Sep 22, 2021

Fertilizer Prices Climb

As prices go up, producers consider cutting application rates

Gulf Terminals Showing Signs of Recovery

  • The USDA reported that about 7.9 million bushels of corn and 5.5 million bushels of soybeans were inspected last week along the Louisiana Gulf Coast.

  • The week prior showed none.

  • Still, inspections were about 48% lower for corn and 80% for soybeans versus one year ago.

  • About 60 bulk vessels were lined up along the lower Mississippi earlier this week waiting to dock and load grain.

  • Loadings and exports should continue to pick up and return to normal in the coming weeks.

FBN’s Take On What It Means: About three weeks after Hurricane Ida, Gulf exports continue to be sluggish. However, shipments are catching up to normal and most of the large terminals are working unhindered. Two of the last holdouts are Bunge’s facility in Destrehan, LA and CHS’s in Myrtle Grove, LA; the Destrehan facility is currently running intermittently and the Myrtle Grove one should be operational in October.

Fertilizer Prices Climb

  • Bloomberg reported that urea and DAP have reached levels not seen for about a decade.

  • Reasons for the sharp spike include the storms that struck the Gulf this summer, shuttering plants and preventing shipments.

  • Natural gas and coal prices have also risen, curtailing ammonia production in Europe and urea production in China.

  • Fertilizer prices have helped exacerbate global food prices.

  • Farmers are weighing options, including changing planting plans and limiting fertilizer use.

FBN’s Take On What It Means: To help blunt the effects of the recent fertilizer inflation, farmers are considering cutting application rates, switching acreage from higher-input crops (e.g. corn) to lower-input ones (e.g. soybeans), and even delaying purchases in hopes of lower prices later. Any of these options could dramatically alter yield and acreage projections for next year’s crop, especially corn.

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Kevin McNew

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Marketwatch: Oct, 24

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.1374
high: 5.1867
low: 5.1249
close: 5.1668

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 11.801
high: 11.861
low: 11.7324
close: 11.7679

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.4043
high: 7.5443
low: 7.3993
close: 7.5365

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 6.9986
high: 7.0999
low: 6.9861
close: 7.0671