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Monsanto (MON) Displays Robust Research & Development Moves

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Monsanto Company has been fortifying its innovation footprint in a bid to offer advanced crop-yield enhancing solutions to cultivators.

The company stated that its latest research and development projects will help farmers by optimizing agricultural opportunities, conserving natural resources and combating agronomical threats. The company’s subsidiary — The Climate Corporation — has also provided an update for its innovation programs. Moreover, in association with Novozymes, Monsanto will soon roll out fresh agricultural solutions that would help in boosting farmers’ harvest.

Over the last six months, Monsanto’s shares yielded a return of 1.2%, as against the 5.2% loss incurred by the industry.

The company is poised to grow on stronger innovation, favorable pricing of major inputs (like glyphosate) and the proposed Bayer AG’s (BAYRY - Free Report) buyout deal (anticipated to close by early 2018).

New Projects in Pipeline  

Monsanto has financed new projects in five major research and development domains — plant breeding, crop protection, agricultural biologicals, plant biotechnology and data science. The company noted that innovative farming solutions produced through these programs will help farmers battle severe agricultural constraints, such as drought, water scarcity, climatic changes, land availability issues, plant diseases, incidence of weeds, and insects. Notably, the company stated that these products will help growers efficiently meet the growing global fiber and food demand.

Lygus and Thrips Control Cotton, Trecepta, NemaStrike, High-Density Corn System, Harness Max Acetochlor Premix, Acetochlor + Dicamba + 3rd MOA Premix and Next Gen Dicamba Premix are some new crop-yield enhancing technologies of Monsanto. The company believes these offerings will significantly benefit agricultural productivity in the 2018 growing season.

BioAg Alliance

Monsanto and Novozymes have jointly formed a BioAg Alliance in order to invent crop harvest-improving products (inclusive of naturally occurring microbes).

The alliance mentioned that the Corn BioYield 2 project is currently in Phase 4 and will likely be branded as Acceleron B-360 ST. The solution will help solidify the plant’s root systems and also improve its access to nutrients. Moreover, Acceleron B-360 ST will be combined with Acceleron B-300 SAT (launched in 2017) during its usage. The alliance plans to market the solution in 2019. However, the previously-introduced Acceleron B-300 SAT will likely be applied in almost 10 million acres in the United States in 2018.

In addition, under the Soy BioYield 2 project, the alliance would soon launch two products — one for the North American and the other for the South American market. These products would help improve the soybeans’ uptake of nitrogen, hence reinforce the plant’s health and harvest.

Notably, BioAg Alliance also announced its plans to expand in Europe by 2019-2020.
Subsidiary-Based Growth

The Climate Corporation also recently announced 17 new research and development programs. The company stated that these advancements will help create science-driven digital agricultural solutions (build through predictive modelling, data analytics and machine learning). The solutions will help farmers optimize inputs and maximize yield productivity.

Zacks Rank and Key Picks

Monsanto currently carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the same sector include:

Koppers Holdings Inc. (KOP - Free Report) currently sports a Zacks Rank #1 (Strong Buy). The company has pulled off an average positive earnings surprise of 59.73% in the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle Mines Limited (AEM - Free Report) carries a Zacks Rank #2 (Buy). The company generated an average positive earnings surprise of 58.83% over the trailing four quarters.

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