By Rithika Krishna
Feb 3 (Reuters) – Corteva Inc CTVA.N expects prices for grains and oilseeds to remain high this year on record demand levels, its chief executive said on Thursday, following the insecticide and seed company’s upbeat sales outlook a day earlier.
Global agriculture demand and prices for oilseeds like soybean and corn 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 Margo said on a call with analysts.
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% this year from 35% 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.
“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.
Shares in Coretva rose as much as 2.15% at $49.19 in morning trading.
(Reporting by Rithika Krishna in Bengaluru; Editing by Ramakrishnan M.)
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