Nov. 10 (Bloomberg) -- Monsanto Co., the world’s largest seed producer, said the increase in farmers’ yields generated by its new genetically modified soybeans is at the low end of its forecast range.

Roundup Ready 2 Yield soybeans, which were planted on 1.5 million acres in their first year on the market, boost yields 7.3 percent, St. Louis-based Monsanto said today in a presentation on its Web site. The company said as recently as Sept. 10 the seeds increase yields 7 percent to 11 percent.

Monsanto Chief Executive Officer Hugh Grant is counting on new SmartStax corn and Roundup Ready 2 soybeans to add $1 billion to profit by 2012. Some investors are losing confidence in Monsanto after growers and seed distributors told OTR Global, a Purchase, New York-based research firm, that the new soybeans aren’t meeting yield expectations.

“The shares will likely remain range-bound until the company addresses outstanding questions on Roundup Ready 2 Yield performance in 2009-2010 and pricing in both corn and soy,” Laurence Alexander, a New York-based analyst at Jefferies & Co., wrote in a report today. He rates the shares “buy.”

Roundup Ready 2 soybeans are “consistently delivering a step-change yield improvement over competitive varieties” in early-season trials, Monsanto said today in a statement. The company plans to provide more detail on yields during an investor presentation today beginning at 2:30 p.m. New York time, said Kelli Powers, a spokeswoman.

Share Performance

Monsanto climbed 27 cents to $70.27 at 2:34 p.m. in New York Stock Exchange composite trading. The shares declined 0.5 percent this year before today.

“Our growth strategy from 2010 through 2012 boils down to three operational imperatives: the conversion to Genuity SmartStax in U.S. corn, the farmer choice of upgrading to the Genuity Roundup Ready 2 Yield platform in U.S. soybeans, and the opportunity as Latin America increases its technology adoption,” Grant said today in a statement.

Monsanto increased its expectation for 2010 sales of Roundup Ready 2 soybeans to 8 million to 10 million acres, from earlier forecasts of 7 million to 8 million acres. SmartStax will be sown on more than 4 million acres in 2010, compared with earlier plans for 3 million to 4 million acres, Monsanto said.

The company repeated its plan to double its 2007 gross profit in 2012. It also confirmed its 2010 profit forecast of $3.10 to $3.30 a share. The average estimate of 16 analysts surveyed by Bloomberg was $3.29.

To contact the reporter on this story: Jack Kaskey in New York at jkaskey@bloomberg.net.

Last Updated: November 10, 2009 14:36 EST