Graincorp is likely to reject US food processing giant Archer Daniels Midland Company's (ADM) second takeover bid, a market analyst says.
The new offer of $2.78 billion is marginally higher than the $2.68 billion that Graincorp, a grain marketer and malterer, rejected in November.
ADM has increased its holding in Graincorp to 19.9 per cent - after buying a five per cent stake on Monday - taking it near the 20 per cent threshold that automatically triggers a full takeover bid.
City Index chief market analyst Peter Esho says Graincorp is set to reject the latest offer from the Illinois-based global agricultural processing giant.
"My conviction is this is unlikely to be at a level to sweeten the deal," he told AAP.
"Graincorp have made it very clear the US company board undervalued the business."
Mr Esho said the economic headwinds of a strong Australian dollar would give ADM another opportunity to make new bid.
"They'll just sit and wait for Graincorp to have earnings issues," he said.
Nationals Senate leader Barnaby Joyce said a future takeover by a US company, not covered by Australian securities regulations, would be bad for local farmers.
"We're going to have another strategic monopoly," Senator Joyce told AAP.
"I have no confidence in the Foreign Investment Review Board - in past experience they always say, `Yes' and they will say yes."
But Wayne Newton, the grains president with agricultural lobby group AgForce, said foreign investment in Graincorp would be worthwhile.
"In some way it could be a good thing," he told AAP.
"It would be great if it were an Australian company that owned it, but you have to face reality.
"The steadily increasing production means you need to see more investment in that space."
Mr Newton said access to ports and information about grain supply were already at the mercy of four grain-handling oligopolies around Australia.
"Whether or not the takeover by ADM will change that, I'm not sure," he said.
The ADM offer would see it pay about $2.25 billion to buy the rest of Graincorp's shares.
The new offer is for $12.20 per Graincorp share, up from the previous offer of $11.75.
Graincorp shares closed up 38 cents at $12.32 on Tuesday.