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3 Big Things Today, September 21

Corn, Beans Lower on Profit-Taking; Senate Judiciary Committee Blasts Wave of M&A Activity.

1. Corn, Beans Lower Overnight as Investors Book Profits

Corn and soybean futures declined after investors sold contracts and booked profits amid the highest bean prices in a month.

Excessive rainfall that’s caused fungal diseases is threatening yield and slowing the harvest in some parts of the U.S., which pushed prices up the past week. While some parts of the Midwest are under storm watches and warnings, the region will be mostly dry – at least for the next day or two, according to the National Weather Service.

As much as six times normal amounts of rain have fallen in much of the region in the past 60 days, flooding fields and causing fungal diseases including sudden death syndrome in beans.

Corn futures for December delivery fell 1½¢ to $3.39 a bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery lost 3½¢s to $9.86¼ a bushel in Chicago. Soy meal futures for December delivery declined 80¢ to $312.40 a short ton, and soy oil fell 0.3¢ to 33.79¢ a pound.

Wheat futures for December delivery fell 2¢ to $4.04 a bushel in Chicago, while Kansas City futures lost 2¼¢ to $4.16¼ a bushel.


2. Wave of Mergers and Acquisitions Has Turned Into a ‘Tsunami,’ Grassley Says

Members of Senate Judiciary Committee blasted the wave of mergers and acquisitions in the agriculture industry at a hearing yesterday, saying the sheer number and size of the transactions may threaten U.S. producers.

Senator Chuck Grassley (R-IA), who is the chairman of the committee, said in prepared remarks that while consolidation in the industry isn’t new, at some point, M&A activity will take a toll on the competitiveness in the market.

Five of the what he calls the ‘Big Six’ largest biotech seed companies in the industry – Monsanto, DuPont, Syngenta, Bayer, Dow, and BASF – are going through some sort of merger or acquisition.

ChemChina is buying Syngenta, Bayer is acquiring Monsanto, and Dow and DuPont are merging, then splitting off into three separate companies. Canadian fertilizer companies Potash and Agrium said they plan to come together in a merger of equals.

“To me, it looks like this consolidation wave has become a tsunami,” Grassley said.

ChemChina’s acquisition of Syngenta is of concern because it could lead to Chinese state buyers’ purchasing only products grown using Syngenta seed, Grassley said.

The transactions, however, aren’t a foregone conclusion. They all must face antitrust regulators, who want to ensure the marketplace will be competitive, which keeps costs down for farmers. Senator Patrick Leahy (D-VT) said the M&A activity may hurt farmers’ ability to keep food on U.S. tables.

“Keeping American agriculture strong and vibrant for both farmers and consumers must remain a top priority for all of us as we review these proposed mergers,” Leahy said.

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3. Strong Storms Expected in Northern Midwest This Morning   

Flood and thunderstorm warnings are in effect for much of southern Minnesota and Wisconsin and northern Iowa this morning, according to the National Weather Service.

“Showers and thunderstorms with potentially heavy rainfall will affect portions of the Midwest on Wednesday into Thursday,” the NWS said. “Rainfall amounts of 2 to 4 inches will be possible in parts of southern Minnesota, northern Iowa, and western Wisconsin. Flash flood warnings are in effect in these locations.”

The good news, however, is that much of the rest of the Midwest should be dry until at least the weekend, according to the NWS.

Some of the precipitation from the storms hitting northern Iowa as well as southern Minnesota and Wisconsin could slide down into northern Illinois this week, but otherwise the state will be dry.

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