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Monsanto Idea Proposal

Monsanto Idea Proposal

Research Question: Will Monsanto grow its seed market share during the ag recession?

Report Available: Dec. 4, 2015


Blueshift’s initial research shows grain prices near their 52-week lows and no sign of sustained recovery in 2016. MON expects global demand for corn and soybeans to exceed forecasts through 2025 as more emerging countries continue consuming more grain. Despite the grain market softness, MON’s new Xtend soybeans were likely to sell out by December.



  1. MON suffered a disappointing Q4, missing revenue, EPS and issuing lower than anticipated 2016 guidance. Management announced a restructuring program designed to save $275 to $300 million per year, a $3 billion share repurchase program, and the reduction of 2,600 jobs over the next few years. Management reiterated its expectation of doubling FY2014 EPS by 2019 and announced that its new Roundup Ready Xtend soybeans were trending to sell out by December at a $5 to $10 per acre premium price.
  2. U.S. corn acreage slipped 2% to 88.9 million acres in 2015, the lowest levels since 2010. Worldwide planted and harvestedcorn and soybeans fell 0.5% and 1%, respectively. Currently, both corn and soybean prices are near 52-week lows. Growth in soybean and corn volume and pricing is unlikely in 2016. Recently, MON has focused efforts on trying to acquire other pesticide brands like SYT and inadvertently suggested that it may be overinvested in high-tech seeds.
  3. U.S. soybean acreage was up 2% in 2015, with record planted acreage in several states including Minnesota, Ohio, and Wisconsin. Favorable weather in South America could increase soybean production in Brazil and Argentina, along with currency devaluationin both countries. Emerging markets continue to consume more soybeans and corn, which may benefit long-term pricing trends for MON’s seed business.
  4. Blueshift’s March 18 report revealed that MON’s new Intacta RR2 Pro soybean seeds were unlikely to offset the expected decline in corn seed sales in the short term. However, 18 of 27 sources thought this new soybean technology had strong potential for widespread use by licensed seed companies, regions experiencing Roundup-resistant weeds, and parts of South America affected by Helicoverpa armigera worms. Approval of MON’s soybeans was expected in China in 2016.


Is there a glimmer of hope that grain prices will recover in 2016? Will MON maintain or grow its seed market share during this ag recession? To gain insight into MON and the corn and soybean markets, Blueshift will gather data and issue a market research report from independent sources in the following areas: Farmers, Seed distributors and cooperatives, Agricultural researchers, and Industry specialists.


Companies: Monsanto (MON), Syngenta AG (SYT), Du Pont (DD), The Dow Chemical Company (DOW), BASF SE (BASFY), Bayer AG (BAYRY)