(Bloomberg) – Bunge Ltd. (BG), the world’s second-largest oilseed processor, sees U.S. corn and soybean acreage expanding this year because of high grain prices.
“You should see more corn and soybean plantings,” Alberto Weisser, chief executive officer of White Plains, New York-based Bunge, said in a telephone interview today. “Prices are still at the levels which are very profitable.”
U.S. corn plantings rose to 91.9 million acres in 2011 from about 86 million acres in 2008, according to U.S. Department of Agriculture data. Soybean acreage dropped 3.1 percent to 75 million acres last year from 2010, USDA data shows. The department will make its initial forecast for 2012 plantings on Feb. 23.
Farmers planted more corn in the U.S. as futures on the Chicago Board of Trade rose to a three-year high of $7.93 a bushel on June 9. While prices have fallen 19 percent during the past eight months, they are still above the 10-year average of $3.67 a bushel. Soybean prices have declined 16 percent to $12.315 a bushel yesterday from a three-year high of $14.65 on Aug. 31.
Weisser said “tight” inventories are supporting prices and giving farmers an incentive to plant more crops. He declined to provide specific acreage forecasts. Prices will come down once stockpiles expand, he said.
Falling Corn Inventories
World corn inventories will fall to 125.4 million tons from 128.1 million projected last month, the USDA said in a report today. Soybean stockpiles will total 60.28 million tons in the 12 months ending Sept. 30, down from 63.43 million forecast in January and 68.9 million a year earlier, the USDA said.
Bunge said today net income for the three months through Dec. 31 fell to $254 million, or $1.65 a share, from $301 million, or $1.95, a year earlier as a smaller sugar cane crop in Brazil reduced sugar and ethanol production.
Bunge rose 5.5 percent to $62.99 at the close in New York, the most since Oct. 27. Earnings exceeded the $1.53 average of 10 analysts’ estimates compiled by Bloomberg.
Weisser said he doesn’t expect to cut hundreds of jobs like competitors Archer Daniels Midland Co. and Cargill Inc. A slowing growth rate in China won’t hurt Bunge because demand for livestock feed is still rising, he said.
ADM said Jan. 11 it plans to cut about 1,000 jobs, or 3 percent of its workforce. Cargill, the world’s largest oilseed processor, announced on Dec. 2 that it will cut as many as 2,000 jobs, or about 1.5 percent of its workforce.
To contact the reporter on this story: Shruti Singh in Chicago at ssingh28@bloomberg.net
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net
