One of the world’s largest seed companies thinks South America’s corn crop is going to be much smaller than the U.S. Department of Agriculture and some analysts are anticipating.
“In Latin America, the corn acres were softer in (quarter) one than we originally anticipated with Argentina down an estimated 20 percent compared to last year and Brazil down 10 percent in the summer season,” Monsanto president Brett Begemann said in a Jan. 7 conference call discussing the company’s first quarter results.
Those estimates are well above the USDA’s forecast of a 12 percent acreage reduction in Argentina and a 4.5 percent decline in Brazil.
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If Monsanto is correct, it could provide a bullish boost for corn and other grain prices.
Brazil is forecast to be the world’s second largest corn exporter in 2014-15 behind the United States. Argentina holds down the fourth spot, so both South American countries are major players when it comes to setting global corn prices.
Analysts were anticipating much smaller declines in seeded acreage.
Alastair Stewart, DTN’s South American correspondent, was forecasting a five to 10 percent contraction in Brazil’s corn acres and a two percent reduction in Argentina’s at DTN’s annual Ag Summit last month.
There is support for Monsanto’s outlook. With three-quarters of the crop in the ground, the Buenos Aires Grains Exchange expects Argentina’s plantings will fall 21 percent to 7.4 million acres in 2014-15, which is well below the official government estimate of 13.7 million acres.
Contact sean.pratt@producer.com
