Daily Chemical Reactions

Hot Pocket! US Crop Conditions Plummeted In June, Bio-Product Seller Heartburn Risk Has Risen For 2H23
June 29, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Nutrien, CF Industries, Koch Fertilizer, LSB Industries, Corteva, Bayer, FMC, Farmer Business Network, American Vanguard, UPL, Poet Biorefining, Aemetis, ADM, Valero, The Andersons, Green Plains, Ashland, H.B. Fuller, BASF, Yara, ExxonMobil, Nouryon, Pertamina, Petronas, Axens, INEOS, Songwon, Sempra, Piedmont Natural Gas, Constellation Energy, Microsoft, DSM-Firmenich, MOL, Goodfuels, Drax, Occidental Petroleum, Toyota

Daily Chemical Reaction

Hot Pocket! US Crop Conditions Plummeted In June, Bio-Product Seller Heartburn Risk Has Risen For 2H23

Key Points:

  • Drought conditions and a heat wave hit most of the US in June, putting its crop production at risk and lifting electricity demand. The June impact on crop production will unlikely fully reverse.
  • US crop prices have fallen from recent 2H23 highs but remain significantly above pre-COVID levels – we view current prices as more favorable for future farmer spending than most views.
  • High crop prices will likely lift the debate surrounding food prices and biofuels (and other bio-based products), as both compete for inputs that will need to be shouldered by the consumer.
  • The current Texas heatwave and record electricity use reflect positively on solar and wind power producers, but concerns about the variability of their electricity generation remain.
  • US chemical and grain rail traffic remains lower than 2022 on both a YoY and YTD basis, with domestic chemical demand falling short of supply and grain supply falling short of demand.

See PDF below for all charts, tables and diagrams


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