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3 Big Things Today, December 20

Soybeans Lower Overnight on Rain in Argentina; Mosaic Buys Vale's Fertilizer Business.

1. Soybeans Fall Overnight as Rain in South America Boost Prospects

Soybean futures fell in overnight trading as favorable weather in South America boost crop prospects.

Rain fell in the central and northwest state of Buenos Aires, far southern Cordoba, and southwestern Santa Fe in Argentina, Commodity Weather Group said in a report. More rain is expected this week, though temperatures likely will be high.

Weekend rains also fell in western Brazil, including Mato Grosso, and much of the country will see precipitation in the next two weeks.

Soybean futures for January delivery fell 9¾¢ to $10.11¾ a bushel on the Chicago Board of Trade. Soy meal declined $1.90 to $403.60 a short ton, and soy oil lost 0.42¢ to 36.14¢ a pound.

Corn futures for March delivery fell a penny to $3.52¼ a bushel in Chicago.

Wheat futures for March delivery declined 1¼¢ to $4.03¾ a bushel overnight. Kansas City wheat lost 1¾¢ to $4.12¼ a bushel.


2. Fertilizer Company Mosaic Purchases Vale’s Fertilizer Business for $2.5 Billion

Fertilizer company The Mosaic Co. has said it will acquire Vale SA’s fertilizer business, including several facilities in Brazil, in the latest move to consolidate within the agriculture industry.

The deal, if it is approved, is worth about $2.5 billion and will include five phosphate rock mines, four chemical and fertilizer production facilities, and one potash facility in Brazil, Mosaic said. Vale's fertilizer business has the capacity to produce 4.8 million metric tons of phosphate and 500,000 tons of potash.

Mosaic also will acquire Vale’s 40% economic interest in the Miski Mayo phosphate mine in Peru and its potash project at Kronau, Saskatchewan, Canada. It has the option to include Vale's Rio Colorado, Argentina, potash project at closing as part of the transaction.

The transaction will be funded with $1.25 billion in cash, which the company plans to raise by issuing debt and 42.3 million shares of its common stock that will be sent to Vale. If the acquisition goes through, Vale’s shares will represent about 11% of all of Mosaic’s outstanding shares.

The deal would give Mosaic a "tremendous opportunity" to capitalize on the Brazilian agricultural market, Mosaic Chief Executive James C. O’Rourke said in a statement.

“We see this as an ideal strategic fit for Mosaic,” he said. “We have proven expertise in phosphate mining and manufacturing, a strong record of successful acquisition integration, and extensive relationships and experience in Brazil.”

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3. Warmer Weather Returns to Midwest, Southern Plains After Damaging Cold

It’ll be a relative heat wave in the Midwest today as temperature again climb back into the 30s – that’s the positive 30s – starting today.

The weather in parts of Iowa and Illinois will be pleasant by winter standards, reaching into the mid-30s this afternoon, according to the National Weather Service.

In the Southern Plains where as much as half of winter wheat was harmed by the extremely cold temperatures the past few days, according to Commodity Weather Group, temperatures will be in the upper 50s, eliminating any further threat.

“Winterkill damage incurred in half of Plains wheat on Sunday,” CWG said in a report. A cold push next week is not strong enough for further damage. The most severe cold occurred in snow-protected areas of Midwest wheat overnight, with spotty damage in west-central Illinois.

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