Global agribusiness Bunge has cut its 2017 profit forecast after reporting a 34% decrease in quarterly earnings, but the firm’s CEO believes the rebounding grain market would bring it back to the green.

CEO Soren Schroeder said the company had planned cost cuts that should help improve performance, Reuters reported on 2 August.

Bunge – along with its rivals Archer Daniels Midland, Cargill and Louis Dreyfus – had been struggling with an oversupply of grains after several years of bumper crops worldwide, which had driven them to diversify and invest in higher-margin businesses, such as food ingredients.

According to Reuters, Cargill’s restructuring had already increased its earnings, but Bunge was still trying to manage its heavy South American presence, which had dragged down its profits.

In mid-July, Bunge announced a US$250M competitiveness programme, which would adopt a zero-based budgeting process, streamline its operations and cut capital expenditure spending.

Schroeder also told Reuters that selling the company was not off the table, although Bunge rejected an informal merger offer from Glencore in May.

Instead, he was counting on a turnaround in the global agri commodities market as corn supplies are forecast to drop by up to 12% by the end of the 2018 season and soyabean stocks were projected to come down 1.3%, according to the latest United States Department of Agriculture data.

"Global corn stocks, while ample, are going down. Wheat stocks are going down. Soyabean stocks, depending on how the US crop comes out, probably have peaked," Schroder said in an interview with Reuters.

However, some analysts were not quite so optimistic, considering this year’s record corn and soyabean crops in Brazil and the projected soyabean bumper crop in the USA.

"That's been a common refrain for the last several quarters among agribusiness companies yet we continue to see downward earnings revisions," said Farha Aslam, analyst with Stephens Inc.