Morning Market Wire 1/17

Friday January 17, 2020 by: Eric Peterson

Corn traded higher this morning, gaining back some of yesterday’s substantial losses that brought corn to a one month low. South Korea bought 66tmt of optional origin corn, there was talk there could be some other demand from Asia. Yesterday’s export sales came in above trade expectations at 784,700 tonnes. Look for slightly higher trade today after seeing large losses in the market yesterday.

Soybeans closed a fraction lower this morning with the March contract trading a four-cent range overnight. Soybeans are set to see the largest weekly loss in 5 months. Weather patterns in Brazil are expected to change over the next 15 days, with rain moving to favor the northern regions rather than the southern. Look for lower trade today as traders continue to be skeptical about Chinese purchases of U.S soybeans.

Spring wheat traded two sided overnight with the March contract trading a four cent range. Support came on continued world supply concerns and an increase of tenders and overseas demand this week. Look for stronger trade as global business continues to pick up and export prices remain firm in the Black Sea region.

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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 1/16

Thursday January 16, 2020 by: Eric Peterson

Corn traded lower overnight due to pressure from the soybean market and an overall negative sentiment regarding the trade deal. Markets are lower due to skepticism from traders regarding whether China will be able to purchase the pledged amount of agricultural goods. The details regarding Phase 1 of the trade deal revealed that China has agreed to purchase an additional $32 billion in U.S agricultural goods over the next two years. Look for weaker trade today following the soybean market.

Soybeans continued to trade lower overnight following yesterday’s selloff. Soybeans dropped to an almost one month low overnight due to skepticism that China will make the allotted purchases of U.S agricultural goods that they had promised. Chinee Vice Premier Liu He stated that the deal between the U.S and China would not impact China’s other suppliers of agricultural goods. He also stated that China will import U.S goods based on their needs and market conditions.

Spring wheat traded higher overnight due to pressure form the corn and soybeans markets. However, the Phase 1 signing brings optimism that China will buy wheat, they may have to buy wheat in order to even come close to the supposed agreed upon $32 billion of agricultural goods. Look for slightly lower trade today following the other grain markets, losses will be limited due to the supply concerns in the Black Sea region.

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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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 1/15

Monday January 13, 2020 by: Eric Peterson

Corn closed a fraction lower this morning as the market awaits the signing of the Phase 1 agreement. The signing ceremony for Phase 1 of the trade deal will take place today at 10:30AM CT at the White House, after the ceremony has been completed, details of the deal are expected to be released. Look for mostly steady trade this morning until details of the trade deal are released.

Soybeans traded lower overnight as traders are skeptical of China being able to purchase the amounts of agricultural products it is committing to buy. U.S Treasury Secretary Mnuchin stated this morning that China has agreed to put together significant laws in order to follow through on its commitments. Look for steady to lower to lower trade as we wait for details regarding Phase 1 of the trade deal.

 Spring wheat traded higher overnight with the March contract testing the resistance level of $5.60. Markets found support overnight due to supply concerns, as Russia is considering capping their wheat exports creating optimism this will increase demand for U.S wheat. Look for slightly higher trade today as world demand and tighter supplies support the 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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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 1/13

Monday January 13, 2020 by: Eric Peterson

Corn traded mostly unchanged overnight after seeing a non-eventful USDA report on Friday that surprised traders with a higher than expected 2019 production. The market was expecting a reduction to the corn supply, but the USDA raised the corn yield one bushel per acre to 168.0 bpa. Look for the market to remain steady this morning and continue to be rangebound until it can find some fresh news to trade.

Soybeans were weaker overnight with the March contact closing at the session low of $9.39. The market continues to await the signing of the Phase 1 agreement which is schedule to take place on Jan. 15th. At the signing we should see details regarding Phase 1. Look for weaker trade today as the Brazil harvest is just beginning so the demand window for U.S soybeans will begin to close quickly.

Spring wheat traded lower overnight with Kansas City and Minneapolis losing a good portion of their gains from Friday U.S carryout is projected to be over 950mb for a 5th year in a row which is also pressuring the market. World carryout is projected to be a record large amount. Look for mostly sideways trade as the market focuses on the signing of Phase 1.

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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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

Friday January 10, 2020 by: Eric Peterson

Corn closed a fraction higher this morning as the market awaits today’s USDA report. The USDA is expected to show a reduction in the U.S harvested acres, the South American crops and overall tighter U.S and world ending stocks. Look for higher trade this morning in front of the report on optimism over the signing of the Phase 1 agreement to take place Jan. 15th.

Soybeans traded lower overnight with the March contract trading a relatively narrow four cent range. The market continues to trade lower on fund selling ahead of the USDA report. Prices are drawing additional pressure from favorable South American weather and ideas of a near record crop in Brazil. Look for mostly quiet trade ahead of the long awaited USDA report.

Spring wheat bounced higher overnight as today’s report is expected to give us a small winter wheat planted acres number. Although, some of that may already be factored in. There has been some speculation that China will be a big buyer of U.S wheat after the Phase 1 agreement is signed. Rumors were that China is going to buy 5-6 cargoes of wheat from the U.S after the agreement is signed.

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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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 $177.9 million in first quarter net income

Truck delivering propane to residential home in winter

Significant increase in fall propane demand helped balance difficult market conditions

CHS reported net income of $177.9 million for the first quarter of fiscal year 2020 that ended Nov. 30, 2019. This compares to net income of $347.5 million in the first quarter of fiscal year 2019.

The results for the first quarter of fiscal year 2020 reflect:

  • Revenues of $7.6 billion compared to revenues of $8.5 billion for the first quarter of fiscal year 2019.
  • Strong supply chain performance in our propane business that was a positive contributor resulting from efficient sourcing of propane during significantly increased fall demand – brought on by unseasonably early cold and wet weather during harvest – for crop drying and home heating.
  • Less advantageous market conditions in our refined fuels business compared to the first quarter of fiscal year 2019, during which the company experienced historically wide pricing spreads between Canadian crude oil and crude oil from the United States. CHS processes Canadian crude oil at its refineries in Laurel, Montana, and McPherson, Kansas.
  • Poor weather conditions that occurred in fiscal year 2019 and the first quarter of fiscal year 2020 continued to negatively impact our Ag segment’s operations, resulting in lower crop yields, poor grain quality in some areas and lower fall crop nutrients sales.
  • Pressure on grain volume and margins due to slow movement of grain associated with unresolved trade issues between the United States and foreign trading partners.
  • Decreased fertilizer volumes compared to the first quarter of fiscal year 2019 due to a slow harvest in the first quarter of fiscal year 2020.

“We are not immune to the challenges of our industry, and our first quarter results reflect the difficulties brought on by fall weather and ongoing trade tensions,” said Jay Debertin, president and CEO of CHS Inc. “The cooperative system, however, provides CHS and its owners stability to withstand these difficult times. Our focus remains on building efficiencies in our supply chain and on operating in this challenging agricultural environment.

“During a cold and wet harvest, we leveraged our supply chain to meet the significant increase in propane needs of our owners and customers,” Debertin continued. “Our focus on meeting the needs of our owners helped deliver the successful launch of two products – Acuvant™ and Trivar™ – that will be available for spring planting.

“We know the remainder of fiscal year 2020 will continue to present challenges, and we are confident in our ability to find opportunities in those challenges, to help our owners grow their businesses and to continue to strengthen our company,” he said. “No one feels those challenges more than our owners. We remain committed to supporting communities and experts as they address the stress felt across rural America.”

First Quarter Fiscal 2020 Business Segment Results

The following segment results were reported for the first quarter of fiscal year 2020 as compared to the first quarter of fiscal year 2019.

Energy
Pretax earnings of $162.2 million in the first quarter of fiscal year 2020 compared to $232.5 million for the first quarter of fiscal year 2019 reflect:

  • Significantly less advantageous market conditions, driven primarily by decreased crude oil spreads on heavy Canadian crude oil processed at our refineries and, to a lesser extent, decreased crack spreads in our refined fuels business compared to the same period during fiscal year 2019. The decreased crude oil differentials and lower crack spreads were partially offset by favorable hedging activity in refined fuels.
  • The decrease in pretax income for refined fuels was partially offset by significantly improved propane margins from a late, wet crop combined with unseasonably cold weather across much of CHS service area that led to increased fall demand for crop drying and home heating compared to the first quarter of fiscal year 2019.

Ag
Pretax loss of $13.9 million compared to pretax earnings of $80.3 million in the first quarter of fiscal year 2019 reflects:

  • Poor weather conditions in fiscal year 2019 that culminated in a late and smaller fall harvest, resulting in decreased demand for farm supplies and crop nutrient products.
  • Ongoing global trade tensions between the United States and foreign trading partners continued to negatively impact grain volumes and margins.
  • Lower margins in our processing and food ingredients business.

Nitrogen Production
Pretax earnings of $16.5 million compared to pretax earnings of $23.7 million in the first quarter of fiscal year 2019 reflect:

  • Lower equity income from our investment in CF Nitrogen, of which CHS has partial ownership, attributable to decreased market pricing of urea and urea ammonium nitrate, which are produced and sold by CF Nitrogen.

Corporate and Other
Pretax earnings of $20.7 million compared to pretax earnings of $30.8 million in the first quarter of fiscal year 2019 reflect:

  • Results primarily from lower equity income from our investments in Ardent Mills and Ventura Foods and decreased income in our financing and hedging businesses due to market-driven interest rate reductions and lower trading activity, respectively.
CHS 1st quarter balance sheet

Morning Market Wire 1/9

Thursday January 9, 2020 by: Eric Peterson

Corn traded higher overnight as they bounce off the low end of the trading range. March corn has traded lower the past 4 sessions. Technical support is below at the 40 day moving average of $3.82 with resistance above at $3.86. As we near the end of the week we will continue to see pre-report positioning ahead of the USDA report on Friday.

Soybeans traded higher overnight in front of tomorrow’s USDA report. Average trade estimates for tomorrow’s report are production at 3.51bb compared to 3.55bb in December. Yield at 46.6bpa compared to 46.9 in December. Overall averages are leaning towards a tighter soybean supply. Look for higher trade as the Chinese are expected to sign “Phase one” of the U.S/China trade deal on January 15th.

Spring wheat bounced higher overnight as futures consolidate on the upper end of their recent trading range. Winter wheat acres are expected to be the smallest in many years… Although, this seems to be factored in as the market awaits fresh news. Look for mostly higher trade in front of tomorrow’s 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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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 1/7

Tuesday January 7, 2020 by: Eric Peterson

Corn closed a fraction lower this morning with the March contract trading a tight penny range overnight. China released a statement this morning it will not change its agricultural import quotas to accommodate any increased purchases from the U.S. Look for mostly rangebound trade this morning ahead of Friday’s USDA report.

Soybeans continue to trade weaker ahead for the January 10th report. News that China will not increase import quotas to accommodate the U.S is also pressuring the market. Dr Michael Cordonnier lowered his Brazilian soybean estimate 1.0mmt to 122.0 mmt. Excessive rains in November slowed planting while a lack of moisture in December has had a negative effect on growth potential. Look for lower trade ahead of Friday’s report.

Spring wheat closed two cents lower this morning with the March contract trading two cent range. Friday’s report is expected to show smallest wheat acres in over 100 years. However, much of that may already be factored in. Look for weaker trade today as tensions in the middle east are easing but remain and continue to pressure the 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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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 1/6

Monday January 6, 2020 by: Eric Peterson

Corn prices turned lower overnight on spillover weakness in the soybean and wheat markets. Rangebound trade is expected to continue ahead of the Jan 10th USDA data and the Jan 15 signing of the U.S/China trade agreement. Spec funds remain short although not as short as a week ago. Look for mostly rangebound trade on a lack of supportive news.

Soybeans are seeing a set back after picking up about sixty cents since December 1st. Overnight weakness was expected as the market was unable to hold on to gains yesterday. Look for mostly lower trade on beneficial weather in South America and a lack of fresh supportive news.

Spring wheat saw a technical setback after the past several sessions of firmer prices. Losses should continue to be limited ahead of the Jan 10 USDA report and the signing of the U.S/China trade agreement on the 15th of January.

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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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

Friday December 27, 2019 by: Eric Peterson

Corn closed a penny higher this morning with the March contract trading a narrow two cent range. Corn exports were 626.2tmt vs estimates of 500tmt-1.3mmt in today’s weekly export sales report, which was delayed one day due to the holiday shortened week. Look for stronger trade today as a weaker dollar, firm wheat prices and strong corn basis is helping corn return to the top of the recent trading range.

Soybeans traded higher overnight as enthusiasm over a trade deal with China and improving exports are aiding the market. Soybean exports came in at 747.3tmt compared to estimates of 700tmt-1.55mmt. Look for strength today as continuation of optimistic trade talk combined with weaker Real currency gave the market a lift overnight.

Spring wheat continues to rally with the next level of technical resistance at $5.52. A strong storm system is forecasted to move across most of the middle of the U.S over the next 3 days, but the question remains whether the exact route will alleviate dryness in the western wheat areas. Look for higher trade today on declining wheat production and lower U.S acres.

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.)

Below is the third compass contract we offer which pays you a premium for your old crop for potentially selling the same amount of new crop. You only sell the new crop if the futures are equal to or greater than the target price on the trigger date. There are many different premiums and target prices available. Please call for more info!

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.

© 2020 CHS Inc.