|With the soybean fundamentals firmly in mind, the following bodes well -
February 23, 2017
Brazilian Farmers Increase Fertilizer Purchases
Fertilizer sales in Brazil start to accelerate in November and December as farmers prepare to plant their safrinha corn. In their February Crop Report, Conab estimated that the safrinha corn acreage would increase 4.7% to 11.03 million hectares (27.2 million acres) and most of the recently purchased fertilizers would be used for safrinha corn production. Conab estimates that there will be a total of 16.5 million hectares of safrinha crops in Brazil including cotton, dry beans, sunflowers, popcorn, grain sorghum, etc. Some of the fertilizers would also be used for sugarcane production as well as the next soybean crop.
Full story - hxxp://www.soybeansandcorn.com/news/Feb23_17-Brazilian-Farmers-Increase-Fertilizer-Purchases
With some interesting ingredients in place, in my opinion, over the coming months there is real potential for a broker upgrade/target price increase. The Interim Results are due next month, so that might also provide us with our next clue in terms of the outlook.|
|Recently I suggested that the fundamentals for soybeans had improved. So readers might be interested in this recent Bloomberg article regarding US planting intentions for soybeans in 2017 -
Planting Decision No Brainer as U.S. Farms Swap Corn for Soy
By Jeff Wilson
Updated February 23, 2017, 5:39 am
February 21, 2017, 12:00 am
(Bloomberg) -- Planting decisions for U.S. corn and soybean farmers are a bit of a no-brainer this year. After confronting the prospects of losses on both crops in 2016, soybeans are now more profitable, which means the world’s largest grower may harvest a record crop for a second straight year.
While corn is still king -- it’s the largest U.S. crop by value and volume -- farmers from North Dakota to Texas are preparing to use more of their land on soybeans instead. That’s because cash prices have jumped 9.2 percent since the 2016 harvest, creating the widest premium over corn in 29 years, and the oilseed is cheaper to grow.
Earlier this year, farmer surveys by researchers Farm Futures and AgriSource Inc. signaled the U.S. will sow more land with soybeans than corn for the first time since 1983. Most will be planted in May and June and harvested in September and October. After polling more than 2,000 growers in six Midwest states in January, AgriSource projected an 8.1 percent jump to 90.2 million, more than the 89.7 million planned for corn.
Full story -
|With the re-emergence of the emerging markets investment case, in this case I refer to Latin America and also the proposition of trying to get exposure to dollar earnings (particularly in the US, albeit we are still talking potential at this stage),Plant Impact offers an interesting investment proposition giving both emerging market and US exposure at a reasonable UK price!|
|Cerrito...You may recall from my posts just before and after PI's results;
wan 27 Oct '16 - 06:44 - 904 of 996
We know Brazil has been a tough market, but what I have been watching, as far as Bayer is concerned,is that the decreases seen in Latin America has been specifically down to insecticides and herbicides. This has again been confirmed in the detailed Quarterly Report -
Most readers will already know that PI's Veritas is sold as part of Bayers fungicide offering. So, hopefully this bodes well. It will also be interesting to see how initial sales of Fortalis have gone.
wan 31 Oct '16 - 09:10 - 911 of 996
A very good performance given the market backdrop (in Brazil), and reassuring given the Chairman's comment that the excellent performance on the ground in Brazil has created "momentum for the coming year", which in turn will be further aided by the geographical expansion outlined.
Very pleased indeed to see that we are transitioning into a phase of establishing Veritas as an "essential" input product and importantly in my view, "across the grower's entire farm production", which as far as I am aware has been predominantly on only part of the growers production. This aspect may also provide another reason to expect momentum.
In other words, Bayers fiscal year is 1st Jan - 31st Dec (PI's is 1st Aug - 31st July) so Bayer also confirmed the difficult backdrop in Latin America in 2016, which PI had already reported in their FY results and during which PI performed very well indeed.
Excerpt from the FY Results -
"The increase in sales was achieved despite the 2015/16 soybean growing season in Brazil being particularly challenging for growers, as low commodity prices and a declining Brazilian Real currency during the seasonal period of grower purchases put margin pressure on farm outputs."
PI has since confirmed (via the Trading Update) that the Group has made a strong start to its FY17 financial year, with the volume of sales of Veritas(R) to Brazil for the entire growing season will meet expectations.|
|Yes thanks WAN - sounds very promising.|
|Well done Wan : informative as ever. This is very good news. I'd like to see how strongly these companies are promoting it?|
|Timbo...Yes I was somewhat surprised at the release time, but perhaps it's something to do with it being a US launch?|
|Thanks Wan as always for sharing with us the results of your research
In your p83 with Bayer's results, this was said; I was unaware that the market environment was so week-anyone have any views? low soy prices at start of 2016?
In the agriculture business, Bayer posted sales of EUR 9,915 million (2015: EUR 10,128 million; Fx & portfolio adj. plus 0.1 percent). "The market environment for our Crop Science Division remained weak last year, particularly in Latin America,
|Thanks, Wan, interesting|
|Recall the following from the Chairman in the AR -
"Following on from this point of focus and risk mitigation, I would like to take
the opportunity to address a question raised during our open investor day event at Rothamsted held on 1 July this year. Attendance was excellent and the questions were indicative that investors take a keen interest in our goals and performance. The question, that was asked several times and in several different ways, was ‘How do we rate risk in our business and how do we distinguish ourselves from the other micro-cap listed companies promising novel input technology for world agriculture?’ This has prompted us to publish a fuller ‘risks’ section in this report, including a section on our approach to risk appetite, to meet shareholders’ desire for more
information on this important aspect of our business."
So it's worth re-reading and referring to the RISK MANAGEMENT FRAMEWORK
AND PRINCIPAL RISKS section, specifically page 21, Customer
Concentration Risk -
Currently, a significant proportion of sales are through Bayer CropScience. This presents concentration risk if they change their strategic focus away from crop enhancement technologies. There is also the risk that internal priorities within their organisation will result in a lack of focus on projects involving Plant Impact technologies. The recent announcement regarding their proposed acquisition of Monsanto risks triggering events which could lead to that loss of focus. Given the strength of the Bayer business and balance sheet, it is not considered that the concentration risk leads to a consequential significant credit risk although this is monitored on a frequent basis.
We are seeking to develop relationships with other partners to spread this concentration risk, although we recognise that it is likely to take time before such actions result in a material dilution of the risk. Commercialisation of the Banzai™ product has been through Arysta LifeScience, and we are reviewing options for our proposed expansion into North America.
Some quick US distributor facts -
GROWMARK System Facts -
GROWMARK’s fiscal year 2016 annual sales were $7 billion
GROWMARK employs more than 450 people in the home office in Bloomington, Ill. and more than 7000 people System-wide
Over 200 local member cooperatives in 14 states and in Ontario, Canada own GROWMARK. In addition, through its retail divisions, GROWMARK has over 10,000 farmer members who are also owners.
We serve more than 250,000 farm, commercial, and residential customers in more than 40 states and Ontario, Canada through our member cooperatives and through retail operations
Helena Chemical Company -
Founded in 1957, Helena Chemical Company has grown to be one of the nation’s foremost agricultural and specialty formulators and distributors in the United States.
Helena is headquartered outside of Memphis in Collierville, Tennessee. Across the country, Helena has over 4,000 employees that work in about 450 branch locations, as well as division offices.
Helena’s overriding goal is to help its customers succeed. This is achieved with a unique combination of dedicated and knowledgeable people, unique and useful products and the latest technical knowledge. The company defines its own success through the success of its customers.
The theme of People…Products…Knowledge230; pervades all levels of the company, with customer success as the goal and ultimate end result.
Van Diest Supply Company -
Van Diest Supply Company now employs over 700 Team Members, has 52 buildings on approximately 270 acres at Webster City, Iowa and sixteen outlying distribution centers located across the Midwest.
Van Diest Supply Company is committed to agriculture. Van Diest Supply Company is unique in the wide array of services offered to the agricultural industry:
Liquid Bulk Storage
At Van Diest Supply Company PEOPLE MAKE THE DIFFERENCE. We believe people deal with people who have a sincere interest in their business and a desire to help them. We strive for long-lasting partnership relationships with our Customers, our Suppliers and our Team Members.
|Well spotted Wan (after hours) that is rather excellent news and good to see that the are going with the Fortalis formulation (where we should have a stronger IP position) rather than the lower strength Veritas formulation (see posts 856 and 878 for details on the IP)
A bit odd releasing this at 17:00 hours rather than 07:00, but I suspect we will now have a (very) blue day tomorrow.|
|And the 3 partners are not exactly small !
great yield improvement. and a massive potential market.|
|An interesting development!
Plant Impact recently completed a three-year research scale and pre-commercial grower trial programme using Fortalis® across the US soybean growing regions. These tests have shown particular improvements in soybean crop health when Fortalis® is applied in conjunction with foliar soybean fungicides marketed by the industry's largest agrochemical manufacturers. Specifically, across results from nearly 150 treatment comparisons, when Fortalis® is combined in a tank mix with the grower's preferred foliar fungicide, soybean crop yields improve by an average of 4.8 bushels per acre vs. an untreated control. This is equivalent to more than a 9% improvement on average US soybean yields, and these results have been achieved in conjunction with a variety of fungicides. The Fortalis® promotional program for growers and retailers in 2017 is therefore designed to integrate the Plant Impact technology with grower's preferred choice of soybean foliar fungicide in a tank mix. This has led to the Group's decision to work directly with major distribution partners that market these relevant leading fungicides, such as Helena Chemical Company, GROWMARK and the Van Diest Supply Company.
Full PI release -
22 February 2017
Plant Impact Plc
("Plant Impact" or the "Group")
USA launch of Fortalis® soybean crop enhancement product
|Ah thanks timbo003 - this helps.
150p sounds good to me if it is achieved. So it is long term from my point of view|
It is worth looking at the CEOs options package, when do they vest and at what price.
See page 4 of this document.
150p looks the most likely take out price to me, but it might take a few years to reach the gross profit target
|I am new to this investing lark and will admit I know little about soybean production/exports and related topics. Bought into PIM in 2015 after reading a good report on it- the company was going places so I thought I will get "in on the action" - Took a punt in effect.
All I need to know is where is this company going for me as a shareholder? Will the share price ever increase. For 2 years I have read all these "positives" which is good but share price drops and seems to merely hover round 45p - 50p
My risk/fault/whatever I fully accept but will there ever be a bonanza coming our way? Is it the intention (long term or otherwise) that Bayer (or someone of the same ilk) will come along and buy them - hopefully offering more than 50p?
Long term I do not have a problem with but can someone shed some light on how long that term might just be?|
|I forgot to include this -
February 22, 2017
Paraguay Farmers Expecting a Good 2016/17 Soybean Crop
Paraguay has not only been increasing their soybean exports in recent years, they have also increased their exports of soybean oil and soybean meal as well. In 2016, Paraguay increased their soybean oil exports by 9.5% and their soybean meal exports by 2.5%. Soybean exports increased 20% in 2016. These increases are the result of not only increased production, but also increased soybean processing capacity as well.
Full story - hxxp://www.soybeansandcorn.com/news/Feb22_17-Paraguay-Farmers-Expecting-a-Good-201617-Soybean-Crop|
|Bayers Results, the bit we are interested in -
Notably again fungicides performed well -
Crop Science successful in a difficult market environment
In the agriculture business, Bayer posted sales of EUR 9,915 million (2015: EUR 10,128 million; Fx & portfolio adj. plus 0.1 percent). "The market environment for our Crop Science Division remained weak last year, particularly in Latin America," said Baumann. Crop Science nonetheless held sales at the prior-year level, the Bayer CEO explained. The considerable 6.9 percent (Fx adj.) decline in Latin America was compensated by gains in the other regions. Sales rose by 3.9 percent (Fx adj.) in North America, 2.7 percent (Fx adj.) in Asia/Pacific and 1.8 percent (Fx adj.) in Europe/Middle East/Africa.
Seeds (seeds and traits) in particular developed positively, growing by 8.3 percent (Fx & portfolio adj.). The Crop Protection business posted gains of 4.0 percent for Fungicides and 4.1 percent for SeedGrowth (seed treatment products) on a currency- and portfolio-adjusted basis. By contrast, the Insecticides business was down sharply (Fx & portfolio adj. minus 13.3 percent). At Herbicides, sales declined slightly (Fx & portfolio adj. minus 2.2 percent). Environmental Science registered a sales gain of 4.5 percent (Fx & portfolio adj.).
The full Fortalis US website is now live. There is a very good video at the bottom of the page on one of the featured news items -
|Interesting article involving Dr David Jones, Chairman of Plant Impact -
Thursday, 16th Feb 2017, by Mike Verdin
Embracing cutting-edge ag technologies 'a necessity, not a luxury'
Looking ahead too, "certainly, a price spike would recruit new technology in to the field."
Maybe agriculture investors should look to the farm inputs sector, as well as to prices of crops themselves, as a way of exploiting the next bull market in agricultural commodities.
Dr Jones will be delivering the keynote address on the Agri Tech day of Agrimoney Live 23 - 25 May. He will be outlining his vision for Agriculture in 2025.
Full article - http://www.agrimoney.com/feature/embracing-cutting-edge-ag-technologies-a-necessity-not-a-luxury--502.html|
|New R&D news and views web page -
|Latest USDA weather report encouraging
2 - SOUTH AMERICA
Heavy rain returned to central Argentina in early
February, renewing concerns for localized flooding
but maintaining abundant moisture levels for
immature corn and soybeans. The rain was
welcomed in previously dry southwestern farming
areas. Frequent rainfall also maintained favorable
prospects for soybeans, cotton, and other summer
crops in most major production areas of central and
southern Brazil, although pockets of dryness lingered
in a few locations in the northeastern interio|
|1/. trust and confidence comes from independent respected bodies. Farmers are wise old owls and v cynical of company proclaimed promises.
Trust is gained from user experiences which PIM has been gaining for many years now, not self-awarded marketing kite marks.
I think this process is v useful internally for PIM as it sets company standards to be an essential part of the corporate structure. I also think it is useful in its relationships with the major agro/chems…230;..
It may well be part of a medium term process to make them accountable /measurable and more attractive to a prospective buyer…..|
here and there
|H&T...In my view, the new quality standard address two important objectives and address one important issue.
The two important objectives are; 1. to convey a high level of trust and confidence to the end user, and 2. given that PI's strategy is to market its products via strategic partnerships, the second objective is to align with the standards of the major agrochemical suppliers, which is indeed a high hurdle!
If you watch the CEO's youTube presentation, he clearly states that PI now operates to the same exacting standards as the major agrochemical suppliers (who they have deep knowledge of). So, the new standards aligns them very well with their ultimate target.
The important issue the standards address is one of a lot of noise with little substance i.e. many products promise much, but don't deliver anything like what is claimed.
Indeed it is a self-imposed set of standards, a fact PI have not tried to hide! However, it is still a high bar to stand by, but it will set them apart because it is a standard that is likely to be unattainable by much of the noise!
|Here and there, I see both sides to this news. But if independently accepted then another barrier to entry. I get their philosophy but will depend on independent verification to mean anything.|
|Sounds great but….
This is an award for PIM products from PIM……230;is this meaningless marketing tosh? Or am I missing something?|
here and there