NEW YORK (AP) — Shares of food maker Monsanto Co. rose on Monday on reports that China may approve some genetically modified soybeans for importation.
THE SPARK: After meeting with China's agriculture minister, several analysts said China's agriculture minister Han Changfu indicated he would approve Monsanto's Intacta soybeans for importation. China is hosting a summit on agriculture and food. The U.S. is not attending but Brazil and Argentina are. China has made no official announcement. Monsanto declined to comment.
THE BIG PICTURE: The new soybean is nearly ready for commercialization and should be rolling out in Brazil next season and Argentina the year after. Both countries are major exporters to China. The Intacta soybean has been genetically modified to resist insects. Most corn, soybean and cotton crops grown in the United States have been genetically modified.
THE ANALYSIS: "Intacta is the key opportunity to get paid for soybeans in South America, and it is the key 2014-plus growth driver," said Morgan Stanley analyst Vincent Andrews. "China approval of Intacta may have taken place. If the case, this checks the single most important box in our Monsanto investment thesis."
He kept his Overweight rating on the stock with a $125 price target.
SHARE ACTION: Shares rose $4.47, or 4.4 percent, to $106.12 in afternoon trading, near the high end of the stock's 52-week range of $76.89 to $109.33.