The $65bn offer beats the previous bid of $62bn.
Some Bayer investors have said the bid is too much.
Shareholders in Monsanto warned Bayer would have to increase the bid.
Monsanto said talks were "constructive".
Dow Chemical and DuPont announced a $130bn merger late last year. ChemChina is planning to acquire Switzerland’s Syngenta for $44bn, and PotashCorp, the world’s largest potash supplier, is in merger talks with rival Agrium over creating a near-$30bn fertiliser giant.