Replies to post #8589 on The Rising Influence of Rising Affluence

[biotech_researcher]

His is one of the new high-tech tools that helped corn farmers sow 30% of this year's U.S. crop in a single week, covering an area roughly the size of New York…

This is stunning... For the first time in US history, we will be able to re-plant on demand..

[DewDiligence]

MON +5% to 6-year high on aggressive 5-year EPS guidance and new $10B buyback:

http://online.wsj.com/articles/monsanto-profit-falls-6-10-billion-buyback-plan-unveiled-1403699602

Monsanto Co. it expects to at least double profits over the next five years [i.e. from FY2014 to FY2019] as farmers buy more of its biotech seeds and it expands its nascent business in high-tech planting services.

…Monsanto is basing its upbeat outlook for the remainder of the decade on it ability to breed sturdier seeds and develop new genetic traits that can resist a broader range of weedkillers and bugs. The world's largest seed company by sales is finding success selling new soybean seeds to South American farmers and expects corn-seed sales to ramp up in places like Eastern Europe… Overall, the seeds and genetic traits segment is expected to contribute more than $4 billion in additional profit over the next five years…

The profit projection also reflects Monsanto's decreased reliance on pesticides to drive growth, after an influx of generic replicas of Monsanto's signature Roundup weedkiller contributed to a roughly 45% slide in profit from 2009 to 2010.

…earnings also will be boosted by newer ventures such as its push into planting and weather analytics products sold to farmers [#msg-103577111]. Farmers now are using Monsanto's data services on more than 40 million acres of U.S. farmland, representing roughly one in five acres of corn and soybeans in the U.S. and ahead of Monsanto's earlier goal of 20 million acres…

For FY2014 (ending 8/31/14), MON narrowed the guidance range for non-GAAP EPS to $5.10-5.20 (from the prior range of $5.00-5.20). However, the bigger news item today is that MON will use balance-sheet cash plus the proceeds from a new bond issue (originally intended for the acquisition of SYT—see #msg-103617874) to repurchase an additional $10B of MON stock during the next two years; this is in addition to the $1B of repurchases remaining on the prior share-repurchase authorization. If the full $11B repurchase is implemented, it will reduce MON’s shares outstanding by about 17%.

Given the bullish 5-year EPS guidance and the aggressive new buyback plan, it’s not to see why the share price is soaring. At the current share price, MON is +184% from its Jul 2010 low of $44.61.

[DewDiligence]

USDA forecasts record US soybean crop:

http://online.wsj.com/articles/corn-soybean-prices-slide-on-robust-u-s-supplies-1404151637

Soybean futures tumbled Monday after the government estimated farmers will plant a record 84.84 million acres this year, sharply higher than the average analyst forecast of about 82 million acres and the USDA's prior forecast in March for about 81.49 million acres.

The USDA attributed the soybean planting increase to "much improved" seeding conditions over the spring compared with a year earlier. Planting of soybeans was 95% complete as of June 22, ahead of last year's pace, when wet weather delayed sowing in much of the country.

Many U.S. farmers planted soybeans this year instead of corn because prices for the oilseed have been more favorable.

Lower soybean prices in the near term are modestly bearish for DE, but have little if any effect on MON.

[DewDiligence]

Cargill enters the fray for precision planting services:

http://online.wsj.com/articles/cargill-launching-data-analysis-service-for-farmers-1410201672

Cargill Inc. is developing a software service that guides farmers on how to plant crops, a foray that pits the agricultural conglomerate against a host of rivals seeking to harvest reams of data to sell "prescriptive planting" technology in North America.

Cargill began selling the service in two U.S. states this summer and plans a broader push over the next several years as it seeks to help farmers produce larger crops and navigate weather shifts, officials said.

The tool, called NextField DataRx, will compete with data-analysis services from companies including Monsanto Co. and DuPont Co., which seek to apply new number-crunching techniques to the age-old variables of raising crops, including soil content, seed type and temperature fluctuations.