Morning Market Wire

Friday November 11, 2022                                               By: Eric Peterson

Corn is starting the day slightly higher with the December contract trading eight cent range overnight.  The market found some buying support overnight as fresh news remains light.  Corn commitments as a percentage of the USDA’s target for the year sit at 26.9%, the lowest going to back to 1990.  Look for higher trade today on a strong crude oil market.       

Soybeans are double digits higher this morning, erasing the losses from Thursday.  Export sales came in at 29.2 million bushels, well above the 20.2 million needed per week to hit the USDA target.  Total commitments are close to being in line with last year.  The soybean market is expected to remain strong as South American weather remains dry.          

Spring wheat closed five cents higher this morning with the December contract trading a relatively narrow eight cent range. U.N. and Russian officials are expected to meet today to discuss the export deal extension.  The market will likely chase the headlines.  U.S wheat remains a premium to the rest of the world market but we did exceed the sales amount needed per week to hit the USDA target.   

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 November 9, 2022                                               By: Eric Peterson

Corn closed two cents lower this morning on positioning ahead of the 11am USDA report.  Many traders are expecting yield, production, and carryout to be slightly higher.  December corn has dipped toward the 200 day moving average of $6.64.  It hasn’t traded below its 200 day moving since Aug 22nd.  Look for mostly lower trade ahead of today’s report.      

Soybeans were weaker overnight on lower soybean oil and higher meal.  Weather maps for Argentina continue to trend wetter for next week which could provide some needed relief and allow planting to begin.  Soybeans are expected to remain strong on good demand and poor weather in South America.        

Spring wheat traded both sides overnight but turned lower around 7am.  Today’s report is expected to show only minor changes to the balance sheet.  France cut its wheat export forecast lower by 100,000MT.  The market is expected to remains volatile as demand is slow.    

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
SX23 Oct23$14.18$14.05$13.86
CZ23 Oct23$6.50$6.35$6.17
MWU23 Sept23$9.65$9.55$9.42
Old Crop PremiumNew Crop TargetTrigger Date
0.4511.00 MWU238/25/23
0.4515.00 SX2310/19/23
0.307.00 CZ2311/25/23

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

Corn remains slightly lower to start the week.  The November WASDE report is November 9th at 11:00am.  Private estimates of corn and soybeans production are higher ahead of Wednesday’s report.  Argentina corn planting progress is 23% complete vs. 39% last year because of a dry start to the growing season.  Look for the rangebound trade to continue.    

Soybeans were mixed overnight with support from strength in the meal and soy oil markets.  Demand remains strong on news that China has agreed to contract to buy 10mmt of soybeans, additional details were not given.  Look for mostly higher trade today as demand is good in the short term.      

Spring wheat was lower once again last night and has basically erased and any recent price gains.  The market continues to be fixated on headlines out of Russia/Ukraine.  Russia is now allowing Ukraine to export but no talk of an extension.  Look for mostly lower trade today as there seems to be very little supportive news this morning. 

Price Builder BonusDaily Price PlusFutures at 8:00am
SX23 Oct23$14.25$14.10$13.97
CZ23 Oct23$6.60$6.40$6.22
MWU23 Sept23$9.70$9.60$9.50
Old Crop PremiumNew Crop TargetTrigger Date
0.45$11.00 MWU238/25/23
0.45$15.00 SX2310/19/23
0.30$7.00 CZ2311/25/23

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 strong fiscal year 2022 earnings

Net Income of $1.7 Billion and Revenues of $47.8 Billion Exceed Previous Records

CHS Inc. reported net income of $1.7 billion for the fiscal year ended Aug. 31, 2022, compared to $554.0 million for fiscal year 2021.

Key financial drivers for fiscal year 2022 results include:

  • Consolidated revenues of $47.8 billion for fiscal year 2022 compared to $38.4 billion for fiscal year 2021, a year-over-year increase of 24%.
  • Refining margins in our Energy segment were higher and drove improved earnings due to the tightening global supply and demand landscape.
  • The CHS global grain and processing and wholesale agronomy businesses within our Ag segment benefited from strong global demand and increased margins.
  • Our equity method investments performed well, with increased CF Nitrogen earnings resulting from strong global demand for urea and urea ammonium nitrate (UAN), coupled with decreased global supply.

“We appreciate the support of our member cooperatives and farmer-owners, which enabled us to deliver a substantial increase in earnings for the fiscal year, while also helping feed people around the world,” said Jay Debertin, president and CEO of CHS Inc. “Additionally, our employees demonstrated their dedication to helping our owners and customers succeed in a turbulent year for agriculture. As a result of these collective efforts, CHS intends to return $1 billion in cash patronage and equity redemptions to our member cooperatives and farmer-owners in fiscal year 2023, reflecting the company’s financial strength and demonstrating the value of cooperative ownership.

“We are proud of our role in the cooperative system. We will continue to make investments that strengthen rural America and help our farmer-owners and customers meet the growing demand for agricultural products. Our investments in infrastructure, supply chain capabilities, people and innovation are driving operational and efficiency gains throughout our expansive network,” Debertin added. “Although economic uncertainty, logistical challenges and inflationary pressures remain, CHS is well-positioned to maximize value for our member cooperatives and farmer-owners.”

Fiscal Year 2022 Business Segment Results

Fiscal year 2022 segment results are:

Energy

Pretax earnings of $616.6 million represent a $627.1 million increase versus the prior year and reflect:

  • Higher refining margins and increased discounts on heavy Canadian crude oil processed by our refineries contributed to a significant increase in our refined fuels business income; these increases were partially offset by higher renewable energy credit costs and higher natural gas costs, as well as lower margins in our propane business.

Ag

Pretax earnings of $657.6 million represent a $359.5 million increase versus the prior year and reflect:

  • Increased margins across all our Ag segment product categories, due to strong global market demand and global supply disruptions
  • Continued favorable markets for oilseed processing, which were bolstered by robust meal and oil demand
  • Increased revenues from feed and farm supplies, despite less favorable weather during spring planting and application season

Nitrogen Production

Pretax earnings of $478.0 million represent a $357.0 million increase versus the prior year and reflect:

  • Increased earnings from our strategic investment in CF Nitrogen, primarily due to market conditions and strong demand for urea and UAN, factors that were partially offset by higher natural gas costs

Corporate and Other

Pretax earnings of $57.9 million represent a $48.9 million decrease versus the prior year and reflect:

  • Lower earnings primarily from our Ventura Foods joint venture, which experienced less favorable market conditions for edible oils

CHS Inc. (www.chsinc.com) is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, agronomy, grains and foods, CHS is committed to creating connections to empower agriculture, helping its farmer-owners, customers and other stakeholders grow their businesses through its domestic and global operations. CHS supplies energy, crop nutrients, seed, crop protection products, grain marketing services, production and agricultural services, animal nutrition products, foods and food ingredients, and risk management services. The company operates petroleum refineries and pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products.

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, 2022. 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 ongoing war between Russia and Ukraine; the impact of inflation; the impact of epidemics, pandemics, outbreaks of disease and other adverse public health developments, including COVID-19; 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 and litigation; 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, casualty losses and supply chain issues; the impact of workforce factors; our funding needs and financing sources; financial institutions’ and other capital sources’ policies concerning energy-related businesses; uncertainty regarding the transition away from LIBOR and the replacement of LIBOR with an alternative reference rate; 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, including failures or delays in achieving our strategies or expectations related to climate change or other environmental matters; 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

Friday October 28, 2022                                               By: Eric Peterson

Corn closed two cents lower overnight with the December contract trading a narrow three cent range overnight.  Technical support is at the 50 day moving average of $6.76.  The past nine sessions have traded a range from $6.74 to $6.89.  Mexico plans to reduce their corn imports from the U.S by half and look to source their needs directly from farmers in the U.S and South America.  Look for lower trade today on demand concerns.    

Soybeans were two sided overnight and turned lower early this morning.  Prices drew pressure from concerns of slowing demand after recent interest from China and Unknown.  November soybeans saw a fifteen cent range overnight with a weekly range from $13.66 to $13.97.  Look for lower trade on spillover weakness in other markets and demand concerns. 

Spring wheat was lower overnight on stronger U.S dollar and improved conditions for the U.S and Argentina wheat areas.  Recent rain events across the Southern Plains have been beneficial to the newly planted winter wheat.  Look for lower trade on strength in the U.S dollar. 

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
SX23 Oct23$13.85$13.70$13.48
CZ23 Oct23$6.60$6.40$6.19
MWU23 Sept23$9.65$9.50$9.31
Old Crop PremiumNew Crop TargetTrigger Date
0.4511.00 MWU238/25/23
0.4515.00 SX2310/21/23
0.307.00 CZ2311/25/23

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.

Power of cooperative ownership

Two people in PPE standing on top of a large blue storage bin with a CHS logo

As America’s largest farmer-owned cooperative, the cooperative model and the strength it brings to local communities is the backbone of CHS. Every October, that model is celebrated as part of National Co-op Month, which aims to spread awareness about the benefits of being part of the cooperative system and the important role cooperatives play in their communities.

(more…)

Morning Market Wire

Tuesday October 25, 2022                                               By: Eric Peterson

Corn traded lower overnight on light demand for U.S corn and decent harvest progress.  $7.00 appears to be overhead resistance, the recent 4 month high is $7.06.  Corn harvest was reported at 61% complete, compared to 45% last week and 52% on average.  Look for lower trade today on harvest progress and slow export business. 

Soybeans closed unchanged this morning with the November contract trading an eleven cent range.  The market was slightly firmer overnight on recent increased demand, however gains were limited from rapid harvest progress.  Soybean harvest is 80% complete compared to 63% last week and a five year average of 67%.  Look for higher trade today on improved export demand for U.S soybeans.        

Spring wheat was lower overnight with the December contract closing seven cents lower.  The market was under pressure after another dismal week of export sales, ongoing shipments from Ukraine, and forecasts for beneficial rains across the southern plains.  Winter wheat seedings were reported at 79% complete compared to 69% last week.  Look for mostly lower trade today.          

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
SX23 Oct23$13.85$13.70$13.45
CZ23 Oct23$6.60$6.40$6.20
MWU23 Sept$9.75$9.50$9.43
Old Crop PremiumNew Crop TargetTrigger Date
0.4511.00 MWU238/25/23
0.4515.00 SX2310/21/23
0.307.00 CZ2311/15/23

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 October 24, 2022                                               By: Eric Peterson

Corn traded lower overnight as the market consolidates in a relatively narrow trading range.  Technical resistance remains above at $7.00 with support around $6.50.  Harvest progress is expected to come in at 60% this afternoon after a big harvest week.  Look for a weaker tone today on harvest progress, a stronger U.S dollar and weakness in crude oil.        

Soybeans traded lower overnight on a weaker energy market and other related oil markets.  The market continues to see overhead resistance at $14.00 support seems to be below at $13.50 near a gap.  Look for weaker trade today on weakness in the energy and China markets as well a strong U.S dollar.      

Spring wheat closed five cents lower overnight just off the session low.  $9.30 to $9.75 continues to be the trading range.  The U.S remains critically dry in much of the winter wheat areas, but radar shows some rain and snow to start the week.  Look for a weaker tone today on U.S dollar strength as well as talk of extending the safe passage for Ukraine shipments via the Black Sea Region.        

Price Builder BonusDaily Price PlusFutures at 8:00am
SX23 Oct23$13.85$13.70$13.53
CZ23 Oct23$6.60$6.40$6.21
MWU23 Sept23$9.75$9.50$9.36
Old Crop PremiumNew Crop TargetTrigger Date
0.4511.00 MWU238/25/23
0.4515.00 SX2310/21/23
0.307.00 CZ2311/25/23

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

Corn was two sided overnight with the December contract on both sides of the $7.00 mark.  The USDA will release their October WASDE report tomorrow at 11am.  The average corn estimate is 13.885 billion bushels compared to 13.944 billion last month.  Yield is expected to come in at 171.8 bpa compared to 172.5bpa last month.  After breaking out on big volume yesterday, look for the market be a little quieter ahead of tomorrow’s report. 

Soybeans were two sided overnight with the November contract trading a seventeen cent range.  U.S harvest hits hard as some areas begin to wind down.  On tomorrow’s USDA report the experts are predicting U.S production and yield to drop.  Look for slightly lower trade today as soybeans couldn’t hold on to yesterday’s gains, getting pressure from oil markets. 

Spring wheat traded mostly lower the entire night on profit taking after yesterday’s rally.  Russia and the escalation in Ukraine continues to provide underlying support.  There doesn’t seem to be more escalation in Ukraine this morning, so wheat is pulling back from yesterday’s rally.    

Old Crop PremiumNew Crop TargetTrigger Date
0.4511.00 MWU238/25/23
0.4515.00 SX2310/21/23
0.357.00 CZ2311/25/23

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 Sept 28, 2022                                               By: Eric Peterson

Corn opened slightly lower on the overnight and has traded in a narrow range during the night.  Corn is the strongest it has been in over 10 years for this time of year.  Russia is trying to permanently occupy some major regions of Ukraine, if successful, Russia corn production will go up.  Look for mixed trade today as harvest is ramping up and outside markets turn lower.      

Soybeans were lower this morning as harvest is picking up across the Plains.  November soybeans are getting closer to the $14.00 mark the September 8th low is $13.73.  Planting in Brazil is off to go good start and is helped by timely rains.  Look for mostly lower trade today on harvest pressure.       

Spring wheat closed nine cents higher this morning, just off the overnight high of $9.56.  All three wheat class were higher overnight with the KC market leading the way, not far from its highest price in three months.  Wheat remains volatile as global tensions remain high and uncertainty about the global wheat supply. 

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.

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