CHS Northern Grain Market Commentary 08.18.23

The markets turned their eyes back to the ongoing conflict between Russian and Ukraine the later part of this week. There has been a marked escalation on attacks on both Russian and Ukrainian ports. The Russian Novorossiysk port was attacked resulting in a large fire at an oil terminal. Approximately 1.6-2.1 MMbbl of crude oil are shipped out of the Novorossiysk port. Ukrainian drones hit central Moscow before being shot down by Russian air defense.


All eyes are on next week’s ProFarmer crop tour. Many are wondering what next week’s forecast effect will be on yield. Most of the crop is mature enough to avoid major damage, but conditions will decline. Last week’s U.S. Drought Monitor Map showed improving conditions in the corn belt but revealed declining conditions in the Northern Plains. There has been some talk of increased Chinese interest in U.S. corn. Private exporters reported a sale of 112,000 MT of corn for 2023/2024 to Mexico.


Prices have been driven all week by forecasts for high temperatures and no rain for the oncoming week.  The heat dome that appears to be setting up in the central states will increase chances of yield loss in areas where they haven’t seen rain. With the tight U.S. carryout, any reduction in yields could have a large effect on the supply and demand for soybeans in the U.S. There is also talk that China is showing interest in U.S. beans.


Wheat moved higher the end of the week on reports of damage caused by a Ukrainian drone in Moscow’s central business district. Harvest is slowly beginning to start across the CHS Northern Grain area. It was hampered early in the week by rain. Protein is coming in all over the board. India is seeing it’s driest August on record since 1901. This has prompted them to ban exports and they are expected to import up to 10mmt of Russian wheat and tightening world supply. News from the Polish Institute of International Affairs are proposing to ban Russian ships from entering EU ports if merchant ships in the Black Sea are attacked.

New state-of-the-art facility coming to Erskine!

ERSKINE, MINN. (June 14, 2022) – CHS will begin construction this summer on a new state-of-the-art grain facility with 1.25 million bushels of additional storage capacity in Erskine, Minn. The facility is slated to be operational in the fall of 2023 and will help CHS expand operational capabilities and increase efficiency across its footprint. The new shuttle elevator will bring total capacity at the location to 4.55 million bushels of storage and will complement existing CHS grain, agronomy and energy assets and offerings for area producers.  

“CHS is committed to growing our cooperative with customer-focused solutions that make it easier for producers to do business with us,” says Rick Dusek, executive vice president of CHS ag retail operations. “Our people, assets, capabilities and operational footprint are the strengths of our retail platform, and this important project advances our strategy to expand our customer-focused retail solutions platform, creating value and driving growth for farmers – as customers and owners. This facility is a key location in the flow of grain from the Upper Midwest to export terminals in the Pacific Northwest.”  

The new terminal is the latest in a series of investments throughout Minnesota and North Dakota by CHS. In keeping with its core value of safety, the company has placed priority on safety features and advancements to improve operating conditions. 

“Along with expanding our grain handling capabilities and value to area farmers, the new facility will create advantages for our employees, farmers and community,” says James Hardy, who manages CHS Northern Grain, a CHS business unit with eleven grain facilities in northwest Minnesota. “Improved traffic flows, better operating conditions, advanced equipment and the latest safety advances are just some of the innovations to help us provide a better customer experience. We want to get producers in, out and back to the field as quickly and safely as possible.” 

Vigen Construction out of East Grand Forks, Minn., is overseeing this construction project. 

CHS Northern Grain is a part of CHS Inc., ( 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, 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 public 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. 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 publicly 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. 

FFA to receive largest gift in CHS Foundation history

A smiling young man holding up a hanger with a navy blue jacket with a FFA patch on it

The CHS Foundation is making a $4.3 million commitment to National FFA over the next three years, the largest gift in the foundation’s 75-year history. The grant will help fund FFA programs in 17 states, provide scholarships for attending conferences and contests, introduce students from all backgrounds to ag careers through the workforce development program, and support the National Association of Ag Educators in attracting ag teachers and building strong teaching programs.


CHS reports strong fiscal year 2023 earnings

Net income of $1.9 billion exceeds previous high
Strong operational performance, favorable market conditions deliver increased earnings
Company intends to return $730 million cash to owners in fiscal year 2024

Aerial view of CHS McPherson Refinery

In fiscal year 2023, CHS energy businesses delivered strong earnings, reflecting continued favorable market conditions for refined fuels.

CHS Inc., the nation’s leading agribusiness cooperative, today reported net income of $1.9 billion for the fiscal year ended Aug. 31, 2023, compared to $1.7 billion for fiscal year 2022.


CHS intends to return $730 million to owners

Grain bins in the background and harvested field in the foreground, under partly cloudy sky
CHS announced its cash patronage and equity redemptions for 2023. The co-op is committed to sharing profits with owners and strengthening rural communities.

CHS has announced it intends to return $730 million in cash patronage and equity redemptions to its owners in calendar year 2024. The decision demonstrates the cooperative’s ongoing commitment to sharing profits with its owners and strengthening rural communities.


CHS reports third quarter earnings

Improved soybean and canola crush margins due to strong meal and oil demand resulted in higher earnings in the CHS oilseed processing business for the third quarter of fiscal year 2023.

Strong global demand generated $547.5 million in net income for third quarter of fiscal year 2023

CHS Inc., the nation’s leading agribusiness cooperative, today released results for its third quarter ended May 31, 2023. The company reported quarterly net income of $547.5 million compared to a record third quarter net income of $576.6 million in fiscal year 2022. For the first nine months of fiscal year 2023, the company reported net income of $1.6 billion and revenues of $36.1 billion, compared to net income of $1.2 billion and revenues of $34.4 billion recorded during the same period of fiscal year 2022.


CHS reports second quarter earnings

Second quarter net income of $292.3 million in fiscal year 2023 reflects strong energy market conditions

CHS tanker truck at fuel storage terminal

CHS Inc., the nation’s leading agribusiness cooperative, today released results for its second quarter ended Feb. 28, 2023. The company reported quarterly net income of $292.3 million compared to $219.0 million in the second quarter of fiscal year 2022. For the first six months of fiscal year 2023, the company reported net income of $1.1 billion and revenues of $24.1 billion compared to net income of $671.0 million and revenues of $21.2 billion recorded in the first half of fiscal year 2022.


CHS Reports First Quarter Earnings

Strong Global Demand for Ag and Energy Generated $782.6 Million in Fiscal 2023 First Quarter Net Income

machinery harvesting soybeans

CHS Inc., the nation’s leading agribusiness cooperative, today released results for its first quarter ended Nov. 30, 2022. The company reported quarterly net income of $782.6 million compared to $452.0 million in the first quarter of fiscal year 2022.

Fiscal 2023 first quarter highlights include:

  • Revenues of $12.8 billion compared to $10.9 billion in the first quarter of fiscal year 2022, a year-over-year increase of 17%.
  • Continued robust global demand for commodities, coupled with market volatility, resulted in strong earnings across all business segments.
  • Significantly improved earnings in our Energy segment resulted primarily from higher refining margins driven by strong demand in rural America and global market conditions.
  • Our soybean and canola processing businesses in our Ag segment benefited from strong demand for meal and oil.
  • Our CF Nitrogen investment delivered strong earnings due to robust urea and UAN demand.

Wisconsin ag teacher wins top CHS Foundation grant

People in business attire standing on a stage holding oversized checks, the sign behind them reads 75 years
At the CHS Annual Meeting, attendees voted to award a $10,000 teacher grant from the CHS Foundation to Sioux Falls Career and Technical Education Academy in Sioux Falls, S.D.; $15,000 to Wyndmere High School in Wyndmere, N.D.; and $20,000 to Osseo-Fairchild School District in Osseo, Wis.

At the CHS Annual Meeting tonight, attendees voted to award a $20,000 first-place teacher grant from the CHS Foundation to Amelia Hayden, a first-year ag educator at Osseo-Fairchild High School. In honor of its 75-year anniversary, the foundation is awarding a total of $75,000 in grants for K-12 teachers to implement projects that will engage students in experiential agricultural education. 


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