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.
CORN
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.
SOYBEANS
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
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.
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., (www.chsinc.com) 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.
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.
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.
Second quarter net income of $292.3 million in fiscal year 2023 reflects strong energy market conditions
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.
One life lost is too many. That idea is the driving force behind Nationwide’s Grain Bin Safety Week program and Think Grain Bin Safety campaign, and that’s why CHS is proud to partner with Nationwide in raising grain bin safety awareness. But for Nationwide, it’s way more than just a campaign.
Strong Global Demand for Ag and Energy Generated$782.6 Million in Fiscal 2023 First Quarter Net Income
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.
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.
CHS owners elected five of their peers to the CHS Board of Directors on Dec. 2, 2022. From left: Al Holm, Sleepy Eye, Minn.; Mark Farrell, Cross Plains, Wis.; Jerrad Stroh, Juniata, Neb.; Kevin Throener, Cogswell, N.D.; and Hal Clemensen, Aberdeen, S.D.
CHS owners elected five board members to three-year terms during the cooperative’s 2022 annual meeting held Dec. 1 and 2 in Minneapolis, Minn.
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.
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.
