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July 7, Fertiliser Comment

By Ben Seamer

  • All eyes currently on the European Natural Gas Market, (the input for nitrogen production) firmed 43% last week

  • Predictions for European ammonia production = were lowered due to higher input costs

  • UREA prices appear to have found a floor with rising natural gas prices and pending seasonal demand a signal

  • The US corn/UREA ratio, a key affordability matric has fallen below its five year average and presents a buying opportunity for farmers

  • Some keys metrics for DAP, UREA and Potash are the ratio against corn. As fertiliser prices outpace crops

  • The DAP to corn price ratio is up 23%, UREA to corn ratio up 54% and POTASH to corn 57%

  • The UREA prices reflect the higher gas driven costs where POTASH prices point to limited supply and strong demand

  • US farmers could be tempted by ammonias relative value this spring, ammonia is currently at its steepest discount to UREA in nine years as a per unit basis

  • India and Brazil are the worlds largest UREA importers and their demand rises in the second half as crop planting picks up

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