CHICAGO, Ill. (Reuters) — Global grains merchant Bunge Ltd. has reported a surprise quarterly loss as its agribusiness unit took a $125 million hit from soybean hedges tied to the trade dispute between the United States and China.

The result was in stark contrast to Archer Daniels Midland Co. and Cargill Inc., which reported strong profits in their most recent quarters.

Bunge largely blamed a bet that soybean prices would rise as U.S.-China trade tensions eased during the period. However, the trade war escalated and soybeans fell sharply.

Bunge also reported a $24 million hit in the April-June quarter from currency hedges in Brazil, but said it expected to recover the losses in the second half of the year.

The loss was particularly surprising because large international grain traders had been expected to benefit from market volatility and shifts in global grain flows resulting from a deepening trade war between the world’s two largest economies.

“It was not what you would have expected, given this is a peak quarter in South America,” chief executive officer Soren Schroder said.

The company bought large volumes of Brazilian soybeans in the quarter and took on long positions in soybean futures to protect crush margins in the event that China’s threatened tariffs on U.S. soybeans would not be implemented, Schroder said.

“We thought that (resolution) would have been very bullish, positive to futures, which, in turn, would have put pressure on the basis long that we had accumulated in Brazil,” he said.

“As it turned out, the trade talks have not resulted in any resolution and futures subsequently drifted lower, which led to a loss.”

The loss was partially offset as Bunge’s agribusiness segment sold 3.4 percent more grains and other commodities in the second quarter and gross profit from the unit more than doubled to $354 million.

Bunge said the net loss available to shareholders was $21 million in the second quarter end of June 30, compared with a profit of $72 million a year earlier.

It said net sales rose to $12.15 billion from $11.65 billion.