In its third-quarter earnings release, the US-based seed and chemicals giant Monsanto has said it can see the “early signs of recovery” in the overall agriculture cycle following three years of low grain prices.

Despite these recovery signs, Monsanto revised downwards its full-year profit forecast by 5% to the lower end of its original target. Despite third-quarter sales remaining relatively flat at $1.6bn, Monsanto reported a near 40% drop in profits to $717m, with the group blaming industry headwinds including the uncertainty created by the glyphosate licencing issue in the EU for the poor performance.

Monsanto chief executive Hugh Grant also noted that the group was in continued negotiations with Bayer after the German chemical and seed giant had made a $62bn takeover offer for Monsanto in May. Monsanto’s board of directors initially dismissed the offer saying it was “incomplete and financially inadequate”.

However, talks have continued over a deal that would see a further concentration of power in the seeds and agro-chemical industry.