Morning Market Wire

Wednesday July 14, 2021                                               By: Eric Peterson

Corn was two sided overnight with a downside bias headed into 7am.  Both the September and December contract traded below their 50 day moving averages.  The December contract is staying within a $5.10 to $5.45 range.  Look for mostly quiet trade today as overall U.S weather and crop conditions remain mostly favorable.          

Soybeans were also two sided overnight with many contracts seeing near a 20 cent range.  Soybeans continue to move higher on tight stocks and strong vegoil markets.  The critical weather for soybeans is still ahead as August weather seems to make or break the soybean crop.  The crop still has a chance for decent yield with the right weather.  Look for higher trade from strength in related vegoil markets.    

Spring wheat traded higher overnight on dryness in the Northern Plains and Canadian Prairies, along with disappointing yields in early harvest reports in Russia.  Some spring wheat areas are in really bad shape while others aren’t so bad with an ok crop expected.  Look for strength today on continued weather concerns.       

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$14.10$13.80$13.61
CZ21 Oct21$5.90$5.65$5.43
MWZ21 Dec21$8.90$8.75$8.51
Old Crop PremiumNew Crop TargetTrigger Date
0.569.00 MWZ2111/19/21
0.3115.00 SX2110/22/21
0.206.00 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

CHS reports $273.6 million in fiscal 2021 third-quarter net income

Closeup of green soybean rows

Strongest third-quarter net earnings since 2014; $50 million of additional owner equity redemptions authorized in 2021

CHS Inc. released results for its fiscal third quarter ended May 31, 2021. The company reported net income of $273.6 million compared to $97.6 million in the third quarter of fiscal year 2020, an increase of 180.2%. Significant year-over-year earnings growth in all business segments — Energy, Ag and Nitrogen Production — and Corporate and Other businesses each contributed to the increase.

Reflecting strong company performance, the CHS Board of Directors has approved $50 million in additional equity redemptions to member cooperatives and individual owners since the December 2020 CHS Annual Meeting. The increase is incremental to $33 million in approved equity redemptions announced at the 2020 annual meeting, for a total of $83 million in planned owner equity redemptions in fiscal 2021. A distribution of $30 million in cash patronage was also made to owners in early calendar 2021, based on business transacted with CHS in fiscal 2020.

“Robust performance across CHS resulted in a very strong third quarter,” said Jay Debertin, president and CEO of CHS Inc. “Strong global demand in agricultural markets and the hard work we have been doing to gain efficiencies across our supply chain led to higher volumes in nearly every business area, significantly improving our Ag segment earnings compared to the prior year’s third quarter.

“We also are seeing increasing momentum in pandemic recovery as restrictions ease and vaccination efforts progress, which has had a favorable impact on our Energy segment results and overall performance.”

Fiscal 2021 third-quarter highlights

  • Revenues of $10.9 billion grew 50.9% from $7.2 billion in the third quarter of fiscal 2020.
  • Earnings were up by more than 40% across all business segments (and Corporate and Other businesses) compared to both the second quarter of fiscal 2021 and the third quarter of the previous fiscal year.

Energy segment results

  • Improved refined fuels margins resulted in fiscal 2021 third quarter margin gains, as did the absence of a $42.0 million noncash charge to reduce refined fuels inventories to their market value that impacted the prior year’s third quarter, but did not reoccur in the third quarter of fiscal 2021.
  • Improved margins in the company’s refined fuels business were partially offset by significantly higher prices of renewable energy credits that had a negative impact on margins of approximately $82.0 million, less favorable pricing on heavy Canadian crude oil and lower propane margins due to the reversal of hedging gains recognized during the prior year.
  • Overall, revenues increased by 24.2% and earnings increased by $59.6 million over the fiscal 2021 second quarter, reflecting volume and margin recovery from the effects of the pandemic.

Ag segment results

  • Strong global demand drove commodity prices higher, and improved trade relations between the United States and foreign trade partners led to continued higher volumes for grain and oilseed, which significantly improved Ag segment earnings compared to the prior year’s third quarter.
  • Higher overall margins were partially offset by mark-to-market losses for certain processing and food ingredients products, which the company expects to reverse over time.
  • Lower volumes of feed and farm supplies were partially offset by increased volumes for agronomy products, stemming from stronger demand due to favorable weather conditions, compared with the previous year’s third quarter.

Other focus areas

  • Nitrogen Production segment earnings increased in the quarter due to higher income attributed to increased sale prices of urea and urea ammonium nitrate.
  • Favorable market conditions for edible oils and a recovery in sales volumes compared to earlier in the pandemic drove significantly increased income through the company’s investment in Ventura Foods, LLC.
  • Focused cost-reduction initiatives, launched in fiscal 2021, continued to gain traction in reducing year-to-date marketing, general and administrative expenses.
  • The company began to bring employees back to its global offices in full or hybrid capacities as pandemic restrictions lifted. The costs of these activities are not expected to be material.

For the nine months ended May 31, 2021, CHS reported net income of $305.0 million versus $401.0 million for the same period in fiscal 2020.

“We are encouraged by overall improvements in the global economy and the positive traction we’re gaining at CHS with initiatives focused on working more efficiently and effectively throughout the enterprise,” said Debertin. “We are optimistic conditions will continue to improve over the next 12 months. The resilience of our employees and their commitment to our owners and customers has been inspiring and we look forward to the future and continued shared success.”

FY2021 Quarter 3 CHS Inc. earnings statement by segment
*Earnings is defined as income (loss) before income taxes

This document and other CHS Inc. publicly available documents contain, and CHS officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on CHS current beliefs, expectations and assumptions regarding the future of its businesses, financial condition and results of operations, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of CHS control. CHS actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause CHS actual results and financial condition to differ materially from those indicated in the forward-looking statements are discussed or identified in CHS filings made with the U.S. Securities and Exchange Commission, including in the “Risk Factors” discussion in Item 1A of CHS Annual Report on Form 10-K for the fiscal year ended August 31, 2020, and Item 1A of Part II of CHS Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2021. These factors may include: changes in commodity prices; the impact of government policies, mandates, regulations and trade agreements; global and regional political, economic, legal and other risks of doing business globally; the impact of the ongoing COVID-19 outbreak or other similar outbreaks; the impact of market acceptance of alternatives to refined petroleum products; consolidation among our suppliers and customers; nonperformance by contractual counterparties; changes in federal income tax laws or our tax status; the impact of compliance or noncompliance with applicable laws and regulations; the impact of any governmental investigations; the impact of environmental liabilities; actual or perceived quality, safety or health risks associated with our products; the impact of seasonality; the effectiveness of our risk management strategies; business interruptions and casualty losses; the impact of workforce factors; our funding needs and financing sources; changes in the method of determining, or the replacement of, LIBOR; technological improvements that decrease the demand for our agronomy and energy products; our ability to complete, integrate and benefit from acquisitions, strategic alliances, joint ventures, divestitures and other nonordinary course-of-business events; security breaches or other disruptions to our information technology systems or assets; the impact of our environmental, social and governance practices; the impairment of long-lived assets; and other factors affecting our businesses generally. Any forward-looking statements made by CHS in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise except as required by applicable law.

Morning Market Wire

Thursday July 8, 2021                                               By: Eric Peterson

Corn opened five cents higher but turned lower overnight on favorable weather and weakness in outside markets.  U.S weather remains mostly favorable as cooler temps are helping as the U.S corn crop heads towards tasseling and pollinations.  Look for lower trade today on weakness in outside markets.      

Soybeans were weaker overnight on favorable weather for the U.S Midwest.  Prices drew additional pressure from spillover weakness from the energy markets.  Technical support is below at the 100 day moving average of $13.09.  Look for mostly lower trade today on weather and spillover weakness from the energy markets.    

Spring wheat closed a fraction lower with the September contract closing ten cents off the session high.  The market was higher on declining crop conditions, a weaker U.S dollar and poor crop conditions in both the U.S and Canadian Prairies.     

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct 21$13.75$13.25$13.13
CZ21 Oct 21$5.90$5.65$5.25
MWZ21 Dec 21$8.40$8.25$7.96
Old Crop PremiumNew Crop TargetTrigger Date
0.499.00 MWZ2111/19/21
0.2214.60 SX2110/22/21
0.206.00 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

Morning Market Wire

Wednesday July 7, 2021                                               By: Eric Peterson

Corn opened weaker last night but traded two sided with the December contract trading a thirteen cent range.  Yesterday’s condition report had the crop unchanged at 64% good/excellent, this compares to 71% this time last year.  Look for choppy trade today on improving weather conditions and spillover strength from soybeans and crude oil.    

Soybeans rebounded slightly overnight after yesterday’s 94 cent sell off.  Since some soybean oil contracts closed down limit yesterday the whole soybean complex will have expanded limits today.  Soybeans limit will be $1.50 today.  Yesterday’s crop condition report had soybeans 1% lower at 59% good/excellent, this compares to 71% last year at this time.  Look for mostly higher trade today on declining crop conditions. 

Spring wheat was mixed overnight with the September contract trading an eleven cent range.  The USDA put U.S spring wheat conditions at 16% good/excellent, down from 20% last week and 70% last year.  Winter wheat harvest is at 45% complete.  Look for higher trade on declining spring wheat conditions and slower harvest progress than expected.   

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$13.75$13.25$13.04
CZ21 Oct21$5.90$5.65$5.32
MWZ21 Dec21$8.40$8.25$7.94
Old Crop PremiumNew Crop TargetTrigger Date
0.499.00 MWZ2111/19/21
0.2214.60 SX2110/22/21
0.206.00 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

Morning Market Wire

Wednesday June 30, 2021                                               By: Eric Peterson

Corn traded lower overnight with the December contract closing just above the session low of $5.33.  The market is facing pressure ahead of today’s long anticipated acreage and quarterly stocks report.  Many analysts are predicting that acres will increase from the prior report in March.  Today’s report is expected to show around 93.8 million acres of corn planted this year, which compares to 91.14 reported in March.  Look for mostly weaker trade ahead of the report. 

Soybeans traded lower overnight in light volume as the market prepares for today’s report.  The average acreage estimate on today’s report is 88.995 million up form the 87.6 million reported in March.  Look for weaker trade heading into today’s report. 

Spring wheat was lower overnight as the market has appeared to have taken a correction after hitting fresh contract highs yesterday.  The 6-10 day forecast looks to be wetter for the Northern Plains, potentially providing them with much needed rain.  Look for weakness ahead of the report. 

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$13.75$13.25$13.04
CZ21 Oct21$5.90$5.64$5.35
MWZ21 Dec21$8.40$8.25$7.93
Old Crop PremiumNew Crop TargetTrigger Date
0.499.00 MWZ2111/19/21
0.2214.60 SX2110/22/21
0.206.00 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

Keep your rural road safe

June is National Safety Month. CHS and Nationwide are proud to share a partnership focused on safety. The following information is provided by Nationwide, the #1 farm and ranch writer in the U.S.*

Nationwide logo

Safely navigating large agricultural equipment over rural roads to and from the fields is a challenge for even the best drivers. Nationwide reminds farmers to consider the following rules on the safe operation of equipment to help reduce the risk of motor vehicle collisions.

(more…)

Morning Market Wire

Wednesday June 23, 2021                                               By: Eric Peterson

Corn two sided overnight with the December contract trading a nine cent range overnight.  The market is weighting recent rains and the upcoming forecasted rains against a crop that continued to decline in ratings.  Technically, the December contract sits between the 50 day moving average of $5.63 and its 100 day moving average of $5.16.  Look for mostly consolidated trade ahead of next weeks report.     

Soybeans traded lower overnight with the November contract closing at the low end of the range at $12.99.  In comparison to the major price swings we saw last week and to begin this week, soybeans have traded in a narrow range over the past two sessions.  Look for prices to remain rangebound as the market looks for direction in next week’s report.   

Spring wheat was higher overnight as Minneapolis wheat is once again the leader in the wheats as conditions continue to worsen.  Reports are surfacing that spring wheat yield potential could drop as low as 20 bpa if the growing region doesn’t receive rains shortly.  Look for strength today as the market is currently pushing up against key resistance, and if broken, there is a lot room for prices to run.                       

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$13.75$13.25$12.99
CZ21 Oct21$5.90$5.65$5.35
MWZ21 Dec21$8.40$8.25$7.91
Old Crop PremiumNew Crop TargetTrigger Date
0.558.50 MWZ2111/19/21
0.3014.60 SX2110/22/21
0.206.40 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

Morning Market Wire

Monday June 21, 2021                                               By: Eric Peterson

Corn traded sharply lower overnight following the news of heavy rains across Iowa, Illinois, and Indiana.  After the sell off last week, corn futures have stabilized and found strong support that will need to hold in order for prices to mount a come back this week.  Look for choppy trade today as price action is largely dependent on the weather forecasts.   

Soybeans, like corn were lower the entire night.  The rains over the weekend and forecasted rains for the upcoming week put some of the drought panic at ease.  November soybeans are currently at key technical support of $12.87.  Look for slightly lower trade today as futures are at the mercy of soy oil and weather forecasts. 

Spring wheat was lower to start the week as pressure from corn and soybeans is likely a large contributor to the weakness.  Spring wheat areas continue to deteriorate as the northern plains have experienced severe heat with very little moisture.  Look for slightly lower trade today following the weakness in the corn market.                     

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$13.75$13.25$12.88
CZ21 Oct21$5.90$5.65$5.47
MWZ21 Dec21$8.25$7.85$7.53
Old Crop PremiumNew Crop TargetTrigger Date
0.358.50 MWZ2111/19/21
0.3014.60 SX2110/22/21
0.256.40 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

Morning Market Wire

Thursday June 17, 2021                                               By: Eric Peterson

Corn closed twenty two cents lower this morning just off the overnight low of $6.50.  Rain in the forecast for the corn belt as well as a sharply higher dollar is accredited for the selloff overnight.  The European model has more rain moving into the eastern corn belt in the 6-10 day forecast. Look for lower trade today as the July contract test the 50 day moving average. 

Soybeans are lower once again following the weakness in the soyoil market.  Soyoil closed limit down in at least the 2 front months yesterday.  Soybeans continue to follow the weather market and also feel pressure from concerns about potential lower biofuel targets.  July soybeans are trading below their 100 day moving average for the first time in nearly a year.     

Spring wheat traded two sided overnight with the July contract trading nineteen cent range.  Day 1 of the Kansas Wheat Commission’s Harvest Report indicates expectations for above average crops with 50 bushel per acre yields and 60+ pound test weights.  Look for lower trade today following the weakness in the corn and soybean markets.          

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$13.75$13.50$13.07
CZ21 Oct21$6.00$5.75$5.49
MWZ21 Dec21$7.97$7.85$7.57
Old Crop PremiumNew Crop TargetTrigger Date
0.498.50 MWZ2111/19/21
0.3014.60 SX2110/22/21
0.256.40 CZ2111/19/21

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

Morning Market Wire

Wednesday June 16, 2021                                               By: Eric Peterson

Corn traded higher overnight with the July contract closing at the session high of $6.76.  The market found some support after yesterdays’ sell off.  The latest forecasts look drier, although there are chances of storms tonight and tomorrow in the Midwest.  Look for slightly higher trade today as we bounce off technical support. 

Soybeans traded lower overnight on improving conditions and softening demand.  Technical support for November soybeans is below at the 50 day moving average of $13.60 with resistance at $14.27.  Soybean weather is the same as corn but overall, June weather doesn’t mean as much for soybeans.  Look for slightly lower trade today.   

Spring wheat traded higher overnight as North Dakota dryness remains a major concern.  Harvest reports from SW Kansas are coming in around 9.5-11 protein with yields from 62-64 bushels per acre.  Look for slightly higher trade today as a rising world wheat production limits any upside.                    

Compass contracts are a great way to market your new crop by pricing grain daily at a fixed higher futures price.  Below are today’s closing bids for two types of compass contracts we offer.  If you would like to make an offer or would like more information please give me a call at the office.  (All compass contracts have a 48 hour probation period.)

Price Builder BonusDaily Price PlusFutures at 8:00am
SX21 Oct21$14.15$13.91$13.68
CZ21 Oct21$6.15$6.00$5.79
MWZ21 Dec21$7.97$7.85$7.66

Any information, materials and opinions (together, “CHS Materials”) presented by CHS to the recipient of such CHS Materials, whether in written or oral form, is for general information purposes only and does not constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.  CHS makes no warranties, representations, or undertakings, whether express or implied, about any CHS Materials (including, without limitation, any as to the quality, accuracy, completeness, or fitness for any particular purpose of any CHS Materials). Recipient agrees that CHS shall not be liable to recipient relating to or resulting from the use of any CHS Materials or any inaccuracies or errors therein or omissions therefrom.

© 2021 CHS Inc.