AgDay Daily Recap -Sept. 16, 2016

September 16, 2016 02:57 AM
 

TODAY ON AGDAY
SEPT. 16, 2016


OPENING HEADLINES:
COMING UP TODAY ON AGDAY -ANOTHER MEGA-MERGER GETS INKED IN AGRICULTURE...AS BAYER AND MONSANTO COMES TO TERMS. WE HAVE TEAM COVERAGE. IN AGRIBUSINESS...CHECKING ON ETHANOL DEMAND. BEEF PRODUCTION FORECASTS FOR 2016 AND 17. AND IS IT THE FUTURE OF FOOD--A ROBOT PREPPING PIZZA MAY BE COMING TO A NEIGHBORHOOD NEAR YOU.
BAYER AND MONSANTO MERGE:
GOOD MORNING I'M CLINTON GRIFFITHS. THE JOINING OF TWO MAJOR AG PLAYERS TOPS OUR NEWS THIS MORNING, AS BAYER AND MONSANTO COME TO TERMS ON A 66 BILLION DOLLAR DEAL. TRADERS ARE UN-SURE THE TRANSACATION WILL WIN REGULATORY APPROVAL. STILL ON THE EUROPEAN EXCHANGE, BAYER STOCK CLOSED ONE PERCENT HIGHER. AND ON WALL STREET, MONSANTO SHARES CLOSED ABOUT A DOLLAR HIGHER AS WELL. THE FINAL BAYER BID COMES IN AT 128 DOLLARS PER SHARE--THAT'S 44 PERCENT ABOVE THE MAY 9TH SHARE PRICE--WHEN ALL OF THIS FIRST BEGAN. SHAREHOLDERS VOTE AT END OF 2016 OR EARLY 2017 WITH FINAL APPROVAL AND CLOSING EXPECTED AT THE END OF 2017. OF COURSE THE DEAL WILL ALSO NEED APPROVAL FROM FEDERAL REGULATORS.
BETSY HAS THE STORY:
NATIONAL REPORTER BETSY JIBBEN JOINING US NOW WITH THE LEGALITY SIDE OF THINGS AS WELL AS REACTION. LEADERS FOR BOTH BAYER AND MONSANTO STRIKING A CONFIDENT TONE WEDNESDAY--ADAMANT THE DEAL CAN GET THE NECESSARY APPROVALS. BUT DESPITE THAT OPTIMISM, AGRICULTURAL LAW AND TAXATION EXPERTS TELL US THIS POSSIBLE TAKEOVER WILL MORE THAN LIKELY HAVE THE MOST HURDLES TO CLEAR OUT OF ALL THE OTHER PENDING MAJOR AG MERGERS. IT'S AN PURCHASE BAYER AND MONSANTO HOPE TO BE COMPLETED BY THE END OF 2017.. "WITH THE ANALYSIS WE'VE DONE AND THE WORK WE'VE DONE, WE FEEL CONFIDENT WE CAN CONCLUDE THAT TRANSACTION WITHIN THAT TIMEFRAME,"> BUT LEGAL EXPERT ROGER MCEOWEN SAYS THERE ARE PLENTY OF HURDLES TO CLEAR... THAT'S BECAUSE IT INVOLVES REGULATORS IN BOTH THE EUROPEAN UNION AND THE U.S. JUSTICE DEPARTMENT…
WORK STILL TO BE DONE TO SUCCESSFULLY MERGE:
NOT TO MENTION BOTH COUNTRY'S CLASHING VIEWS ON GMOS. "THAT IS GOING TO BE A MAJOR STICKING POINT AS THE EU CONSIDERS THIS DEAL. AS WE KNOW, MONSANTO HAS BEEN OUT IN FRONT OF GMO TECHNOLOGY. THAT ALONG IS GOING TO BE A MAJOR POINT, NOT NECESSARILY ON THE US SIDE BUT THE EU SIDE OF THIS PROPOSED DEAL,"MCEOWEN SAYS THERE WERE 6 COMPANIES COMPETING ON THE GLOBAL MARKETPLACE IN CROPS AND SEEDS IN 2015. THERE WILL BE FOUR IF THE DEAL GOES THROUGH. MCEOWEN SAYS THERE COULD BE A CLASH OF CORPORATE CULTURES. WHICHEVER CULTURE IS ADOPTED COULD IMPACT THE FUTURE OF GMOS. "WHATEVER CULTURE RESULTS, WHETHER IT'S THE BAYER APPROACH IN EUROPE OR MONSANTO IN THE UNITED STATES, THAT RESULTING CULTURE WILL IMPACT THE GLOBAL FOOD CHAIN PARTICULARILY WITH RESPECT TO GMOS."BUT IOWA SENATOR CHUCK GRASSLEY IS TAKING A CLOSER LOOK AT THESE AGINDUSTRY MEGA MERGERS NEXT WEEK. "IT COULD BE BEFORE WE GET TO TUESDAY, THAT THE MONSANTO BAYER MAY BE INVOLVED ON THAT. FARM GROUPS ARE ALREADY TAKING SIDES. THANKS BETSY.
WHAT DOES MEGA MERGER MEAN FOR SEED MARKET:
IN THE U.S. ALONE, THE COMBINED COMPANY WOULD OWN NEARLY 37% OF THE SEED MARKET FOR CORN AND NEARLY 30% SEED MARKET FOR SOYBEANS. ON THE CROP PROTECTION AND TRAITS BUSINESS--THE MERGED COMPANY WOULD OWN NEARLY 31% OF THE MARKET. BAYER AND MONSANTO ESTIMATE THEIR COMBINED SALES AT NEAR 26 BILLION DOLLARS ($25.92 BILLION USD) BASED ON 2015 SALES. HOWEVER THE BIGGEST STICKING POINT MAY BE IN COTTON. THE COMBINED COMPANY WOULD OWN 70% OF TOTAL MARKET SHARE. TYNE MORGAN JOINS US NOW WITH A CLOSER LOOK AT WHAT MIGHT NEED TO DIVESTED TO SATISFY REGULATORS. THANKS, CLINTON. AS YOU MENTIONED THIS ENTIRE DEAL IS PENDING REGULATORY APPROVAL, WHICH COULD BE THE LARGEST HURDLE THESE COMPANIES NEED TO OVERCOME. BAYERS SAYS IT WILL NEED TO FILE IN 30 COUTNRIES, INCLUDING MAJOR ONES LIKE THE U.S., EU,. CANADA AND BRAZIL. NOW, AS FAR AS WHAT WILL NEED TO BE DIVESTED, BAYER'S CEO JOKED ON WEDNESDAY SAYING THE OVERLAPS ARE SO OBVIOUS THEY DIDNT' EVEN NEED TO COMMENT ON IT. BUT MONSANTO CEO HUGH GRANT SAYS THERE ISN'T MUCH. THE UNIQUE ASPECT TO THIS DEAL IS THE OVERLAPS ARE MINIMAL. AND WHEN YOU LOOK AT IT FROM THAT PERSEPCTIVE, IMAGINE THE SCIENCE BUSINESS, BAYER IS EXCELLENT IN CHEMISTRY AND HAS A PIPELINE IN CHEMISTRY, SO WHEN YOU SKETCH THAT OUT ON A PIECE OF PAPER, THE OVERLAPS ARE REALLY VERY SMALL. COMPARED TO OTHER TRANSACTIONS THAT WE CONSIDERED>
OVERLAPS:
SO,WHAT COULD THESE OBVIOUS OVERLAPS BE? AS OUR PARTNERS AT AGWEB ARE REPORTING SPECULATORS SAY CHEMISTRY IS ONE. SINCE IN 2015, MONSANTO SAY 1 POINT 9 BILLION IN GROSS PROFITS FROM HERBICIDES, MAINLY ROUNDUP, BAYER MAY BE FORCED TO DROP ITS GLUFOSINATE CHEMISTRY, WHICH INCLUDES THE BRANDS LIBERTY AND LIBERTYLINK. CLINTON MENTIONED COTTON, WHICH SOME SPECULATORS SAY COULD BE THEIR LARGEST HURDLE.. MONSANTO BECAME THE LARGEST U-S COTTONSEED COMPANY IN 2007 WHEN THEY ACQUIRED DELTA AND PIN LAND. THAT FORCED THEM TO SELL THEIR STONEVILLE BUSINESS TO WHO ELSE BUT BAYER. TODAY, MONSANTO HAS 31 PERCENT OFTHE COTTON MARKET SHARE, WHILE BAYER'S FIBERMAX AND STONEVILLE BRANDS HAVE A COMBINED 39 PERCENT. SO, ONE OR MORE OF THOSE BRANDS WILL NEED TO BE SOLD. ALSO, CLINTON, VEGETABLE SEEDS AND CANOLA COULD BE OTHER AREAS TO DIVEST. THANKS TYNE. IN OTHER NEWS, TUESDAY TRADE OFFICIALS ANNOUNCED PLANS TO FILE COMPLAINTS AGAINST CHINA FOR ITS SUBSIDIES IN THE CORN, WHEAT AND RICE MARKETS. MEANWHILE, INDIA IS ASKING THE U.S. TO DROP ITS PLANS FOR $450 MILLION IN RETALIATORY PENALTIES FOR NON-COMPLIANCE ON A 2015 WTO RULING REGARDING POULTRY IMPORTS.
INDIA BANNED U.S. POULTRY SEVERAL YEARS AGO OVER CONCERNS ABOUT AVIAN INFLUENZA. THE U.S. ARGUED TO THE WTO THAT AMERICA HADN'T HAD AN OUTBREAK OF HIGHLY PATHOGENIC AVIAN INFLUENZA SINCE 2004. WHILE INDIA HAD 90 SUCH OUTBREAKS BETWEEN 2004 AND 2014. THE WTO AGREED BUT INDIA HASN'T REVERSED THE BAN...LEADING THE U.S. TO ITS DECISION TO ENFORCE 450 MILLION DOLLARS IN PENALTIES. CROP COMMENTS IS POWERED BY RESICORE HERBICIDE FOR CORN, FROM DOW AGROSCIENCES.
CROP COMMENTS:
FROM THE BOARDROOM TO THE FARM FIELD, LETS CHECK GET TODAY'S CROP COMMENTS FROM METEOROLOGIST MIKE HOFFMAN. GOOD MORNING CLINTON. A COTTON GROWER IN MCLENNAN COUNTY TEXAS IS QUITE HAPPY WITH THIS YEARS OUTPUT. POSTING ON AGWEB, HE SAYS EVEN WITH CRAZY WEATHER THIS YEAR, THIS DRYLAND FIELD LOOKS TO HAVE THREE BALE COTTON ON IT. BACK IN THE CORNBELT, A FARMER FROM POSEY COUNTY, INDIANA SAYS THIS CROP ISN'T WHAT EVERYONE IS PREDICTING. HE SAYS HIS FIELDS ARE OFF 15 PERCENT FROM THE PAST TWO YEARS. HE'S SEEING POOR STALK AND GRAIN QUALITY. NOW HERE ARE SOME HOMETOWN TEMPS.
TEASE:
WHEN WE COME BACK, WE'LL TAKE A LOOK AT THE ETHANOL INDUSTRY AND ITS MARKET IMPACT ON GRAIN PRICES. AND LATER, ORDER UP A HOT SLICE OF PIE--MADE WITH MINIMAL HELP FROM HUMAN HANDS. ROBOTS TAKING ON THE PIZZERIA.
AGRIBUSINESS:
HERE AT THE AGRIBUSINESS DESK WE HAVE RICH NELSON ALLENDALE INCORPORATE. RICH LET'S TALK ABOUT THAT ETHANOL BECAUSE IT REALLY THAT'S BEEN A PRETTY, I GUESS, A GOOD USER OF OUR GRAINS AND CREATOR OF DEMAND FOR US. IN FACT I HEARD SOMEONE SAY THE OTHER DAY THAT THE QUICKEST WAY TO GET RID OF TWO MILLION EXTRA BUSHELS, UH TWO BILLION EXTRA BUSHELS, IS THRU ETHANOL. GOOD POINT HERE. SO THEY TAKE FORTY PERCENT OF OUR USAGE YES. RIGHT. NO DOUBT IT'S AN EXCITING TIME FRAME AND ALSO WE PUT IN BRAND NEW RECORD HIGHS OF PRODUCTION JUST A COUPLE WEEKS AGO IN TERMS OF THIS MOST RECENT DISCUSSION POINT HERE, I'M NOT CONCERNED AS MUCH ABOUT THE ETHANOL PRODUCTION RATE AS I AM ABOUT THE CORN FOR ETHANOL CONVERSION FACTOR. OK EXPLAIN.
NATIONAL WEATHER:
WELCOME BACK TO AGDAY HERE WITH METEOROLOGIST MIKE HOFFMAN. MIKE AS WE LOOK AT THE WEATHER MAP A TROPICAL SYSTEM WHERE DID THAT COME FROM? WELL WE TALKED ABOUT YESTERDAY. IT'S PROBABLY NOT BE COMING ONE BUT RIGHT IS IT CROSSED LAND INTO THE FLORIDA THEY NAMED IT A JULIA, SO WE HAVE A TROPICAL STORM SITTING RIGHT OFF THE SOUTHEAST COAST. NOW THE BIGGEST FACTOR FROM JULIA IS GOING TO BE THE HEAVY RAINS. THE GEORGIA, SOUTH CAROLINA COASTLINES BUT YOU'RE ALSO GOING TO SEE SOME VERY GUSTY WINDS GALE FORCE AND PERHAPS EVEN TROPICAL STORM FORCE WINDS.
REGIONAL WEATHER:
THAT'S A LOOK ACROSS THE COUNTRY NOW LET'S TAKE A LOOK AT SOME LOCAL FORECASTS. FIRST OF ALL WINNEMUCCA NEVADA TODAY LOTS OF SUNSHINE AND COMFORTABLE HIGH OF SEVENTY THREE DEGREES. TULSA OKLAHOMA WARM AND HUMID BUT A COUPLE OF SHOWERS OR THUNDERSTORMS HIGHER ON NINETY AND ROCHESTER NEW YORK COOL WITH A GOOD DEAL OF SUNSHINE HIGH ROUND SIXTY EIGHT.
TEASE:
OUR DROVERS TV REPORT IS COMING UP NEXT INCLUDING ANOTHER TOUGH TREND FOR CATTLE FEEDERS. AND LATER, TAKING THE PIZZA SHOP HIGH TECH. A SILICON VALLEY STARTUP AIMS TO USE ROBOTS INSTEAD OF HUMANS TO CREATE THE PERFECT PIE.
DROVER’S TV:
ON DROVERS TV, AFTER A RUN OF IMPROVING MARGINS, THE NATION'S FEEDLOTS ARE BACK IN THE RED. THE LATEST STERLING PROFIT TRACKER SHOWING THAT CATTLE FEEDERS FACE PER HEAD LOSSES OF 202 DOLLARS. MUCH OF THAT DROP PUSHED BY LOWER CASH PRICES--NOW 13 DOLLARS LOWER THAN A MONTH AGO. LAST WEEK THE FIVE AREA CRASH PRICES WAS 105 PER HUNDRED. OUR PARTNERS AT DROVERS SAY, YEAR-TO-DATE BEEF PRODUCTION IS UP 5% AND WILL CONTINUE TO POST MONTHLY YEAR-OVER-YEAR GAINS FOR THE REST OF THIS YEAR AND IN 2017. FEEDLOTS ARE ALSO EXPECTING INVENTORIES TO KEEP CLIMBING FOR THE NEXT 16 TO 20 MONTHS. ADDING TO THE INCREASE IN BEEF PRODUCTION IS CARCASS WEIGHT DATA THAT SHOWS STEERS 4 POUNDS HEAVIER THAN LAST YEAR AND HEIFERS 8 POUNDS HEAVIER. WHILE INCREASES IN BEEF PRODUCTION WILL WEIGH ON MARKET PRICES, U.S. BEEF EXPORTS CONTINUE TO SHOW IMPROVEMENT DURING 2016. JULY BEEF EXPORT VOLUME WAS UP 8%, AND STERLING MARKETING FORECASTS AN 8% OVERALL GAIN FOR THIS YEAR. ANOTHER 6% GAIN IS EXPECTED DURING 2017.
TEASE:
WHEN AGDAY RETURNS WE'LL TAKE A LOOK AT WHAT ONE COMPANY HOPES IS THE FUTURE OF PIZZA PREPARATION. ROBOTS IN THE KITCHEN, NEXT.
IN THE COUNTRY:
LEARN MORE TODAY AT YOUR LOCAL KUBOTA DEALER. ROBOTS ARE POPPING UP EVERYWHERE--FROM NEW AUTONOMOUS ROBOTS TO ROBOTIC MILKERS IT SEEMS THE FUTURE IS CERTAIN TO INCLUDE SELF DRIVEN DROIDS. AT THE FARM AND ON THE TABLE. THIS SILICON VALLEY START UP IS WORKING TO DEVELOP ROBOTS AND SOFTWARE TO CREATE PIPING HOT PIZZA. SO FAR ROBOTS CAN ADD THE SAUCE --SPREAD IT --AND PUT PIES IN THE OVEN. THEY SAY THAT SOON THESE ROBOTS WILL PREP THE DOUGH --ADD CHEESE AND TOPPINGS --TAKE PIZZAS OUT OF THE OVEN --CUT THEM INTO SLICES --AND PUT THEM IN BOXES.
CLOSING:
I'M CLINTON GRIFFITHS -FRIDAY -AGDAY CONTINUES ITS INDEPTH COVERAGE OF A PROPOSED MERGER BETWEEN BAYER AND MONSANTO. PLUS FROM FARM JOURNAL COLLEGE, WE EXAMINE MULTI-HYBRID PLANTER TECHNOLOGY. WHAT ARE THE BENEFITS? TUNE IN WEEKDAYS RIGHT HERE ON AGDAY.

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