OMAHA (DTN) -- Bunge on Wednesday reported strong second quarter sales and earnings driven by robust soybean crushing and meal demand, while also highlighting how geopolitical tensions are shifting global exports and creating new demand.

Company officials said geopolitical tensions, shifting trade flows and changing weather patterns "are reshaping farmer behavior, crop availability and increasing volatility."

Bunge announced second-quarter net income in 2026 of $678 million, up from $354 million for the same quarter in 2025. The company also raised its overall earnings outlook for 2026.

Officials highlighted investments at the company's Destrehan, Louisiana, facility, where Bunge is in the final stages of completing a new barge unloader and a new oilseed processing plant that will be able to handle not only soybeans but other crops such as winter canola or CoverCress. Both are expected to be operational in the coming months.

Bunge CEO Greg Heckman said that the company is positioned to take advantage of growth in soy and soft seed oils, which are expected to account for roughly half of global vegetable oil production growth over the next decade as the growth in palm oil production slows.

Discussing U.S. oilseed crushing, Heckman said, "Soy processing margins were very strong in Q2, the best we've seen in a while."

EPA AND RVOs

On the earnings call with analysts, Heckman pointed to clarity around the Renewable Fuel Standard's renewable volume obligations (RVOs), which are supporting domestic demand, while the industry also sees strong global demand for soybean meal. "We feel it's justified, and definitely U.S. and North America (are) leading the global crush," he said.

Asked about possible concerns over an RVO waiver, Bunge officials said they were watching EPA for rulings on small refinery exemptions (SREs) "potentially in the coming days and weeks," but had not heard any serious discussion about broad RVO waivers.

The industry also will be watching for EPA's proposed "Set 3" rule for the Renewable Fuel Standard for 2028-29 that will likely be released after the midterm elections.

WATCHING 45Z RULE

Bunge officials also were asked about expected updates to climate-smart agricultural policies with the release of USDA's Feedstock Carbon Intensity Calculator and the role it could play in finalizing Treasury's 45Z Clean Fuel Production Tax Credit.

Bunge CFO John Heppl said the company has been working with a lot of farmers on cover crops and no-till practice with the expectation that climate-smart ag practices become part of 45Z on a permanent basis. Bunge also has been focused on integrating winter canola as a cover crop, Heppl said.

"We've been testing a number of other novel seeds," Heppl said. "We've been working very closely with farmers, primarily on the seed side, and with overall farming practices ... We believe, long term that's going to make sense economically for the farmer and also, incent the right sort of behavior in terms of, ag practices. So, we're working on it under the assumption that it becomes part of 45Z."

If climate-smart practices aren't integrated into the final tax credit rule, Heppl said Bunge leaders believe winter canola and similar crops still provide opportunities for farmers to market another cash crop.

"We continue to increase acres and have gotten, you know, very positive feedback so far on how things are progressing," Heppl said.

Heckman added Bunge executives "believe strongly enough" in the strategy that they added the ability in the Destrehan plant to crush soft seeds such as canola and other cover crops as well.

Heckman also said Bunge has announced cover crop projects in Brazil tied to Sustainable Aviation Fuel (SAF) expectations.

"So, it's not just a U.S. issue," Heckman said. "As well as the conversations we're having with energy companies in Europe that are definitely interested in us and these cover crops and things, and what they can mean, especially around SAF for the long-term," Heckman said.

BLACK SEA CONFLICT TOP OF MIND

Looking at geopolitics, Heckman said, "The merchandising environment definitely remains challenging" despite ample grain supplies because shipping disruptions continue globally. Heckman pointed to the escalation of the Ukraine war affecting global wheat exports and raising expectations that other countries will have to fill demand that normally would come from the region.

"We've got the Black Sea and the escalation of the conflict there that has added a lot of uncertainty on what's going on with global wheat entities," Heckman said. "So, if you end up limiting probably 25% of global exports coming out of the Black Sea area, we've probably seen the worst conflict there since the beginning of the war. That could really tighten wheat up, especially in the short term, where it has to be serviced from some other origins."

The Black Sea conflict has limited exports of sunflower seed oil out of the region as well, but Heckman said more sunflower oil exports coming out of Argentina are balancing that.

"Going forward right now, the challenges as the Black Sea tightens up again, we'll have to serve that with soy or sun oil out of Argentina to customers," he said.

Heckman also said Bunge is watching to see what kind of commodities China could end up buying with its $17 billion commitment to increase purchases from the United States. "Would they possibly import corn as part of the $17 billion board of trade commitments? It's not clear what commodities are going to be there."

SOUTH AMERICAN CROPS

Asked about fertilizer concerns going into South America's planting season, Heckman said there are some issues over the potential lack of fertilizer access, or high costs.

"The coming season is going to be the key one to watch here," he said.

Heckman added, "The concern overall now isn't nitrogen, which has kind of corrected itself, on prices. It's a little bit more around phosphates. So that's the one we'll be watching closely in Argentina."

Heckman suggested farmers in South America could back off their phosphate applications if prices don't come down. "If it persists, they may not make that investment. So, you'd want to watch yields closely there."

Analysts are watching the risks that a potential super El Nino could play on South American production. Heckman said everyone will be closely watching how the El Nino could affect the timing of Brazil's soybean planting season and the ripple effect that would cause on the country's second-season safrinha corn crop.

"If you end up getting delayed planting, it could affect safrinha, and then where are fertilizer prices at that point and does that affect the investment that the farmers make and does that affect yields?" he said.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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