher or is it a non-issue? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Kenneth Zaslow - BMO Capital Markets - Analyst : Great. Thank you very much.

Question: Robert Moskow - Credit Suisse - Analyst : Hi. I think I'm going to try to take a shot at answering Ken Zaslow's first question. The thing you mentioned about farmers not selling in Brazil, we've all been there before. What are the chances that that might continue outside of first quarter, into second quarter and into third quarter. Certainly, that's happened before. Is there any additional pressure on Brazilian farmers or even US farmers too that there hasn't been in the past so that that's not going to happen, so they do have to sell and we won't have repeats that we've had in prior years?

Question: Robert Moskow - Credit Suisse - Analyst : But if they hold back on selling because they think they can get a higher price and higher than the price that's in the market today, isn't that the issue, that they have the balance sheet to hold back?

Question: Robert Moskow - Credit Suisse - Analyst : Okay. Thank you very much.

Question: Diane Geissler - CLSA - Analyst : Good morning.

Question: Diane Geissler - CLSA - Analyst : I wanted to ask about the food ingredients segment, which seems to be a target for you to build over the coming years. To the extent that that may include some M&A activity on downstream businesses, what impact if any, a lack of monetization on the sugar business might have on that strategy here in the near-term? If you could give a little bit more color about how you expect to build that business, that would be great. Thanks.

Question: Diane Geissler - CLSA - Analyst : Okay. To the extent that you hang on to sugar, due to lack of finding a buyer for it, how does that affect the percentages in terms of the size of that business versus the overall portfolio?

Question: Diane Geissler - CLSA - Analyst : Okay. All right. Thank you.