Welcoming Jay Hoffman

Starting June 18, Jay Hoffman will be the new Feed Department Manager. Jay has been working closely with our sales staff and dairy customers and prospects for the past two years from the Form-A-Feed team. He comes to CHS Larsen Co-op with over 30 years of sales experience with five years of management.

Dustin Millard, previous Feed Department Manager, has accepted a position within the cooperative as Operations Manager. He will still be working closely with Jay on the operations side of feed as well as with the other four departments, agronomy, grain, energy and retail. He will continue to keep his relationships with current and prospective customers on the cooperatives behalf. Dustin’s time as Feed Manager was spent connecting with farmers along with getting the feed department aligned in the industry for future growth, and he looks forward to helping that growth continue. He chose to take the Operations Manager position because he feels that we as a cooperative can become more efficient for our producers by working across departments and utilizing their talent and assets where they are needed most.

Jay was born and raised on a dairy farm in Michigan and moved to Wisconsin in 1975. He farmed with his family until 1984, when he bought his own farm. His journey in sales started in the late 1980s, where he worked off the farm but still in the dairy industry in breeding cows as an AI technician and other related sales positions. He started working in dairy nutrition in the late-1990s. His management experience came from working with the Agri-Nutrition Consultants (ANC) group as the assistant general manager. As the GM he helped with daily business decisions, business plans, and employee performance management, while still working as a dairy nutritionist and consultant. ANC had a long term relationship with Form-A-Feed (FAF) and in 2017 they merged, which is when Jay became the Divisional Sales Leader for FAF.

While working with Dustin and CHS in the past two years, Jay has enjoyed working with the farmers, and will continue to focus on quality and doing what’s right for ours farmers. Jay is looking forward to getting back into more of a business decision role at CHS. He will be working with Dustin to strengthen relationships. He likes being able to help improve the overall return on investment for both our producers and the co-op. He will continue to find ways to improve and build a department that will help ensure we can serve our producers now and into the future.

Jay has every intention on continuing our joint venture with FAF utilizing their professional staff and on farm quality products. Already having strong relationships with the team at Form-A-Feed he feels confident this will be a good fit for both sides of the joint venture.

Jay looks forward to meeting the rest of CHS Larsen Co-op’s producers and customers. Outside of work Jay really enjoys spending time with his family camping and fishing as well as watching college sports. Please help us in congratulating Jay Hoffman on accepting the Feed Department Manager position at CHS Larsen Cooperative.

Why are Propane Prices 20% Higher for the 2018/2019 Heating Season?

Propane pricing is historically driven by a few major factors.  The primaries being LP supply/demand and the value of crude oil.  Let’s take a look at how both are affecting propane’s current value and our propane futures.

Crude oil pricing is currently bouncing around in that $65/barrel range, where last year at this time we were looking at $45/barrel crude oil … this is an approximate 50% increase in values in 1 years time!   There are a number of factors behind the crude oil value builds, but the big 2 are imports and economy.

Importing has become a major concern with quite a bit of political unrest in the middle east, and in addition to that, Venezuela; our 3rd largest exporter of crude oil has virtually gone bankrupt.  The country is literally liquidating their land in order to pay off large debts.  This leaves the US with concerns of lacking supply .

With unemployment at an all time low, the economy seems to be bouncing back– in a big way!  The stronger economy outlook is giving company owners and CEO’s more confidence in their financial future.  This is giving them all the incentive they need to expand.  These large expansions are creating an increased demand for fuel commodities throughout the US.

To sum this up… SUPPLY CONCERNS + INCREASED DEMAND= HIGHER PRICED CRUDE OIL

Propane, just like crude oil, typically bases it’s values off of supply and demand.  We just finished an extremely long “normal” winter.  This normal winter seemed to be quite a shock for some, with temperatures averaging 20%  lower than the past few years and increasing propane usage at the same rate.  The length of the winter has also become an issue, with a major snowstorm hitting the Midwest in late spring.  This storm wreaked major havoc on the farming community.  Farmers were forced to put off planting by weeks.  This late planting has caused concerns of a larger than normal corn/grain drying season this fall, which could potentially increase demand.

Though the US is continuing to produce enough propane to sustain, we have also became the primary exporter to Asia with steadily increased volumes.  Last years average exports to Asia were around 770,000 barrels per day– we are now exporting over 1 million bpd!  We are currently sending more than 1/2 of our propane produced overseas (FYI: we only exported 10% in 2009).

As you can see, we have there is increased  concern over exports, which have obviously hampered the US supply; in addition to the potential for a larger than normal demand this fall.

I don’t think I need to sum this one up!

by Kim Leisner, Energy Sales Manager 

Weekly Grain Update – June 15, 2018

6/15/18

The Massive Selloff Continues.  USDA Confirms Large Old Crop Stocks, But Smaller New Crop Stocks On The Horizon.

The USDA released its June crop report on Tuesday and confirmed large old crop stocks, but significantly less new crop stocks.  In the corn market, the USDA increased old crop corn exports by 75 M bu up to 2.3 B bu for old crop.  We have seen a consistent amount corn being exported out of the Gulf each week, and these numbers have remained higher than normal for quite some time.  When the dust settled, old crop corn ending stocks were reduced by 80 M bu down to 2.102 B bu.  On new crop corn, the USDA reduced feed usage by 25 M bu down to 5.35 B bu.  The end result is a corn carryout for next year at 1.577 B bu.  As you can see, the corn carryout is substantially less next year than the current year.  The market is concerned about this sharp reduction in carryout for next year.  However, the crop is off to a wonderful start, the weather is non threatening at the moment, and there is a real probability that the old crop carryover could grow in size if the weather holds.

On beans, the crush margins has been very good as of late, mainly supported by the decent price of bean meal.  The USDA increased bean crush on old crop by 25 M bu up to 2.015 B bu.  When the dust settled, old crop bean ending stocks dropped 25 M bu down to 505 M bu.  In new crop beans, the USDA is using 89 M acres and a yield of 48.5 bpa.  They pegged next year’s bean ending stocks at 385 M bu, significantly tighter than old crop.  Just like corn, the old crop supplies remain plentiful while the new crop supplies are considerably less.

In the wheat market, the USDA made a small adjustment to old crop exports, and cut them by 10 M bu down to 900 M bu.  This pushed old crop ending stocks up to 1.08 B bu.  On new crop, they increased exports by 25 M bu to 950 M bu and this took ending stocks down to 946 M bu.  Both crop years have ending stocks close to 1 B bu and this leaves the market relatively comfortable.  Although true, there are concerns of lower yields around the world due to drought conditions in the EU, Black Sea, and in Canada.  Even though the US’s supplies remain decent, the rest of the world does not have the same luxury.

The market made a high on the Tuesday after Memorial Day and since then, it has been significantly pounded lower like I have never seen before.  All grains, no matter the significant tightness for next year, have all been pushed lower to levels that no one ever thought possible.  Many in the grain trade are shocked by this massive lower movement of grain futures since Memorial Day, and still cannot believe it has happened.  The fundamentals for next year clearly do not justify such a move, and we still have at least a 60 day period where the weather can easily change the final outcome on yields.  Since Memorial Day, Dec ’18 corn has dropped 46 cents, Nov ’18 beans have dropped a whopping $1.25, and July ’18 wheat has dropped 59 cents.  I have never witnessed anything like this in my 25 years in this business.  The funds had a decent size long position across the board and have been blown out of their entire long position, and now are likely short.  This is a massive amount of grain that has been sold in the last 2 weeks, adding more and more selling pressure to the market.

Additionally, the charts look terrible.  We have systematically blown through at least 3 different support levels on the way down, going through them like nothing was there.  What is concerning, is that we have not stopped going down yet!  As I look at each chart, we have not bounced off of any support level yet.  We now have new crop cash corn at Readfield at $3.42, new crop beans at $8.60, and new wheat at $4.40.  New beans into Readfield traded $9.91 just a few days ago!  This is something for the record books.  For all of you who took our advice and sold new crop bushels earlier in the year, congratulations.  You have saved your farm.  For those of you who were bullish and decided to stick your head in the sand over the last 3 weeks while trying to plant your crop, and now don’t have enough new bushels sold, we have some serious work to do.  Grain futures will bounce.  The questions is when, and from what level.

Why did this sell-off happen?  Let’s go over the list:

  • Although late, the entire corn and bean crop was planted in the Corn Belt.
  • Planting conditions were good, and plant populations are great. This will push yields higher.
  • So far, we have had adequate rain in the majority of the Corn Belt.
  • Heat units are accumulating nicely, and the heat is allowing the crops to catch up.
  • Soybeans were planted much earlier than normal, and final yields should be higher than normal if the weather holds.
  • The funds have sold massive amounts of their spec positions from one of significant length to now being short. All of this selling pushed futures lower each day.
  • The market is incredibly nervous about the potential tariffs between the US and China, Canada, and Mexico. The Trump Administration will make a decision today, June 15th, whether to enact its first tariffs with China on $50 B worth of goods.  The funds and specs do not want to trade grain with this outside influence, so they got out over the last 2 weeks.
  • NAFTA – It looks like an agreement will not be made with Mexico and Canada.
  • North Korea – Will this agreement hold? Are they playing us?
  • The lack of China buying US beans over the last 2 months. They have virtually stopped buying our beans.  If the tariffs get enacted today, the Chinese will do everything not to buy our beans.  This is the real reason beans have fallen by $1.25 in the last 2 weeks.  The bean market is in real trouble if the Chinese don’t buy our beans.

For those of you who now find themselves in a very uncomfortable position, the time is to be truthful with yourself, be honest, and allow us to help you work through this.  We want to help and can work with you to put a plan in place to dig yourself out of this hole.  This is not a time to sit back and be complacent.  Your farm and livelihood could easily be at stake.  Our team can easily sit down and help you put a marketing plan together to help salvage your business.

What Are The Charts Telling Us?

Here are the support and resistance levels for cash and new crop grains.  These are all futures levels as traded at Chicago:

Cash Corn – July 18 Corn Futures – Support at $3.50, Resistance at $3.62, Place Targets at $3.60

New Corn – Dec 18 Corn Futures – Support at $3.79, Resistance at $3.87, Place Targets at $3.85

Cash Beans – July 18 Bean Futures – Support at $9.00, Resistance at $9.26, Place Targets at $9.15

New Beans – Nov 18 Bean Futures – Support at $9.23, Resistance at $9.39, Place Targets at $9.35

New Wheat – July 18 Wheat Futures – Support at $4.86, Resistance at $5.03, Place Targets at $4.97

To see where grain futures are currently trading, please click here.

Targets Produce Success and Protection For Your Farm

Before long, weather markets will push the market around like a yoyo and produce unprecedented volatility.  However, volatility can be your friend if you have a solid marketing plan and know how much and at what price you feel comfortable selling when the right opportunities present themselves.  If you are not working with one of our grain originators today, please give us a call.  We will gladly sit down with you to create a plan and help you protect your farm.  For a list of our grain originators and the one closest to you, please click here.  These types of volatile markets are a grain marketer’s dream.  The volatility present selling opportunities that are very short lived.  For the disciplined marketer, who knows exactly what commodity he needs to sell and at what level, this is a perfect scenario.  You simply place target orders in our system and at 3 am in the morning next Thursday while China makes an announcement when we are all sleeping, the markets ramps up, hits your target, locks in your contract price, all automatically while you are in bed.  How fantastic is that!  I encourage all of you to start using our online target system.  Its free, easy, and will protect your farm.  Please click here for more information.

New Arrive Delayed Price Rates have Been Reduced

We have reduced our Delayed Price rates for new arrive corn and beans into Readfield and Center Valley.  These rates are for new arrive bushels only, and the rate will be in effect until Oct 1st 2018 when new crop storage rates will go into effect.  The new Delayed Price rate is now 60 days FREE, and then 3 cents flat per month thereafter.

Condo Space For Sale (aka Long Term Storage Agreement)

The co-op does have 3,000 bu of condo space to sell.  If interested, you can find more information on our web site, or click here.  Please call the number listed and talk to Todd.  He will inform you of all the details and who is selling their Condo Space.  In the future, this site on our web page will be updated with buyers and sellers of Condo space for our co-op.  If you own Condo space and would like to sell, or if you would like to buy Condo space, please let us know and we can post your information for you.  We want to make this a useful site to trade Condo Space.

As always, if I can help you with anything, please call me at the grain office in Readfield at 920-667-4955, ext 2 or send me an email at marcus.cordonnier@chsinc.com.

Marcus Cordonnier

Awards 13 $1,000 Scholarships

CHS Larsen Cooperative is proud to announce that they have awarded $13,000 in scholarships. This is the eighteenth year they have offered a scholarship program for their customers; already helping over 264 students. CHS Larsen Cooperative’s trade territory has expanded and they have felt the need to return support to the communities that help support their cooperative.

$1,000 Scholarship Winners

CHS Larsen Cooperative offered this scholarship to graduating high school seniors and currently enrolled post high school education. The 13 students that received the 2018 scholarship are as follows: Bailey Adams of Stevens Point, parents are Larry and Lisa Adams; Jenna Breitenfeldt of Wausau East, parents are Wayne and Lori Breitenfeldt; Jason Ebert of Clintonville, parents Tim and Crystal Ebert; Madeline Egan of Omro, parents are John and Sheri Egan; Paige Hein of Seymour, parents are Joe and Beth Hein; Kelsey Potratz of Omro, parents Wes and Lorie Potratz; Sarah Rohm of Seymour, parents are Keith and Paula Rohm; Megan Schuh of Freedom, parents are Brent and Carrie Schuh; Zachary Sievert of Pulaski, parents are Rod and Ann Sievert; Brett Van Dyck of Appleton, parent Andy and Laurie Van Dyck; Matt Verhasselt of Freedom, parents are Mike and Marney Verhasselt; Jacob Viergutz of Clintonville, parents are David and Connie Viergutz, and Colin Wussow of Bonduel, parents are Ron and Nicolle Wussow.

Apply for 2019 Scholarships Today

The criteria and 2019 application is on the website CHSLarsenCooperative.com. The deadline for the CHS Larsen Cooperative scholarship is March 15, 2019. Visit the website to apply for next year or call 1-800-924-6677.

CHS Larsen Cooperative is proud to support our local youth. It pays to invest in our local future industry leaders.

Why It’s a Great Idea to Lock in Propane

 

As we approach the contracting, pre-pay, budget season for propane, it’s a good idea to look at why proactive options are a great way to take the guesswork out of your future LP needs. By contracting/locking in your future propane needs for the upcoming heating or crop drying season, you have the peace of mind of knowing you have the propane you will need for the fall and winter of 2018/2019.

Over the last five years, we have seen extreme volatility in propane prices. Remember when prices were over $5.00 a gallon? Did you know inventories in season with heavy usage periods have caused prices to spike and supplies to be stretched during the extreme cold periods of winter–I think the weather folks use the term “Polar Vortex” instead of Alberta Clipper now? Just last winter, inventories of LP in the upper Midwest were well below the 5 year average mark, which caused some propane suppliers to go to forced allocation/maximum delivery gallons of 200 gallons per stop. Because CHS Larsen Co-op Supports propane contracting, pre-pay, budget, and summer fill programs so heavily, we lock-in propane gallons during the summer with our suppliers so you, our customers, don’t need to worry come fall and winter.

Most of our competitors will buy propane gallons in season on the open market, which could be a problem if non-contracted gallons are scarce and expensive. At CHS Larsen Co-op, we lock-in these needed gallons by purchasing futures propane contracts for in-season heating and crop drying needs. As one of our customers, when you lock-in propane gallons you have the advantage of knowing you will have the propane you need, when you need it, at the agreed upon price–no hassle, no worries, no guesswork of wondering how high propane prices will go when the cold arrives.

Last year we saw propane prices surge past $2.00 a gallon during the extended cold weather periods in January and early February.  CHS Larsen Co-op customers that locked in propane at a substantially lower price during the summer contracting period of 2017 did not have to be concerned about surging LP prices or supply/inventory issues. Looking forward at the 2018/2019 heating and crop drying season, we once again face lower propane inventories at this point in time due to heavy and growing exporting of US product to expanding world markets. This demand is not just heating needs but mainly for manufacturing needs as propane is a major component of many finished products. This scenario, just like last year, leads us to believe we will see cost of propane jump up during the cold months/heating season. The best way to combat this future price increase is to contract your needed gallons this summer and to take advantage of the CHS Larsen summer fill program so you do not have to worry about your heating needs for this winter.

CHS Larsen Co-op is just a phone call away. We are here to take the uncertainty and guesswork away in helping you lock-in your propane needs.

By Todd Plath, Certified Energy Specialist

Start the New Season with a New Grease

As you prepare for working in the fields, don’t forget about grease. Your equipment depends on grease for protection from intense friction that ultimately leads to the breakdown and improper operation of your machinery. That’s why choosing the right grease is one of the most important preparations for the busy, high-pressure planting season.

New formulations, better performance 
When you buy Cenex® grease this spring, you may notice it looks different than it did last year. Don’t worry, this change in appearance is intentional to make a better-quality grease. Plus, when creating its new grease formulations, Cenex asked for feedback from farmers and used this to direct changes.  

Cenex greases, including BLUE GARD+™ and ML 365®, have been reformulated to meet higher quality standards. You may notice the greases have a lighter color. This change is due in part to replacing sulfur in the original formula with calcium carbonate to improve performance under high-moisture conditions. 

These new grease formulations stay in place longer, creating a reliable layer around critical equipment parts. This in turn protects your equipment from rust and corrosion and is better suited for temperature fluctuations throughout the changing of the seasons. 

Remember these grease best practices   
New formulations will only help if you’re using the greases properly. Now is a great time to revisit best practices for choosing a grease.

1. Analyze your needs. Not all greases are created equal. Allow time to reflect on what you need your grease to do and what conditions it will encounter, including temperature and moisture level. Be sure to talk through your needs with your local Cenex dealer for expert advice. 

2. Check compatibility. Many types of grease will not work effectively on top of each other, so if you’re changing greases, don’t just combine it with existing greases. To ensure compatibility and consistency down the line, take a photo of your current grease’s packaging and use this when talking with your Cenex dealer about greases. 

3. Read the directions. Be sure to read the directions for your grease gun carefully. Some models come with anti-debris filters that can restrict flow if the wrong cartridge is used. 

As the seasons change, so should your operational practices. By taking time now to ensure best practices are in place, you’ll save yourself time and money down the road. To help determine which grease suits your equipment needs, contact one of our Energy Specialists to help you decided what works best for you. 

 Originally posted on Cenexperts Blog 

Encourage your cooperative to apply for Seeds for Stewardship matching grants

Seeds for Stewardship matching grant
Spring and warmer weather are upon us. It’s a great time to plant the seed of community support and grow pride in your community by encouraging your local cooperative to apply for a Seeds for Stewardship matching grant. Since Seeds for Stewardship began in early 2017, CHS has partnered with more than 70 local cooperatives on more than 100 projects in rural communities. Your cooperative could be next!

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Maximize Your Yield With Foliar Nutrition

CHS Larsen Co-op joins the fight against rural hunger

Shana Shepard, Energy Customer Service Rep, delivered to the New London Community Cupboard, Kim Ebert.

CHS Larsen Cooperative joined CHS locations across the country in fighting rural hunger with the cooperative’s annual CHS Harvest for Hunger food, funds and grain drive. The annual campaign gathered more than $540,000 and 215,000 pounds of food to fight hunger in rural America.

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Weekly Grain Update – May 30, 2018

 

After A Nice Rally, Bearish Factors Line Up

The grain markets witnessed a tremendous run up in price last week after the productive meeting with the Chinese chief negotiator last week.  Now, the market wants to see some results of this meeting before taking the market any higher.  Trade volume was light towards the end of last week, and this allowed the bulls to easily push the market to new highs without much resistance.  As the market opened Monday night after the long Memorial Day weekend, the bullish mentality began to change.  Tuesday was a bearish day on many levels.  The market opened up strong Monday night and made new highs, only to trade lower and close lower, and some markets closed below the previous day’s lows.  This is the definition of a key reversal, and many grain markets witnessed this on Tuesday.  Technically, this is a bearish signal that might send grain futures lower for a significant amount of time.

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