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3 Big Things Today, May 2

Wheat again higher overnight; Deere’s abandonment of Precision Planting a ‘Victory,’ DOJ Says

1. Wheat Futures Again Higher Amid More Reports of Storm Damage

Wheat futures were again higher in overnight trading as more reports of damage from a late-April snowstorm over the weekend roll in.

Some growers were saying that a large amount of snow – in some areas as much as a foot fell – in the southern Plains may have snapped headed hard-red winter wheat and in other areas freezing weather cut yields.

A lot of members of the Kansas Wheat Tour, which starts in earnest today, are worried about what they’ll find after the weekend weather, said Dave Green, the executive vice president of the Wheat Quality Council, which plays host to the annual event.

Wheat for July delivery added 3¾ cents to $4.59¾ a bushel overnight on the Chicago Board of Trade, and Kansas City futures surged 7¢ to $4.72¾ a bushel.

Soybeans gained 7¾ cents to $9.78 a bushel in Chicago. Soy meal rose $1.90 to $320.50 a short ton, and soy oil added 0.22¢ to 32.38¢ a pound.

Corn futures for July delivery fell ¾¢ to $3.76¾ a bushel.


2. Abandonment of Deere Acquisition of Precision Planting a Victory’ for Growers, DOJ Says

A proposed deal in which Deere would purchase Precision Planting from Monsanto, the world’s largest seed dealer, has been scrapped due to delays caused by regulatory concerns.

Mike Stern, the chief executive of Climate Corp., a subsidiary of Monsanto that runs the Precision Planting segment, says regulatory concerns have kept the sides from closing the deal and that there was no clear path moving forward.

“The delay in closing due to the Department of Justice concerns is what ultimately drove our decision to terminate our agreement to sell Precision Planting to John Deere,” Stern said.

The Department of Justice in August filed to block the sale, saying farmers would pay more to use the precision planting technology. Stern said Monsanto is still looking to move the Precision Planting business and has received interest.

Acting Attorney General Andrew Finch of the DOJ’s Anti-Trust Division called the deal’s abandonment a “victory” for growers and consumers.

“Had this acquisition gone forward, significant head-to-head competition between Deere and Monsanto’s Precision Planting – competition that has led to lower prices and more innovative products – would have been lost,” Finch said.

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3. More Rainfall on the Way as Flash Floods Continue in Much of Central Midwest

Flash floods will continue to occur as much of eastern Kansas and Oklahoma, almost all of Missouri, and the southern half of Illinois remain in a flood warning.

And it’s not over yet. Another round of rainfall is expected as a weather system moving out of the northern Rockies this morning will head toward the central Plains later, according to the National Weather Service. The low-pressure system will hit the Mississippi Valley on Wednesday and Ohio Valley on Thursday, the agency said.

The ensuing storms will spawn severe weather including thunderstorms and excessive rainfall.

“These showers and storms are expected to bring additional heavy rainfall to areas where the ground is still saturated from recent heavy rains,” the NWS said. “Thus, flash flooding will be possible for some areas. Severe thunderstorms are also possible on Wednesday across portions of the western and central Gulf Coast.”

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