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3 Big Things Today, September 15

Soybeans, Corn Slightly Higher Overnight; Bayer-Monsanto Deal Now Faces Anti-Trust Scrutiny

1. Soybeans Modestly Higher Overnight as Weather Reportedly Dry in Brazil

Corn and soybean futures were modestly higher in overnight trading as investors begin looking at dry weather in Brazil that could potentially affect the country’s second grain crop.

The weather in Brazil has reportedly turned dry since the latter part of August, which could impact the crop that’s soon to be planted. Still, rain is expected in late September, which could help improve soil moisture in the country.

Capping prices are calls for record production in the U.S. for both corn and beans. The USDA surprised everybody on Monday when it pegged soybean yields at 50.6 bushels an acre and only slightly lowered its corn-yield projection to 174.4 bushels an acre.

Corn futures for December delivery added a penny to $3.32¾ per bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery rose 3¼ cents to $9.46 a bushel in Chicago. Soy meal futures for December delivery gained 80¢ to $306.50 a short ton, and soy oil rose 0.21¢ to 32.07¢ a pound.

Wheat futures for December delivery rose 1½ cents to $4.04½ a bushel in Chicago, while Kansas City futures gained 1¢ to $4.19¼ a bushel.

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2. Bayer, Monsanto Deal Faces Close Scrutiny From Competition Regulators

Another day, another acquisition in the agriculture space – and this one’s a doozy – but it’s still a ways from completion as anti-trust regulators gear up to ensure the merger will leave enough competition in the marketplace.

After months of back-and-forth negotiations between the ag giants, Bayer finally said it would purchase Monsanto for $66 billion, or $128 a share.

“This represents a major step forward for our crop science business and reinforces Bayer’s leadership position as a global innovation-driven life science company with leadership positions in its core segments, delivering substantial value to shareholders, our customers, employees, and society at large,” Werner Baumann, chief executive officer for Bayer AG, said in a statement on Wednesday.

The deal, while approved by the company’s boards of directors, isn’t quite done yet.

Now it must undergo rigorous questioning by regulators who will try to determine whether the transaction violates anti-trust laws and eliminates too much competition from the marketplace.

Certainly there will be many regulators who believe the deal will eliminate enough competition in the marketplace to harm farmers and other end-users of Bayer and Monsanto products. The combined company last year had pro-forma sales of about $26 billion, dwarfing the joint pro-forma sales of ChemChina and Syngenta, also going through a merger at the moment, of $17 billion.

Bayer and Monsanto, for their part, said in several statements yesterday that the “real winner” will be farmers who get the benefit of two research-and-development offices, and that’s true, but regulators won’t be reading press releases.

The deal is expected to close by the end of next year.

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3. Dry Weather Persists in Ohio as Flooding Continues in Kansas, Missouri  

Rain and flooding has become commonplace in the morning weather reports as of late. Everywhere except Ohio, that is.

Much of Illinois and Indiana have received as much as six times normal precipitation in the past month, but much of the Buckeye State has received very little. Today will be no exception as little rain is forecast for the area in through the weekend, according to the National Weather Service.

A strong storm is moving through northeastern Kansas and northwestern Missouri today that’s expected to exacerbate flooding in the area. Heavy rain has caused several rivers and tributaries to flood, and more rain is on the way, the NWS said.

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