Monsanto Is On a Roll

For those who have been following me on The Motley Fool, Monsanto's (NYSE: MON  ) stellar third-quarter results shouldn't have come as a surprise. The excellent planting season that just ended had raised enough hopes that the company could top estimates yet again.

And the best part is that the good times should continue, as strong business in the U.S., coupled with interesting growth initiatives and robust demand from some of the world's fast-developing markets, should have Monsanto perfectly placed to enjoy a great year.

Corn, the magician
The third quarter was the most significant one for Monsanto as it coincided with the peak planting season in the United States. Warm weather encouraged farmers to plant early, and Monsanto got down to aggressive selling to make the most of the opportunity. The result -- a solid 17% jump in sales that crushed analyst estimates.

While Monsanto was treating the Street to some delectable numbers, the weather continued to bring in good news for the company. Drought conditions in the critical U.S. Midwest belt has raised fears of major damage to corn crops, pushing corn futures to a level not seen during the past nine months. Monsanto's superior seeds and traits should find more takers in a situation where higher crop prices encourage farmers to improve yields.

So the strong third quarter has actually set the base for Monsanto's full-year earnings. Although the U.S. continues to be its core business region, it will not be the only growth driver for the company in the near future.

Beyond home
Monsanto's global business has contributed almost as much to growth this year as the United States. It is particularly betting big on Latin America -- a region that is proving to be the real growth story for agro-based companies. Peer DuPont's (NYSE: DD  ) seed sales in Latin America were up a whopping 45% last year, making the company increasingly upbeat about the region. It has lined up several new products specifically for countries like Brazil, including pest-resistant soybean varieties that will be out by 2014.

Similarly, Syngenta's (NYSE: SYT  ) seed sales from Latin America climbed 40% during its last quarter, driven by a good corn and soybean season in Brazil. The company has bigger things in store with its innovative four-stack pest-resistant corn finding approval in Argentina. Syngenta is, in fact, looking beyond corn and is investing in new wheat varieties for the country as well.

How can the world's largest seed maker stay ahead? Monsanto is about to introduce its triple stack corn in Argentina next year, and is shelling out $355 million to set up a corn seed in the country. What Monsanto is perhaps most excited about is the upcoming launch of its insect-resistant soybean Intacta RR2 PRO made especially for Brazil. The company considers this product to be one of its biggest growth drivers in the nation in the years to come.

The Foolish bottom line
The company's solid performance and growth plans tell me it could be one of the best bets in the agriculture sector. Although a price very near to a 52- week high might not be the best time to buy, any dip would certainly mean an opportunity.

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