Soy Business Lifts Monsanto Profit -- WSJ
June 29 2017 - 3:02AM
Dow Jones News
By Jacob Bunge
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the US print
edition of The Wall Street Journal (June 29, 2017).
Increased soybean plantings in the U.S. this spring boosted
biotech seed giant Monsanto Co.'s quarterly profit, despite the
broader slump in agricultural commodity prices.
Farmers this year have dedicated more acres to soybeans after a
string of record-breaking harvests eroded the price of corn and
wheat. Soybean prices had fared better due to strong demand from
China and elsewhere, though prices have declined as farmers ramped
up planting. Heavy rain this spring also forced some farmers to
switch some corn fields to soybeans, which typically can be planted
later.
That trend coincided with Monsanto's introduction of new soybean
varieties that are genetically engineered to resist a more powerful
combination of herbicides. About 20 million U.S. acres were sown
with the new seeds, executives said Wednesday.
"For soybeans, the momentum continues to be tremendous,"
Monsanto President Brett Begemann said, as the St. Louis-based
company reported better-than-expected profit for the period.
Chief Executive Hugh Grant said Monsanto's sale to German
chemical conglomerate Bayer AG was progressing through antitrust
reviews around the world. The $57 billion deal to create the
world's largest supplier of pesticides, seeds and crop genes is
expected to close this year, he said.
Some jurisdictions already have cleared the deal. As a condition
of the deal, South Africa required Bayer to sell a herbicide and
crop-gene franchise that competes with Monsanto's "Roundup Ready"
suite of crops and weed killers.
A 29% increase in quarterly sales for soybean seeds and crop
genes prompted Monsanto on Wednesday to maintain its forecast
earnings of $4.09 to $4.55 a share for its fiscal year, which wraps
up Aug. 31.
Monsanto shares were ahead 1.1% at $118.56 in afternoon trading
on Wednesday.
Monsanto's new soybean variety, engineered to resist the
herbicide dicamba as well as glyphosate, has been linked to crop
damage in some Southern parts of the U.S.
A growing number of farmers in Arkansas, Missouri, Mississippi
and Tennessee have reported crop damage allegedly caused by dicamba
drifting from neighboring fields. Some farmers have sued
Monsanto.
The company has said it advises farmers on how to use the spray
safely and will fight the lawsuits.
For its latest quarter, Monsanto reported a profit of $843
million, or $1.90 a share, up from $717 million, or $1.63 a share,
a year earlier. Revenue from seeds and genomics, Monsanto's biggest
business, fell 2.3% to $3.1 billion despite strong results from the
soybean seed segment.
Ezequiel Minaya contributed to this article.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
June 29, 2017 02:47 ET (06:47 GMT)
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