Monsanto flagged the prospect of a drop in South American
corn sowings, amid a debate on how significantly lower prices are deterring
plantings, and how much of a boost this may give to soybean area.
Brett Begemann, the Monsanto chief operating officer, said
that the South American corn seed market was "going to be a lot smaller" for
"That's clear. Third parties saying that acres are going to
be down 20-30%," he told investors.
In Brazil, South America's top grower of the grain, the group
was "pretty confident corn acres are going to be down in the first season" – or
summer corn crop, which is currently being seeded.
"Third parties are confirming that," he said.
For the second, or safrinha crop – which will be planted early
next year, typically on land left clear after harvesting soybeans – "we don't anticipate
the same kind of decline… that we're seeing in the summer season", Mr Begemann
Corn vs soybeans
In Argentina, South America's second-ranked corn-growing
nation, Mr Begemann signalled expectations of a decline in sowings too,
although saying that "we don't see the same kind of reduction" as in Brazil.
Still, the lower corn sowings would open up opportunities
for soybean seedings, which the group saw fuelling a rise to 60m acres in South
American use of its Intacta Roundup Ready 2 Pro genetically modified soybean
seed for next season, up 10m acres year on year.
In Argentina, Mr Begemann said that "I would anticipate that
those [lost corn] acres are replaced with soybeans".
Farmers in Brazil "have options to other crops as well", he
told investors, although adding that "I would anticipate at this point that in
most cases" lost corn area would be switched to soybeans.
'Low prices and poor
The comments come amid something of a divergence on South
American corn sowings prospects for 2017-18, with Michael Cordonnier, for
instance, the respected crop analyst, seeing total Brazilian corn sowings down
This forecast factors in "a significant decline in the
full-season acreage, maybe 20% or more, and a hold even, or a slight decline,
in the safrinha corn acreage, [of] maybe 2% or more", he said, citing
observations of "low corn prices and better returns for soybeans".
The International Grains Council last week said that "due to
low prices and poor returns, first [main crop] corn sowings in Brazil are
expected to drop sharply… as more growers opt instead for soybeans".
Safrinha corn sowings are "projected to show little overall
change", the council said.
However, the US Department of Agriculture has forecast a
small rise in Brazilian corn area in 2017-18., by 150,000 hectares to 17.7m
hectares on a harvested basis.
And in Argentina, the USDA sees a marked rise in corn area,
of 300,000 hectares to a record 5.2m hectares.
The IGC also forecasts Argentine corn sowings growing "to a
new peak", while the Buenos Aires grains exchange foresees growth in sowings to
5.4m hectares, also a 300,000-hectare rise, on its estimates.
Dr Cordonnier said that Argentine farmers "are expected to
increase their corn acreage due to better returns expected for corn.
"The big advantage for corn in Argentina is the fact that
the export tax for corn has been completely eliminated, while the export tax
for soybeans is still 30%."
Indeed, the IGC saw "limited potential for a sizeable
expansion" of Argentine soybean seedings in 2017-18, while the Buenos Aires
grains exchange last week forecast a drop in sowings of some 900,000 hectares to
However, the USDA has pegged Argentina soybean area up 750,000
hectares year on year at 19.1m hectares.
For Brazil, there is broader industry agreement, with the USDA
seeing soybean area up 800,000 hectares at a record 34.7m hectares, and the IGC
saying that soy "seeding is expected to be larger year on year", although
adding that "gains may be capped by low local and world prices".
Consultancy AgRural estimates a rise of nearly 2% to 34.56m
hectares in Brazilian soybean plantings in 2017-18, although a slow start to
seedings, thanks to dry weather in major central growing areas, has raised
questions over sowings being curtailed.