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Monsanto: 2011 seed orders on track, ahead of 2010 pace

01/06/2011 @ 11:30am

Monsanto Co.'s (MON) seed orders for 2011 are ahead of the pace set in 2010 and are "tracking well" against the company's 2011 targets, Chief Executive Hugh Grant said Thursday.

Grant said the company's order book, "the most significant element of our seeds and traits outlook," shows the company's strategy, which has included lower prices for its high-end corn seed, is working.

The St. Louis company last year watched rival Pioneer Hi-Bred, a DuPoint Co. (DD) subsidiary, gain market share during a farmer backlash over seed pricing.

Grant said that this year, order volumes are up and their composition is in line with expectations. But he added in a conference call that "until the seed is out the door, we're not taking anything for granted."

Farmer demand for seed in general is expected to climb in 2011 as high commodity prices and tight world supplies compel farmers to plant more acres.

The increased orders won't compel Monsanto to make a "knee-jerk" reaction and raise prices, Grant said. Instead, it will stay focused on increasing volume.

"I really want to re-establish the belief in these technologies and repair some fences," Grant said.

Grant declined during the conference call to predict whether the company would regain market share. He acknowledged Monsanto has made such forecasts in the past, but that "really what you're doing is guessing how big the U.S. corn market is."

Grant also reiterated that the company plans to sell 250 million to 300 million gallons of its glyphosate herbicide this year at a profit of about $1 a gallon and won't try to generate higher volumes through price reductions. He added that despite reports of increased glyphosate production costs in China, prices in the U.S. have yet to climb.

Monsanto's stock rose Thursday after the company reported strong seed orders for 2011. It was recently up 2.7% to $71.

-By Ian Berry, Dow Jones Newswires; 312-750-4072; ian.berry@dowjones.com

(END) Dow Jones Newswires

January 06, 2011 11:12 ET (16:12 GMT)

Copyright (c) 2011 Dow Jones Company, Inc.

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