April 2, 2012

US corn crop surge to boost Monsanto's Q2

Soaring US corn and other crop sowings may boost Monsanto's second quarter results.

Three months ago, strength in Latin America lifted Monsanto above analyst expectations.

On Wednesday (Mar 28) the seed giant will post Q2 results. Consensus estimates call for earnings of US$2.12 a share, up from US$1.87 a year ago. Analysts forecast revenue climbing 9.7% to US$4.53 billion.

In its first quarter, the company pointed to expanded sales in Brazil and Argentina, and strong US seed orders for spring planting. The momentum helped it narrow its 2012 guidance to the high end of its previous range.

On Friday, the USDA said US farmers were planting the largest corn crop in 75 years to cash in on higher prices. That could help Monsanto, though the extra corn acreage came at the expense of soy and wheat sowings, the government said.

Monsanto closed up 1% Friday at 79.76.

The report sent other agricultural companies higher too.