UPDATE 1-Bunge jumps on report of possible Glencore takeover

(Adds Glencore decline to comment, adds background, updates share price)

May 23 (Reuters) - Shares of Bunge Ltd surged on Tuesday after the Wall Street Journal reported that commodities trader Glencore Plc has approached the U.S. agribusiness group about a takeover.

It was unclear where discussions between the companies stand and there may not be any deal, sources familiar with the matter told the newspaper. (http://on.wsj.com/2q7SZTI)

Bunge did not respond to multiple requests for comment. Glencore declined to comment.

The report comes amid heightened expectations of consolidation among large grain traders as a global oversupply and thin trading margins have squeezed the core grain trading operations of Bunge and rivals Archer Daniels Midland Co , Cargill Inc and Louis Dreyfus Co.

Bunge Chief Executive Officer Soren Schroder said earlier this month that the sector was ripe for consolidation and that Bunge is prepared to take the lead in any dealmaking.

Bunge had a market capitalization of $9.84 billion at Monday's close. Shares jumped as much as 17.6 percent to a 2-1/2-month high, and were up 14.6 percent at $80.18 at midafternoon.

A deal would make Glencore, the Swiss mining and trading giant, a major player in the U.S. agriculture market, the Journal reported. (Reporting by Karl Plume in Chicago, Chris Prentice in New York and Sruthi Shankar in Bangalore; Editing by Marguerita Choy and Jeffrey Benkoe)