Prepared remarks
Good day, and welcome to the Bunge Global Second Quarter 2026 Earnings Release and Conference Call. Please note, this event is being recorded. I'd now like to turn the conference over to Mark Haden, Investor Relations. Please go ahead.
Great. Thank you. And thank you all for joining us this morning for our second quarter 2026 earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found at the Investor Center on our website at bunge.com under Events and Presentations. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measure are posted on our website as well. I'd like to direct you to Slide 2 and remind you that today's presentation includes forward-looking statements that reflect Bunge's current view with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review these factors. On the call this morning are Greg Heckman, Bunge's Chief Executive Officer; and John Neppl, Chief Financial Officer. I'll now turn the call over to Greg.
Thank you, Mark, and good morning, everyone. I want to start by thanking the team for their focus and disciplined execution in what continues to be a highly dynamic operating environment. Across the organization, our people are working together to navigate uncertainty and capture opportunities for our customers and for Bunge, and we delivered another strong quarter. We've talked about the diversification that our larger global platform provides us across crops and geographies. We saw the benefit of that diversification this quarter, particularly in soy and softseed processing. John will go into some more detail on our results in a moment. The broader operating environment continues to evolve. Geopolitical tensions, shifting trade flows and changing weather patterns across key growing regions are reshaping farmer behavior, crop availability and increasing volatility. As a result, customers at both ends of the value chain are relying on us more than ever to help them navigate risk. This is not new territory for us. We have a long track record of managing market volatility and continuing to deliver for our stakeholders, all while growing our earnings. We can say with confidence that Bunge's business is built for complexity and change. Our integrated global platform, disciplined risk management and operational excellence are designed to keep supply moving to meet demand and serve our customers regardless of how conditions shift. This is what allows us to perform through the cycle. Turning to our outlook. Based on what we can see today, we now expect full year 2026 adjusted EPS in the range of $9.25 to $9.75, which is up from our previous range of $9 to $9.50 we provided on our first quarter call. While forward visibility remains limited given the current macroeconomic and geopolitical environment, the drivers of long-term demand remain strong. And with our global footprint and diversified value chains, we're confident in our ability to execute in any environment. And with that, I'll turn it over to John for a deeper look at our financials and outlook.
Thanks, Greg, and good morning, everyone. Let's turn to the earnings highlights on Slide 5. Our reported second quarter earnings per share was $3.47 compared to $2.61 in the second quarter of 2025. Our reported results included a favorable mark-to-market timing difference of $1.67 per share and an unfavorable impact of $0.20 per share related to Viterra transaction and integration costs. Adjusted EPS was $2 in the second quarter versus $1.31 in the prior year. Adjusted segment earnings before interest and taxes or EBIT was $796 million in the quarter versus $373 million last year. In the Soybean Processing and Refining segment, higher results were primarily driven by the North and South American value chains. In North America, stronger processing performance in the U.S. was partially offset by lower refining results. In South America, higher results reflected improvements in Argentina processing and refining, and Brazil processing. Within the destination value chain, stronger processing results in Asia more than offset lower processing results in Europe and a lower distribution performance. Results from global soybean oil merchandising activities were lower than last year. Processing volumes increased in both South and North America as well as in Europe, with the largest increase driven by the company's greater production capacity in Argentina. Higher merchandise volumes reflected the combined company's expanded soybean origination footprint. In Softseed Processing and Refining segment, results increased across all regions, reflecting a more favorable market environment and strong execution. In North America and Argentina, stronger processing results were the primary drivers of the improved performance, while refining results were modestly higher in both regions. In Europe, stronger processing results more than offset lower refining and biodiesel performance. Results from global softseed oils merchandising activities were slightly higher than last year. Higher softseed process volumes primarily reflected the combined company's increased production capacity in Argentina, Canada and Europe. And higher merchandise volumes were driven by the company's expanding global softseeds origination footprint. For the Tropical Oils and Specialty Ingredients segment, higher results in Europe and Asia were partially offset by lower results in North America. Results from global tropical oils merchandising activities were slightly higher than last year. In the Grain Merchandising and Milling segment, higher results in ocean freight, commercial services, global cotton and wheat milling were partially offset by lower results in global grain merchandising and sugar. Higher volumes primarily reflected the company's expanded grain handling footprint and capabilities. Prior year results included corn milling, which was divested in 2025. The increase in Corporate expenses was primarily driven by the addition of Viterra. The year-over-year comparison was also impacted by timing of performance-based compensation. Higher other results were largely related to our captive insurance program and Bunge Ventures. Net interest expense of $154 million was up in the quarter compared to last year, reflecting our expanded footprint and merchandising activities with the addition of Viterra, partially offset by lower average net interest rates. Let's turn to Slide 6, which shows our adjusted EPS and EBIT trends over the past 4 years and the trailing 12 months. After a challenging 2025, the trend is beginning to reverse, reflecting improved market conditions and the early benefits of synergy capture from our combination with Viterra. Slide 7 details our capital allocation. Year-to-date, we generated approximately $1.3 billion of adjusted funds from operations. After allocating $238 million to Sustaining CapEx, which includes maintenance, environmental health and safety, we had approximately $1.1 billion of discretionary cash flow available. We paid $275 million in dividends to shareholders, invested $541 million in growth and productivity-related CapEx, invested $105 million in the first quarter to acquire IFF's soybean processing concentrate business and repurchased approximately $250 million in Bunge shares, completing the $2 billion commitment related to the Viterra transaction. This resulted in a net use of $117 million. Moving to Slide 8. At quarter end, net debt exceeded readily marketable inventory, or RMI, by $1 billion. Our adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA, was 1.9x at the end of the second quarter. Slide 9 highlights our liquidity position, which remains strong. At the end of the second quarter, we had committed credit facilities of approximately $9.7 billion, of which approximately $8.8 billion was unused and available. We also had approximately $2.4 billion of our $3 billion commercial paper program available, providing ample liquidity to manage our ongoing needs. Please turn to Slide 10. For the trailing 12 months, adjusted ROIC was 8.4% and ROIC was 6.8%, both exceeding their respective cost of capital. Adjusted for construction in progress on our large multiyear projects and excess cash on our balance sheet, our adjusted ROIC would increase to 9.3% and ROIC to 7.2%. Moving to Slide 11. For the trailing 12 months, we produced discretionary cash flow of approximately $1.7 billion and a cash return on equity of 10.8% compared to our cost of equity of 7.2%. Please turn to Slide 12 on our 2026 outlook. Taking into account Q2 results, the current margin and macro environment and forward curves, we now expect full year 2026 adjusted EPS in the range of $9.25 to $9.75, which is up from our previous range of $9 to $9.50. As Greg mentioned in his remarks, the environment remains complex with significant uncertainty in certain regions, particularly in the fourth quarter. For the full year compared to our previous outlook, Soybean Processing and Refining segment results are forecasted to be higher. Softseed Processing and Refining segment results are forecasted to be slightly higher. Tropical Oils and Specialty Ingredients results are forecasted to be unchanged. Grain Merchandising and Milling segment results are forecasted to be lower, and Corporate and Other results are expected to be unchanged. Additionally, we continue to expect for 2026 an adjusted annual effective tax rate in the range of 22% to 26%, net interest expense in the range of $620 million to $660 million, capital expenditures in the range of $1.5 billion to $1.7 billion, and depreciation and amortization of approximately $975 million, all unchanged from our previous outlook. With that, I'll turn things back over to Greg for some closing comments.
Thanks, John. Before turning to Q&A, I want to offer a few closing thoughts. The strategy and priorities we outlined earlier this year at Investor Day hold true today. And our second quarter results are another proof point that we're delivering on our commitments. I spoke earlier about the benefits of our diversification. That breadth provides greater balance and resilience across a range of market environments and gives us the capabilities to perform through the cycle. At the same time, we're advancing our key initiatives. Viterra cost synergies continue to run ahead of plan, and we're making tangible progress on the network and commercial opportunities we identified. And as John mentioned, we completed our $2 billion share repurchase program related to the Viterra transaction. Our in-flight capital projects remain on track. At our Destrehan, Louisiana facility, we're in the final stages of bringing two meaningful investments online, a new barge unloader and a new multi-seed processing plant, both of which we expect to be operational in the coming months. We're also advancing strategic partnerships to expand our relationships in renewable fuels. In Brazil, we recently signed a supply agreement with Acelen, Mubadala's renewable energy company to provide certified soybean oil feedstock for production of SAF and renewable diesel. We also entered into a partnership with Petrobras and Vibra to supply certified Low-LUC CORSIA Brazil feedstock for the production and commercialization of SAF. These agreements strengthen our position as a trusted supplier of sustainable feedstocks and further deepen our participation in the growing renewable fuels value chain. Zooming out, the long-term demand drivers for our business remain strong. Population growth and rising incomes are driving sustained demand for grain and oilseed products. Feedstock demand across our global processing network is also benefiting from the constructive RVO in the U.S., along with growing biodiesel blend rates in other countries. Soy and softseed oils are expected to contribute approximately one-half of global vegetable oil production growth over the next decade, and that's a meaningful shift as palm supply growth slows. These are durable multiyear tailwinds that reinforce our confidence in the earnings power of this business and our trajectory. The in-flight projects we're bringing online, the integration work underway and the network and commercial synergies we continue to identify are all additive to a business that already has strong structural demand pulling through it. Our fundamentals are strong. Our strategy continues to deliver, and we have the most talented people in the industry. As we look ahead, we remain focused on what matters, serving our customers and delivering value for our stakeholders across food, feed and fuel. And with that, we'll turn to Q&A.
Questions and answers
And today's first question comes from Andrew Strelzik with BMO.
Greg, you mentioned in the press release and in the prepared remarks that the expanded global platform is doing exactly what it was designed to do. Can you elaborate on how the Viterra assets are benefiting Bunge in this environment versus if you didn't have those assets? Any examples you can share would be helpful.
Okay. Thanks, Andrew. Yes, I'd say it starts with the footprint. The balance in all of the key origins and all of the key destinations, and touching more farmers directly than anyone else for origination is key. And of course, it's the talented team that we've brought together that is operating that footprint and dealing directly with our customers. If you think about the information network we have now assembled to be able to make decisions as well as to execute the purchases and sales, whether we're helping our farmers get to market or we're helping our end consumers get to market or solving the physical supply challenges in the value chain, we now have more internal liquidity and more optionality to solve those problems than we had before. Whether that's originating for ourselves into our processing or originating for our distribution business and distributing to others, domestically or for export. Adding Argentina to our soy operations gave us the global balance we were missing before in our soy crushing operations. On softseeds, we've added Argentine sunflower crushing to balance Europe. With some of the challenges we've seen in Europe in the last year, we've really seen the benefit of that, as well as the increased origination and merchandising we have around the softseeds now. And then, of course, the ocean freight fleet: we basically doubled our flows. In times of disruption, the ability to react and continue to get the origination to the right demand is critical. The other example looking forward is that as China and Australia continue to improve their relationships, you may see more Australian canola move into China. We now have the capability to ensure the Canadian canola that was going there can then work through our processing. We're balancing and able to continue to serve our customers and benefit different parts of our platform.
And maybe, Andrew, I'll just add there quickly. The other benefit is with a stronger credit profile of the combined company, we're borrowing money now at the tightest credit spreads we have in the history of Bunge, which gives us a bit of an edge in the marketplace, just given the market generally trades on average interest cost. To the extent we can borrow money cheaper and access that liquidity, it gives us a chance to stay in there and do more business than maybe some of our competitors.
Right. Okay. That's super helpful. And just the second question, I think at least in our conversations with investors, people are kind of struggling with the U.S. crush curve we see today, what's justified by fundamentals versus elevated energy markets. Do you think underlying fundamentals support the current margin structure, excluding the higher energy prices? Or how are you thinking about where the curve is today versus fundamentals and maybe where we would be in a more steady-state environment?
Yes. The answer is yes. We definitely do see underlying fundamentals supporting the current margin structure. We have clarity around the RVO. We're seeing that the crush capacity that has been added is here to meet that demand, and we continue to see strong meal demand globally and strong corn demand, which tells us the underlying feed demand is there for the economics on animal protein. So yes, we feel the margins are justified and North America is leading the global crush.
I would add that the elevated U.S. crush margins and the energy phenomenon affect crush margins globally. With higher crush rates in North America, crush margins in North America are exacerbated a bit by volatility in energy. But ultimately, when you look at demand, as Greg pointed out, we have very strong underlying fundamentals.
And the next question comes from Steven Haynes with Morgan Stanley.
I wanted to ask just on the crush outlook also, in maybe parts. When you're putting the guide together just generally and you're using the curves, is there — are you using the curve as of yesterday? Or what date or time period are you kind of marking for the current period? And then secondly, I think LatAm margins have kind of come down significantly over the last month or so. So what have you assumed on that side of it as well?
I can start, Greg. We use as current information as we get. Obviously, this morning, we couldn't refresh mid-call, but it's fairly current. The outlook we have today largely reflects the curves as of today. We start looking at it a few weeks ahead of time and constantly update our forecast. We take a hard look heading into the call and try to get as current information as we can. So we feel like it largely reflects how we feel versus when we put the forecast together internally.
Where you can see board crush in some markets, we still have to use judgment in the physical crush and cash. It does take some judgment, but we are as current as we can be, and it feels like it's in the right place right now.
Got it. Okay. And then maybe as a separate follow-up on Glencore, the lockup period has passed. How are you all thinking about how that situation may evolve in the coming weeks, months or however long it may take to play out in one way or another?
Glencore has been a great partner. They liked having equity in this deal because they understand the commercial synergies of the combination, and they know it takes time to mine those and capture the value, and they want to be part of that value creation. John and I talk to them often on a number of issues, and their stance is that they're in no hurry and they won't surprise us. They're great partners.
And the next question is from Manav Gupta of UBS.
I am going to take you back to Slide 30 of your Analyst Day. I understand it might not be open. But both my questions relate to that. You obviously gave us a very good update on Destrehan. Can you also give us an update on the remaining three projects, which you have indicated could add about $1.30 to 2030 EPS? And my second quick follow-up question, which is again on this slide, is at the time of the Analyst Day you had identified cost synergies, and network and commercial synergies, but there was a bar on top which said upside potential of Viterra synergies. If you could talk about that also.
I'll start with the projects. In Destrehan, we have two projects underway. One is the crush plant that sits in the JV with Chevron and we expect it to be online at the end of Q3, give or take a few weeks. The other is our barge unloader and loadout capability in the terminal that we've expanded; that should be up and running in August, hopefully. Another big U.S. project is our Morristown SPC plant, which is now running, although not yet at full scale. It takes time for commissioning and customer qualification, but we are producing product. Down in Avondale, in the Gulf, we expanded our refined tropical oils platform there, and that's going to be up and running in the next month or so. Our other big project is Westhaven, the large specialty and refined plant in the Netherlands. That one is still slated for the end of Q1 of 2027. So things are really coming online now. Over the next few quarters, we'll start to see the benefits, and Westhaven will come into meaningful operation in 2027. From a cost synergy standpoint, I'll focus on the cost side and Greg can comment on the commercial side. On the cost synergies, we're happy with progress. As you may recall, we increased our cost target from $250 million to $350 million, and we're continuing to push hard on areas of opportunity. We're going to try to get it done sooner if possible. We feel good about the timing and progress and we'll keep you updated.
When you think about the upside synergies, some of it is about giving teams time to get repetition running the system together through a season as we optimize the combined network and run the right assets at the right times. It's also about growing with customers strategically, growing our direct origination with farmer customers, and growing our direct distribution with consuming customers. Being able to bring corn to customers where we had the majority of their meal business but didn't have the same corn origination footprint before allows different conversations because we now have a complete portfolio of grains, oilseeds, oils, wheat, barley, durum and softseeds to serve customers' needs. We're having more strategic conversations with customers and are really able to grow those relationships. Long term, we see the benefit of that.
And the next question comes from Derrick Whitfield with Texas Capital.
I want to start first on the policy side regarding expected Climate-Smart Agriculture updates within 45Z policy. How are you viewing the impact it can have on your U.S. business? Meaning with the right incentives in place, could you see a meaningful shift in cover crop and fertilizer practices?
I'll take that and Greg can jump in. We've been working with a lot of producers hoping that Climate-Smart Agriculture practices become part of 45Z on a permanent basis. We focused on winter canola as a cover crop and have been testing a number of other novel seeds. We've been working closely with farmers primarily on the seed side and with overall farming practices. We believe long term that will make economic sense for farmers and incentivize the right farming practices. We're working on the assumption it becomes part of 45Z, and even if it doesn't, much of what we're doing still makes sense, especially providing farmers alternatives for another cash crop. We're excited about the feedback we've received. We continue to increase acres and have gotten very positive feedback so far on how things are progressing.
I would add that we believe in this sufficiently that the crush plant we're adding in Destrehan has the ability to handle softseed; it's a switch plant which also allows it to handle other cover crops. We announced two projects in Brazil as well. It's not just a U.S. issue. We're having conversations with energy companies in Europe that are interested in these cover crops and what they can mean, especially around SAF for the long term.
Great. And then maybe shifting to the geopolitical environment. Are you seeing any early impacts due to the lack of fertilizer access in South America?
A little, but I think the coming season will be the key one to watch for the Brazilian farmer. They've had good application rates in the past, but it could have some impact next year on Safrinha. We want to watch that closely. Australia has already shifted some acres from wheat to canola. The current concern overall is less about nitrogen, which has recovered on price, and more about phosphates. That's the one we'll be watching closely. In Argentina, if it persists long term, farmers may not make the investment, and you would want to watch yields closely there.
The next question comes from Tom Palmer with JPMorgan.
I wanted to maybe start with an update just on your visibility for the second half and how it influenced your guidance. As discussed earlier, you typically guide based on curves. I think previously, you had discussed a rough second half split of kind of 45% in Q3, 55% in Q4. Is this still a reasonable outlook? And then could you frame how much visibility you have looking out in terms of different regions of the world on the crush curve?
I can start with the mix and then turn it over to Greg for the crush curve outlook globally. Right now, we've shifted a little. We look at low 40s and high 50s in terms of the breakdown between Q3 and Q4. So not a significant shift, but a small one: low 40s for Q3 and high 50s for Q4 is how we're looking at the breakout.
If you look at soy since the Q1 forecast, the second half margins are definitely up in the U.S.; that's the big driver. Argentina is up slightly but facing somewhat higher energy costs. Europe and Asia are largely unchanged, and Brazil is a little lower, partly because of strong bean exports and the B16 delay; farmers were big sellers early and selling slowed down. Demand remains good overall but very spot, which is the uncertainty with ongoing conflicts. The U.S. refined oil demand continues to improve, and the RVO clarity has helped. So the balance of 2026 is above baseline margins but primarily driven by the U.S. In softseed, our second half margin assumptions are roughly the same. Nearby spots rallied around geopolitical risk, but some capacity had already been committed late. The average curves for 2026 will be well above baseline, driven by Canada supported by the RVO and good seed supply, and Argentina addressing tight sunflower supply in Europe and the Black Sea. Another watch in softseed is canola exports: if Australia shifts more canola into China, that could change crush economics in Canada. Those are the big drivers for the second half.
Understood. I also wanted to ask on the merchandising side and some of the weakness that you're seeing. Are there particular regions causing constraints? If you look at export volumes out of the U.S., they do seem robust, especially on the corn side.
The merchandising environment remains challenging; there's still ample grain supplies and a pretty balanced supply and demand. We do expect some improvement in Q4. Right now, the key flag we're watching is the Black Sea. Escalation in the conflict there has added uncertainty to global wheat supply and demand. If exports are limited from that region, which accounts for a significant share of global exports, that could tighten wheat in the short term and shift demand to other origins, changing dynamics across markets. We're also watching whether China might import corn as part of trade commitments; it's not clear what commodities would be included. Those are key flags for the merchant business.
Tom, I'd add that we do expect sequential improvement in Q3 and then a pretty good increase in performance expectations in Q4, since Q4 is a big quarter for us in that business. With global volatility, that segment could benefit depending on what happens. We expect things to get better and global demand remains good, so we need to be prepared to act when the opportunities arise.
And the next question comes from Pooran Sharma with Stephens Inc.
Just wanted to understand some of the performance in softseed and see how sustainable that is. You mentioned improved performance across every region. It exceeded our expectations. I want to get a sense of how much is reflected in favorable margins versus improved execution and utilization? How much of that is sustainable as you move into 2027?
That's an area where Viterra brought a lot in origination as well as processing and gave us much more balance. Our softseed footprint is now much more balanced globally, similar to what happened in soy once we added Argentina. The way those value chains are working together from origination through processing has been effective. When we've seen challenges like a tight sunflower crop in the Black Sea, we're able to supply customers out of Argentina to balance that. Going forward, as the Black Sea tightens, we'll serve that demand with soy or sunflower oil out of Argentina and continue watching customer developments. Palm tightening has also been supportive to soft oils, and the RVO has been supportive as well. The oil dynamic has been a big driver for softseeds and that will be durable.
Okay. And I wanted to focus on Argentina. You mentioned increased capacity and improved year-over-year performance. How should we expect performance in this region as we look ahead? There was a delayed harvest and some farmer selling into early second quarter. As the crop becomes more available, how should we think about utilizations and margins in Argentina through the back half of this year? And how does that impact other regions across your footprint?
The farmer selling has been good and part of that is a more stable economy overall. Farmer behavior in Argentina is starting to look more like the rest of the world; they had a large harvest and behaved as expected. We don't expect the 2027 export tariff reduction to influence 2026 selling beyond normal seasonal slowdown. We expect 2027 to normalize in how Argentina operates. How we run Argentina will balance with the rest of our system; we'll let the market call given the good demand we continue to see. Meal demand continues to surprise positively quarter after quarter. Renova, having the largest and lowest cost operating plant globally, will run in Argentina hard and balance with our global system.
And the next question comes from Heather Jones with Heather Jones Research.
I wanted to start on the soy processing business. I was trying to reconcile your performance with industry margins. I was calculating EBIT per ton similar to what we saw in Q3 last year, but my estimate shows industry margins were substantially higher than what they'd imply. I wondered if you had heavy hedges on crush and refining or if you could provide additional color to help us understand.
Heather, our best margins in soy processing over the last six quarters have been in this quarter, Q2. Globally, overall soy processing margins were very strong in Q2 and the best we've seen in a while. Part of what could be affecting your consolidation is volume mix. The segment includes merchandising of soybeans we originate in Brazil that can fluctuate dramatically quarter-to-quarter. In Q2, we saw a significant increase in volume sequentially from Q1 and versus a year ago on the merchandising side; we originated a significant amount of soybeans out of Brazil this quarter that will either be crushed or sold to third parties. That volume is included in our overall volume numbers and could impact your analysis.
Okay. All right. I'll follow up offline. Second question: there have been many headlines around a potential Super El Niño. It seems the probability continues to grow. If we look at historical events, just walk us through how you would size up the impact for Bunge across your footprint on oilseeds and merchandising if it turns out to be a major event.
Overall, with the balanced footprint we've built, a disruption that is a supply shock or sustained demand growth is where the optionality in our physical flows and asset base matters. That is beneficial compared with the episodic volatility from conflicts like those in the Black Sea and Middle East, which can be negative to volumes and margins and create challenges for end users. If this were a major El Niño-type event, Australia would be near-term most exposed; we've already seen some farmers shift from wheat to canola and barley, and we handle all of those crops. Brazil's planting timing could be affected; delayed planting could impact Safrinha and, combined with fertilizer pricing, could affect yields. Medium term, a strong El Niño could impact palm production in Malaysia and Indonesia, tightening palm and increasing demand for soft oils, which would be positive for us. India may increase vegetable oil imports. In most scenarios, Argentina looks like a relative winner, and our strong footprint there in processing, origination and marketing positions us well if that plays out.
And the next question comes from Matthew Blair with TPH.
There seems to be concern in the market about a potential RVO waiver in the U.S. just in light of high retail gasoline prices. That seems unlikely to us, but what's your thinking here and how much is that a risk?
We don't have any special insight that there will be any dramatic waivers. We're watching SREs expected to come out with some definitions and rulings potentially in the coming days or weeks; that's the first watch for us. The Set 3 biofuel policy for 2028-2029 is starting to be developed; we expect a first look sometime after the elections in the fall with plans to finalize midyear next year. In terms of waivers, nothing we're aware of at this point.
Sounds good. And congrats on finishing your share buyback program. I know the original plan this year was $250 million of share repurchases, but you've also raised your earnings outlook twice now. Should we expect any additional share repurchases in the back half of the year given the guidance raises?
We'll evaluate that. Our first priority in this market, given dynamics we see, is that we're likely to deploy more cash into working capital through the back half of the year, given prices and global dynamics. We want to ensure our credit rating and leverage ratio are where we want them; we're not concerned about the rating itself but focus on leverage. We remain committed to our long-term cash allocation framework of allocating 50% of discretionary cash flow to shareholders via dividends or repurchases. Timing is hard to predict, but additional repurchases are possible.
And the next question comes from Ben Theurer of Barclays.
John, a lot has been covered here. I wanted a quick one: we haven't talked much about your Tropical Oils and your Grain Merchandising business yet. Could you dig a little deeper on what's driving current conditions there and what the pain points are? And then a quick follow-up on cash flow.
On the refined oil side, the majority of that oil goes to food customers. They are in a challenging environment and are more short bought. We've seen some switching to lower-value products as customers respond to consumers, but we've also seen some moving back to innovation; our ability to provide those solutions has been appreciated and should pay off long term. Some cocoa butter equivalent prices are moving higher again, which could help Tropical Oils. We're also at the front edge of bringing up our protein plant in Morristown. We're excited about the momentum.
To add, our Avondale facility is coming online and when that addition is in place we expect to be running at full capacity. That will provide additional momentum. Longer term, Westhaven is coming online and we're already starting to move oil through pipelines there. We're socializing the site with customers and preparing to shift demand from other locations. We continue to operate in Rotterdam and will have more capability in Europe as we transition. The team is excited and we see strong momentum, but it will take a little time to put all the pieces together.
Okay. Perfect. And then just on CapEx: you're running toward the midpoint of the $1.5 billion to $1.7 billion range. What could drive you to the higher end of that range given projects coming to an end?
It's really about timing of project completions and invoicing. Today, we're probably closer to the high end of that range. We'll see as we get through the balance of the year; timing on when work gets completed and billed drives how we land within that range.
Okay. Perfect. Thank you.
All right. That's all the questions we've got. I'd like to thank everyone for joining us today and for your interest in Bunge. I'd like to thank our team again for doing a fantastic job managing through the complexity we're seeing, using our global footprint and capabilities and the optionality that exists there to serve our customers and meet very strong demand. Thank you all for joining. Have a great week.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.