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3 Big Things Today, August 31

Soybeans Lower on More Strong Yield Forecasts; Mergers and Acquisitions Heating Up Again.

1. Soybeans Decline as Allendale Forecasts Large Crop

Soybeans were lower in overnight trading on signs that the size of the crop likely won’t shrink much between now and harvest.

Allendale, the Chicago commodity brokerage, pegged bean yields at 48.5 bushels an acre in its annual survey of producers and production at 4.03 billion bushels. That compares with the Department of Agriculture’s estimate of 48.9 bushels an acre and output of 4.06 billion bushels.

Corn production is estimated at 14.9 billion bushels on yields of 172.6 bushels an acre, just below USDA’s outlook for 15.2 billion bushels on yields of 175.1 bushels an acre, according to Allendale.

Corn and wheat were little changed.

Soybeans for November delivery declined 7¢ to $9.43¾ a bushel on the Chicago Board of Trade, while soy meal futures for December delivery fell $1.90 to $306.80 a short ton, and soy oil lost 0.29¢ to 32.85¢ a pound.

Corn futures for December delivery fell ¼¢ to $3.15½ a bushel.

Wheat futures for December delivery declined ½¢ to $3.91¾ a bushel overnight in Chicago, while Kansas City futures added ¾¢ to $3.97½ a bushel.


2. Mergers and Acquisitions Heating Up Again in Hot Ag Market

Canada's Agrium and Potash Corp of Saskatchewan said yesterday they were in talks to merge to create a fertilizer giant, the latest in a series of mergers and acquisitions in the agriculture sector.

The companies said in separate statements that the talks were, thus far, only preliminary, and the deal, if done, would be a merger of equals. Their combined value now tops $25 billion.

Any transaction would bolster the companies’ standing in the ag world, which has softened due to low prices for corn, beans, and wheat, which earlier this week fell to the lowest level in 10 years.

Agrium and Potash weren’t the only ones in a merging mood yesterday, as Bunge North America (the operating arm of Bunge Limited) said it had reached an agreement to secure a controlling interest in Grupo Minsa, a Mexican producer of corn flour.

Bunge will take control of four mills in Mexico and two in the U.S. that have a combined annual processing capacity of more than 700,000 metric tons and makes branded corn flours and mixes for tortillas and other goods. The deal, which is expected to enhance Bunge’s global food and ingredients business, is expected to close early next year.

Bunge is fairly new to the U.S. corn masa market, entering in early 2014 with the purchase of its first mill in Worthington, Indiana. This will be the company’s first foray in the Mexican corn masa market.

The deals would be the latest in agricultural M&A, which seems to be all the rage as of late. ChemChina is in the process of taking over Syngenta, Dow and DuPont are merging, then splitting into three separate companies, and Monsanto and Bayer have been trying to marry, though they face stiff regulatory hurdles.  

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3. Rainfall Expected in Parts of Illinois, Nebraska

Rain, not surprisingly, is in the forecast for parts of central and southern Illinois and Indiana today, according to the National Weather Service.

A slow-moving front may bring precipitation to the region late this afternoon into the evening, the NWS said in a report on Wednesday morning. Rainfall is expected to be locally heavy in areas.

Thunderstorms also are expected for much of southern Nebraska into northern Kansas today, which may result in heavy rain in some counties. A flood warning is in effect along some tributaries in the region, the NWS said.

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