Reuters — Corteva expects prices for grains and oilseeds to remain high this year on record demand levels, its CEO said Thursday, following the insecticide and seed company’s upbeat sales outlook a day earlier.
Global agriculture demand and prices for crops picked up pace in the fourth quarter of 2021, thanks to economies reopening and a rebound in the ethanol sector on easing COVID-19 lockdowns.
“Over the medium to long term, we see constructive fundamentals continuing, as possible new demand to support renewable fuels such as bio-based diesel will likely support healthy agricultural commodity price levels,” CEO Chuck Magro said on a call with analysts.
Read Also
U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
Corteva said it expects high fertilizer prices to prompt some growers to rotate into soybeans from corn and boost demand for Enlist, its next-generation biotech soybean seeds and complementary herbicides.
U.S. plantings of corn, which requires more fertilizer than soybeans, could be limited in 2022. A shortage of nitrogen fertilizer due to soaring natural gas prices is threatening to reduce global crop yields, according to a major producer of the crop nutrient.
Enlist’s market share of the total U.S. soybean planted area could grow to at least 40 per cent this year from 35 per cent in 2021, Corteva said on Thursday.
The company, spun off in 2019 after a merger of Dow Chemical and Dupont, on Wednesday forecast better-than-expected sales of $16.7 billion to $17 billion this year (all figures US$).
“For a new CEO to arrive in the midst of an incredibly difficult operating environment and guide to $16.7 billion to $17 billion of sales is quite solid,” Mizuho Securities analyst Christopher Parkinson wrote in a note.
— Reporting for Reuters by Rithika Krishna in Banaglore.
