Corn futures are $4.57 per bushel down from $4.90 per bushel just two days ago.
Well, the only thing I have in mind is a picture…..
#farming #farm #fertilizers #fertilisers #crop #yeild #corn #cbot #imstory
Well, the only thing I have in mind is a picture…..
#farming #farm #fertilizers #fertilisers #crop #yeild #corn #cbot #imstory
Ok, let’s get back to some numbers again.
India consumes 35 million tonnes of urea per year. Domestic production has risen from 22.5 million tonnes in 2014 to 31 million tonnes in 2024, which is impressive.
The Talcher Fertiliser Plant, the country’s largest and first coal gasification-based urea facility, is expected to start operations by the end of 2024. After its commencement, domestic urea production will be around 32.5 million tonnes.
So, the country’s urea import dependence should not exceed 2.5 million tonnes. And… it’s planned to be covered with the notorious Nano Urea.
Nano Urea was launched by IFFCO (Indian Farmers Fertiliser Cooperative Limited) a few years ago. According to IFFCO, one bottle of 500 ml is equivalent to one bag (45 kg) of conventional urea. On top of that, IFFCO claims an 8-10% increase in crop yield compared to normal urea.
Let’s stop here for a moment. I really want to understand if anyone else besides IFFCO has seen and tested this miracle? And if Nano Urea is so powerful and effective, why don’t we see it being applied in other countries? The latest IFA conference, like many other events, was marked by such words as “sustainable fertilisers”, “water-soluble”, “slow release”… I am not being sarcastic at all, just trying to understand if Nano Urea is indeed something valuable. If so, I’m keen to make money from it.
Have a great week, everyone!
#yeild #fertilisers #fertilizers #india #IFFCO #urea #nanourea #imstory #crop
India consumes 35 million tonnes of urea per year. Domestic production has risen from 22.5 million tonnes in 2014 to 31 million tonnes in 2024, which is impressive.
The Talcher Fertiliser Plant, the country’s largest and first coal gasification-based urea facility, is expected to start operations by the end of 2024. After its commencement, domestic urea production will be around 32.5 million tonnes.
So, the country’s urea import dependence should not exceed 2.5 million tonnes. And… it’s planned to be covered with the notorious Nano Urea.
Nano Urea was launched by IFFCO (Indian Farmers Fertiliser Cooperative Limited) a few years ago. According to IFFCO, one bottle of 500 ml is equivalent to one bag (45 kg) of conventional urea. On top of that, IFFCO claims an 8-10% increase in crop yield compared to normal urea.
Let’s stop here for a moment. I really want to understand if anyone else besides IFFCO has seen and tested this miracle? And if Nano Urea is so powerful and effective, why don’t we see it being applied in other countries? The latest IFA conference, like many other events, was marked by such words as “sustainable fertilisers”, “water-soluble”, “slow release”… I am not being sarcastic at all, just trying to understand if Nano Urea is indeed something valuable. If so, I’m keen to make money from it.
Have a great week, everyone!
#yeild #fertilisers #fertilizers #india #IFFCO #urea #nanourea #imstory #crop
Good morning,
I was asked yesterday by a friend about the recent spike in MAP prices in Brazil. The price broke nearly six months of equilibrium, increasing from $560-570 per metric tonne CFR to $585 per metric tonne CFR last week.
Several factors have contributed to this increase, although it was not entirely unexpected. The term "cartel" is particularly relevant in the modern phosphate industry, especially concerning Moroccan, Russian, Saudi Arabian, and US producers.
Looking at the chart from Acerto Limited, the Brazilian system is literally high and dry. Major players were not rushing to ship cargoes to Brazil, overplaying local importers.
Increased production costs have also played a significant role. Rising prices for inputs such as natural gas and sulphur ($100-110 per metric tonne CFR compared to $80s at the end of 2023), essential for producing ammonia and phosphate fertilisers, have led to higher overall costs for these products.
And, of course, there is the issue of China. Chinese cargoes are consistently delayed and not cheap at all, as was expected.
#imstory #fertilisers #fertilizers #brazil #map #cartel #russia #morocco #saudiarabia #usa #china #gas #sulphur #price
I was asked yesterday by a friend about the recent spike in MAP prices in Brazil. The price broke nearly six months of equilibrium, increasing from $560-570 per metric tonne CFR to $585 per metric tonne CFR last week.
Several factors have contributed to this increase, although it was not entirely unexpected. The term "cartel" is particularly relevant in the modern phosphate industry, especially concerning Moroccan, Russian, Saudi Arabian, and US producers.
Looking at the chart from Acerto Limited, the Brazilian system is literally high and dry. Major players were not rushing to ship cargoes to Brazil, overplaying local importers.
Increased production costs have also played a significant role. Rising prices for inputs such as natural gas and sulphur ($100-110 per metric tonne CFR compared to $80s at the end of 2023), essential for producing ammonia and phosphate fertilisers, have led to higher overall costs for these products.
And, of course, there is the issue of China. Chinese cargoes are consistently delayed and not cheap at all, as was expected.
#imstory #fertilisers #fertilizers #brazil #map #cartel #russia #morocco #saudiarabia #usa #china #gas #sulphur #price
Thank you, everyone, for a truly engaging discussion on the topic of Nano Urea. I've spent a productive day immersing myself in reading and watching material on the subject, and now, to bring the topic to a close, here are some final thoughts
It's a bit long for the post, so an article had to be published.
Nano urea is an agricultural input designed to enhance crop yield and reduce environmental impact. It is synthesised using nanotechnology to deliver nitrogen more efficiently to plants compared to traditional urea. Like everything in the world, it has its own strengths and weaknesses.
Pros of Nano Urea
1. Enhanced Efficiency:
- Improved Nitrogen Utilisation:Nano urea provides nitrogen in a more bioavailable form, which plants can absorb more efficiently. This leads to better utilisation of nitrogen with less wastage
- Reduced Application Rates: Due to its high efficiency, the quantity of nano urea needed per hectare is significantly lower than conventional urea, potentially reducing the overall cost for farmers.
2. Environmental Benefits:
- Lower Pollution:Traditional urea often results in significant nitrogen loss through leaching and volatilisation, contributing to water and air pollution. Nano urea reduces these losses, thus minimising environmental contamination.
- Sustainable Agriculture: By enhancing nitrogen use efficiency, nano urea supports sustainable farming practices, reducing the environmental footprint of agricultural activities.
3. Economic Advantages:
- Cost Savings: Despite a potentially higher initial cost, the reduced amount required and improved yields can lead to overall savings for farmers
- Increased Yield: Some studies and applications in some countries have shown that nano urea can lead to a substantial increase in crop yields due to better nutrient availability
4. Storage and Handling:
- Longer Shelf Life: Nano urea typically has a longer shelf life compared to conventional fertilizers, which reduces waste and the need for frequent purchases.
- Ease of Transport: Its lower application volume means less bulk to transport and handle, simplifying logistics.
Cons of Nano Urea
1. Higher Initial Cost:
- Investment Barrier: The upfront cost of nano urea can be higher than traditional urea, which might deter some farmers, especially those with limited financial resources.
2. Technical Knowledge Required:
- Usage Complexity: Proper application of nano urea requires a certain level of technical knowledge and precision, which might not be readily available to all farmers, particularly in developing regions.
3. Availability Issues:
- Limited Access: Currently, the production and distribution of nano urea are not as widespread as conventional urea, potentially limiting its availability to farmers in remote or underdeveloped areas.
4. Regulatory and Safety Concerns:
- Regulatory Hurdles: The introduction of nano urea is subject to regulatory approvals and standards, which can vary significantly between countries, potentially delaying its widespread adoption.
- Safety and Health: As with any new technology, there are ongoing concerns about the long-term safety and health impacts of nano particles on humans and the environment, necessitating further research
As I said, each coin has two sides. What I am trying to do is to avoid judging but to have a deeper understanding.
#yeild #fertilisers #fertilizers #india #IFFCO #urea #nanourea #imstory #crop
It's a bit long for the post, so an article had to be published.
Nano urea is an agricultural input designed to enhance crop yield and reduce environmental impact. It is synthesised using nanotechnology to deliver nitrogen more efficiently to plants compared to traditional urea. Like everything in the world, it has its own strengths and weaknesses.
Pros of Nano Urea
1. Enhanced Efficiency:
- Improved Nitrogen Utilisation:Nano urea provides nitrogen in a more bioavailable form, which plants can absorb more efficiently. This leads to better utilisation of nitrogen with less wastage
- Reduced Application Rates: Due to its high efficiency, the quantity of nano urea needed per hectare is significantly lower than conventional urea, potentially reducing the overall cost for farmers.
2. Environmental Benefits:
- Lower Pollution:Traditional urea often results in significant nitrogen loss through leaching and volatilisation, contributing to water and air pollution. Nano urea reduces these losses, thus minimising environmental contamination.
- Sustainable Agriculture: By enhancing nitrogen use efficiency, nano urea supports sustainable farming practices, reducing the environmental footprint of agricultural activities.
3. Economic Advantages:
- Cost Savings: Despite a potentially higher initial cost, the reduced amount required and improved yields can lead to overall savings for farmers
- Increased Yield: Some studies and applications in some countries have shown that nano urea can lead to a substantial increase in crop yields due to better nutrient availability
4. Storage and Handling:
- Longer Shelf Life: Nano urea typically has a longer shelf life compared to conventional fertilizers, which reduces waste and the need for frequent purchases.
- Ease of Transport: Its lower application volume means less bulk to transport and handle, simplifying logistics.
Cons of Nano Urea
1. Higher Initial Cost:
- Investment Barrier: The upfront cost of nano urea can be higher than traditional urea, which might deter some farmers, especially those with limited financial resources.
2. Technical Knowledge Required:
- Usage Complexity: Proper application of nano urea requires a certain level of technical knowledge and precision, which might not be readily available to all farmers, particularly in developing regions.
3. Availability Issues:
- Limited Access: Currently, the production and distribution of nano urea are not as widespread as conventional urea, potentially limiting its availability to farmers in remote or underdeveloped areas.
4. Regulatory and Safety Concerns:
- Regulatory Hurdles: The introduction of nano urea is subject to regulatory approvals and standards, which can vary significantly between countries, potentially delaying its widespread adoption.
- Safety and Health: As with any new technology, there are ongoing concerns about the long-term safety and health impacts of nano particles on humans and the environment, necessitating further research
As I said, each coin has two sides. What I am trying to do is to avoid judging but to have a deeper understanding.
#yeild #fertilisers #fertilizers #india #IFFCO #urea #nanourea #imstory #crop
Egyptian news yesterday resembled a rollercoaster: initially, all factories announced they were shutting down due to a gas supply shortage. However, later the same day, the Ministry of Petroleum and Electricity announced that gas flows would resume today.
Suppose that the Egyptian news from yesterday and the day before was the final straw that allowed the bulls to win this tenuous balance, as all markets reacted in one direction—upwards:
• AG traded at $330 per metric tonne FOB (some say that 15 vessels are waiting to load at Bontang, so it wouldn't be surprising if a trader had to cover a delivery).
• NOLA traded at $288-292 per short tonne FOB.
• Brazil reported prices as high as $340 per metric tonne CFR.
Bears (including myself) need to admit a loss in this current battle.
But you definitely know the news and have seen the above numbers. I’m now thinking about China. Back at the IFA, Chinese sellers were quoting $340 per metric tonne FOB as an “acceptable export level.”
Today, we have: RMB 2320 per metric tonne EXW (a public price) + RMB 240 per metric tonne (transportation and handling) = RMB 2560 per metric tonne FOB or $353. Okay, let’s say $353 per metric tonne FOB China. Are you catching what I’m pitching? Would $350 per metric tonne FOB AG be a potential Chinese export trigger when/if it happens?
#price #gas #urea #china #ag #brazil #usa #nola #egypt #ifa2024 #imstory
Suppose that the Egyptian news from yesterday and the day before was the final straw that allowed the bulls to win this tenuous balance, as all markets reacted in one direction—upwards:
• AG traded at $330 per metric tonne FOB (some say that 15 vessels are waiting to load at Bontang, so it wouldn't be surprising if a trader had to cover a delivery).
• NOLA traded at $288-292 per short tonne FOB.
• Brazil reported prices as high as $340 per metric tonne CFR.
Bears (including myself) need to admit a loss in this current battle.
But you definitely know the news and have seen the above numbers. I’m now thinking about China. Back at the IFA, Chinese sellers were quoting $340 per metric tonne FOB as an “acceptable export level.”
Today, we have: RMB 2320 per metric tonne EXW (a public price) + RMB 240 per metric tonne (transportation and handling) = RMB 2560 per metric tonne FOB or $353. Okay, let’s say $353 per metric tonne FOB China. Are you catching what I’m pitching? Would $350 per metric tonne FOB AG be a potential Chinese export trigger when/if it happens?
#price #gas #urea #china #ag #brazil #usa #nola #egypt #ifa2024 #imstory
Urea trading these days. Let's just watch it...
#urea #fertilizers #fertilisers #imstory #egypt #nola #ag #brazil #india
#urea #fertilizers #fertilisers #imstory #egypt #nola #ag #brazil #india
Two main topics dominated the urea market last week: the stoppage of production in Egypt due to a lack of gas supply, and China's informal introduction of a ban on urea exports, which saw international prices continue to escalate. This made me wonder: could it happen that China will not export any major quantities of urea in the second half of 2024?
One of the primary reasons for China's potential halt in urea exports is the need to ensure adequate domestic supply. China produces about 50 million tonnes of urea annually, and maintaining sufficient stocks for its own agricultural needs is crucial, especially during peak planting seasons. By restricting exports, China aims to prevent shortages that could lead to soaring domestic prices and disrupt local agricultural activities.
Could China also be considering the environmental impact of urea production? In the past, old coal-based factories were shut down due to environmental concerns. China's decision to halt urea exports may also be influenced by policies aimed at reducing industrial emissions and promoting sustainable agricultural practices. Urea production is energy-intensive and contributes to greenhouse gas emissions. By limiting exports, China can better control the environmental impact of its fertiliser industry and align with broader sustainability goals.
The potential reduction or cessation of urea exports from China will have significant implications for global markets. Countries like India, a major market for Chinese exporters, would definitely welcome the presence of Chinese urea in the market.
China's focus on domestic stability, environmental sustainability, and strategic resource management underpins the possibility of a significant reduction or halt in urea exports in 2024. Traders will need to play carefully in the second half of 2024. Remember, this market doesn’t buy the tonnes; it buys news and expectation.
Have a great week, everyone!
#china #urea #egypt #ban #environment #market #imstory
One of the primary reasons for China's potential halt in urea exports is the need to ensure adequate domestic supply. China produces about 50 million tonnes of urea annually, and maintaining sufficient stocks for its own agricultural needs is crucial, especially during peak planting seasons. By restricting exports, China aims to prevent shortages that could lead to soaring domestic prices and disrupt local agricultural activities.
Could China also be considering the environmental impact of urea production? In the past, old coal-based factories were shut down due to environmental concerns. China's decision to halt urea exports may also be influenced by policies aimed at reducing industrial emissions and promoting sustainable agricultural practices. Urea production is energy-intensive and contributes to greenhouse gas emissions. By limiting exports, China can better control the environmental impact of its fertiliser industry and align with broader sustainability goals.
The potential reduction or cessation of urea exports from China will have significant implications for global markets. Countries like India, a major market for Chinese exporters, would definitely welcome the presence of Chinese urea in the market.
China's focus on domestic stability, environmental sustainability, and strategic resource management underpins the possibility of a significant reduction or halt in urea exports in 2024. Traders will need to play carefully in the second half of 2024. Remember, this market doesn’t buy the tonnes; it buys news and expectation.
Have a great week, everyone!
#china #urea #egypt #ban #environment #market #imstory
Last week, I had a discussion about whether Nano Urea might make its way to countries outside India. Putting aside all the pros and cons of its effectiveness, one of the potential barriers to entering the EU market would be regulatory approvals and standards, which can vary significantly between countries, potentially delaying its widespread adoption.
I thought it would be worthwhile to look at the so-called “EU Fertiliser Lobby” and its main players. The fertiliser lobby in the European Union is quite substantial, exerting significant influence over agricultural and environmental policies. It includes several key players.
Copa-Cogeca
This powerful trade group represents over 22 million European farmers, their families, and agri-cooperatives. It is known for its extensive lobbying activities, particularly against stricter environmental regulations and biodiversity policies. Copa-Cogeca has close ties with EU institutions, often participating in consultations and policy drafting, which allows it to influence legislation effectively.
Fertilizers Europe
Representing over 15 fertiliser companies and seven national associations, including major firms like BASF and Yara, Fertilizers Europe actively lobbies for policies favourable to the fertiliser industry. The organisation has been involved in debates over the EU's Green Deal and other sustainability initiatives, advocating for the continued use of fertilisers and investment in low-carbon technologies.
CropLife Europe
This association represents major agrochemical companies like BASF, Bayer, Sumitomo Chemicals, Syngenta, and others producing pesticides and herbicides. CropLife Europe promotes precision farming and biopesticides as solutions for sustainable agriculture, lobbying against stringent pesticide reduction targets proposed under the EU's Farm to Fork strategy.
These groups have considerable influence on EU agricultural policy due to their strategic positioning. They often argue that environmental regulations could harm agricultural competitiveness and economic viability, advocating for more balanced approaches that include technological advancements and market-based solutions.
The influence of these lobbying groups can sometimes lead to delays or modifications in the implementation of stricter environmental policies, as they push back against measures that could reduce the use of fertilisers and pesticides. This dynamic creates a complex policy environment where sustainability goals must be balanced with the interests of powerful agricultural stakeholders.
#imstory #agriculture #lobby #fertilisers #fertilizers #eu #CopaCogeca #CropLife #BASF #Yara #Sumimoto #Syngenta #chemicals
I thought it would be worthwhile to look at the so-called “EU Fertiliser Lobby” and its main players. The fertiliser lobby in the European Union is quite substantial, exerting significant influence over agricultural and environmental policies. It includes several key players.
Copa-Cogeca
This powerful trade group represents over 22 million European farmers, their families, and agri-cooperatives. It is known for its extensive lobbying activities, particularly against stricter environmental regulations and biodiversity policies. Copa-Cogeca has close ties with EU institutions, often participating in consultations and policy drafting, which allows it to influence legislation effectively.
Fertilizers Europe
Representing over 15 fertiliser companies and seven national associations, including major firms like BASF and Yara, Fertilizers Europe actively lobbies for policies favourable to the fertiliser industry. The organisation has been involved in debates over the EU's Green Deal and other sustainability initiatives, advocating for the continued use of fertilisers and investment in low-carbon technologies.
CropLife Europe
This association represents major agrochemical companies like BASF, Bayer, Sumitomo Chemicals, Syngenta, and others producing pesticides and herbicides. CropLife Europe promotes precision farming and biopesticides as solutions for sustainable agriculture, lobbying against stringent pesticide reduction targets proposed under the EU's Farm to Fork strategy.
These groups have considerable influence on EU agricultural policy due to their strategic positioning. They often argue that environmental regulations could harm agricultural competitiveness and economic viability, advocating for more balanced approaches that include technological advancements and market-based solutions.
The influence of these lobbying groups can sometimes lead to delays or modifications in the implementation of stricter environmental policies, as they push back against measures that could reduce the use of fertilisers and pesticides. This dynamic creates a complex policy environment where sustainability goals must be balanced with the interests of powerful agricultural stakeholders.
#imstory #agriculture #lobby #fertilisers #fertilizers #eu #CopaCogeca #CropLife #BASF #Yara #Sumimoto #Syngenta #chemicals
Market participants kept exchanging news about Egyptian urea production yesterday:
“MOPCO - no change…”
“Abu Qir is down due to technical issues rather than gas supply.”
“AlexFert is 100% down due to gas supply.”
“KIMA's production is halted 100%.”
“Helwan's production is halted 100%.”
It reminded me of another story related to the gas supply cutoff and its influence on urea prices.
In the 2000s, the Port of Yuzhny in Ukraine played a crucial role in the export of urea. The terminal at Yuzhny is one of the largest for fertilizer exports in Ukraine, with an annual capacity of 3.5 million tons. Due to its geographical location, urea routes from Yuzhny included small vessels to the Turkish Black Sea ports, as well as Panamax cargoes to India.
Indirectly, many countries and market participants were involved in the 2008-2009 gas dispute between Russia and Ukraine. It was primarily driven by disagreements over gas prices, debts, and political tensions.
Gazprom, the Russian state-owned gas company, sought to increase the price of gas sold to Ukraine from the heavily subsidized rates that had been in place since the Soviet era to market rates. This was part of Russia's broader strategy to transition former Soviet states to market prices for gas.
There were significant disagreements over the amounts owed by Ukraine to Gazprom for past gas deliveries. Russia claimed that Ukraine had accumulated substantial unpaid debts, which Ukraine disputed. These debts were a central issue in the negotiations leading up to the gas cut-off.
Last but not least, the Kremlin was trying to exact revenge for a painful defeat during the Orange Revolution in 2004, when Moscow’s protégé Victor Yanukovich lost his presidential battle to the west-oriented candidate Victor Yushchenko.
On January 1, 2009, Gazprom cut off gas supplies to Ukraine after negotiations failed to resolve the pricing and debt issues. The moment of the gas cutoff was widely broadcast on Russian TV. This disruption affected not only Ukraine but also several European countries that relied on gas transiting through Ukraine. Additionally, it was a particularly cold winter.
Urea prices reacted quickly: according to CRU, Urea Prilled Bulk FOB Black Sea price changed from $215 per metric ton on December 25, 2008, to $283 per metric ton on January 15, 2009. I remember it painfully well, as one of my Ukrainian suppliers had declared Force Majeure and never supplied the tons after the gas dispute was over.
Prices held in the high-280s per metric ton FOB Yuzhny until mid-March 2009, before starting to correct downwards.
Happily, the current Egyptian situation is not related to any political conflicts but is a consequence of extremely hot weather in the region. The forecast predicts daytime temperatures above 40°C for at least 5 more days.
Let’s wait and see.
#urea #ukraine #russia #gas #fertilizers #fertilisers #odesa
#yuzhny #cru #price #imstory
“MOPCO - no change…”
“Abu Qir is down due to technical issues rather than gas supply.”
“AlexFert is 100% down due to gas supply.”
“KIMA's production is halted 100%.”
“Helwan's production is halted 100%.”
It reminded me of another story related to the gas supply cutoff and its influence on urea prices.
In the 2000s, the Port of Yuzhny in Ukraine played a crucial role in the export of urea. The terminal at Yuzhny is one of the largest for fertilizer exports in Ukraine, with an annual capacity of 3.5 million tons. Due to its geographical location, urea routes from Yuzhny included small vessels to the Turkish Black Sea ports, as well as Panamax cargoes to India.
Indirectly, many countries and market participants were involved in the 2008-2009 gas dispute between Russia and Ukraine. It was primarily driven by disagreements over gas prices, debts, and political tensions.
Gazprom, the Russian state-owned gas company, sought to increase the price of gas sold to Ukraine from the heavily subsidized rates that had been in place since the Soviet era to market rates. This was part of Russia's broader strategy to transition former Soviet states to market prices for gas.
There were significant disagreements over the amounts owed by Ukraine to Gazprom for past gas deliveries. Russia claimed that Ukraine had accumulated substantial unpaid debts, which Ukraine disputed. These debts were a central issue in the negotiations leading up to the gas cut-off.
Last but not least, the Kremlin was trying to exact revenge for a painful defeat during the Orange Revolution in 2004, when Moscow’s protégé Victor Yanukovich lost his presidential battle to the west-oriented candidate Victor Yushchenko.
On January 1, 2009, Gazprom cut off gas supplies to Ukraine after negotiations failed to resolve the pricing and debt issues. The moment of the gas cutoff was widely broadcast on Russian TV. This disruption affected not only Ukraine but also several European countries that relied on gas transiting through Ukraine. Additionally, it was a particularly cold winter.
Urea prices reacted quickly: according to CRU, Urea Prilled Bulk FOB Black Sea price changed from $215 per metric ton on December 25, 2008, to $283 per metric ton on January 15, 2009. I remember it painfully well, as one of my Ukrainian suppliers had declared Force Majeure and never supplied the tons after the gas dispute was over.
Prices held in the high-280s per metric ton FOB Yuzhny until mid-March 2009, before starting to correct downwards.
Happily, the current Egyptian situation is not related to any political conflicts but is a consequence of extremely hot weather in the region. The forecast predicts daytime temperatures above 40°C for at least 5 more days.
Let’s wait and see.
#urea #ukraine #russia #gas #fertilizers #fertilisers #odesa
#yuzhny #cru #price #imstory
Let's talk about urea (again).
Before I share my views, let me remind you - I had been bearish prior to the IFA and right after it. And it looks like I was wrong.
Someone asked me yesterday if it is the right moment to buy some quantity for the summer refill. What can I say? Urea prices remind me of a brave cyclist who decided to break away from the peloton well before the finish. The audience is watching and guessing - will he have enough stamina and endurance to finish this race first? Okay, what factors support the cyclist?
Egypt: The gas issue seems to be not just a hot weather issue, but rather a combination of hot weather and a lack of gas from the Israeli gas platform. Some say gas supply won't return to normal until the 24th.
China: The banned export has cooled down local prices. They are equivalent to $320-325 per metric tonne FOB main Chinese ports, and the current export equivalent does look attractive but... CIQ inspections are still not allowed.
India: Elections have passed. A new Fertiliser Minister has been appointed. Stocks are still high, so they won't buy much. Stocks are healthy, and prices are high now.
Brazil: $355 per metric tonne CFR is on the cards. But offers are at $365 per metric tonne CFR and above. Brazil has imported 2,432,928 metric tonnes of urea so far in 2024, still slightly below the historical pace as imports were lower than normal at the beginning of the year.
Australia: This year is a pure surprise to me, but I have never been a pro in that part of the world. Imports have reached 1,147,174 metric tonnes in 2024, an almost 41% year-to-year increase.
Gas: Funny enough, Dutch TTF prices have been climbing up since February and are EUR 35 per MWh today. I am not a big believer that European producers will be back on stream.
Agri: December 2025 corn is down from almost $5 per bushel to $4.77 per bushel today (a 4.8% decrease) and wheat has dropped even more - from $7.40 per bushel to $6.36 per bushel in just three weeks (more than a 16% decrease).
I still think that my urea cyclist will need to take a break and at some point will start to slow down. But it looks like that won't happen in the near future.
#urea #fertilisers #fertilizers #corn #wheat #brazil #egypt #india #australia #china #ifa2024 #gas #analysis
Before I share my views, let me remind you - I had been bearish prior to the IFA and right after it. And it looks like I was wrong.
Someone asked me yesterday if it is the right moment to buy some quantity for the summer refill. What can I say? Urea prices remind me of a brave cyclist who decided to break away from the peloton well before the finish. The audience is watching and guessing - will he have enough stamina and endurance to finish this race first? Okay, what factors support the cyclist?
Egypt: The gas issue seems to be not just a hot weather issue, but rather a combination of hot weather and a lack of gas from the Israeli gas platform. Some say gas supply won't return to normal until the 24th.
China: The banned export has cooled down local prices. They are equivalent to $320-325 per metric tonne FOB main Chinese ports, and the current export equivalent does look attractive but... CIQ inspections are still not allowed.
India: Elections have passed. A new Fertiliser Minister has been appointed. Stocks are still high, so they won't buy much. Stocks are healthy, and prices are high now.
Brazil: $355 per metric tonne CFR is on the cards. But offers are at $365 per metric tonne CFR and above. Brazil has imported 2,432,928 metric tonnes of urea so far in 2024, still slightly below the historical pace as imports were lower than normal at the beginning of the year.
Australia: This year is a pure surprise to me, but I have never been a pro in that part of the world. Imports have reached 1,147,174 metric tonnes in 2024, an almost 41% year-to-year increase.
Gas: Funny enough, Dutch TTF prices have been climbing up since February and are EUR 35 per MWh today. I am not a big believer that European producers will be back on stream.
Agri: December 2025 corn is down from almost $5 per bushel to $4.77 per bushel today (a 4.8% decrease) and wheat has dropped even more - from $7.40 per bushel to $6.36 per bushel in just three weeks (more than a 16% decrease).
I still think that my urea cyclist will need to take a break and at some point will start to slow down. But it looks like that won't happen in the near future.
#urea #fertilisers #fertilizers #corn #wheat #brazil #egypt #india #australia #china #ifa2024 #gas #analysis
Fertilisers conference and conventions are not only places, where market participants have a possibly to meet each other in person. There are interesting panels, talks and trends, which form a kind of “fashion” and modern trend in fertilisers. Here is me personal top of trends to watch:
Eco-Friendly Fertilisers: There’s a growing demand for organic and eco-friendly fertilizers as farmers and consumers become more environmentally conscious. Products that minimize environmental impact while maintaining productivity are in high demand.
Precision Agriculture: Advanced technologies like drones, IoT, and AI are revolutionizing how fertilizers are applied. Precision agriculture allows for the targeted application of nutrients, reducing waste and increasing efficiency.
Regulatory Changes: New regulations are pushing the industry towards more sustainable practices. Policies aimed at reducing carbon emissions and promoting organic fertilizers are shaping the market landscape.
Innovative Products: The development of slow-release and controlled-release fertilizers, as well as biofertilizers, is gaining momentum. These innovations help in reducing nutrient runoff and improving soil health.
Market Dynamics: Fluctuating raw material prices and supply chain disruptions continue to impact the fertilizer market. Companies are adapting by diversifying sources and investing in local production capabilities.
Feel free to add your thoughts or share how your organization is adapting to these trends!
#fertilisers #fertilizers #agro #farm #industry #fertiliserIndustry #sustainability #agriculture #Innovation #ecofriendly #imstory
Eco-Friendly Fertilisers: There’s a growing demand for organic and eco-friendly fertilizers as farmers and consumers become more environmentally conscious. Products that minimize environmental impact while maintaining productivity are in high demand.
Precision Agriculture: Advanced technologies like drones, IoT, and AI are revolutionizing how fertilizers are applied. Precision agriculture allows for the targeted application of nutrients, reducing waste and increasing efficiency.
Regulatory Changes: New regulations are pushing the industry towards more sustainable practices. Policies aimed at reducing carbon emissions and promoting organic fertilizers are shaping the market landscape.
Innovative Products: The development of slow-release and controlled-release fertilizers, as well as biofertilizers, is gaining momentum. These innovations help in reducing nutrient runoff and improving soil health.
Market Dynamics: Fluctuating raw material prices and supply chain disruptions continue to impact the fertilizer market. Companies are adapting by diversifying sources and investing in local production capabilities.
Feel free to add your thoughts or share how your organization is adapting to these trends!
#fertilisers #fertilizers #agro #farm #industry #fertiliserIndustry #sustainability #agriculture #Innovation #ecofriendly #imstory
What should a new trading company offer to the market?
Entering the competitive world of fertiliser trading requires more than just a business plan; it demands a strategic edge to stand out. A new trading company must carefully consider what it brings to the table to ensure success and sustainability.
A profound grasp of the market is crucial. This means assembling a team with extensive experience and knowledge. Without the right people, even the most detailed market analysis can fall flat.
Strong relationships with producers and buyers are vital. These connections, built and maintained over long years of mutual trust, can make or break trading opportunities. Trust and reliability are currencies as valuable as cash in this industry.
A deep pocket is certainly advantageous, providing the ability to seize opportunities and weather market fluctuations. However, financial resources are only effective when paired with market knowledge and strategic application.
Owning assets such as transportation and logistics capabilities can provide a significant edge. Yet, these assets must be managed by a team that understands both the trading and logistical landscapes.
Ultimately, all these elements—market understanding, relationships, financial strength, and valuable assets—depend on one thing: having the right team in place. Before a new trading company can offer anything meaningful to the market, it must first build an operational, skilled, and cohesive team. This team is the foundation upon which all other strengths are built.
Building a successful trading company starts with investing in people. A team of experienced, knowledgeable, and well-connected employees is the most valuable asset any new trading company can have.
But then we face another dilemma: should a new company buy employees from the market, sometimes poaching them from competitors, or invest in growing their own team?
#imstory #fertiliserIndustry #fertilizers #fertilisers #trading #market #teambuilding
Entering the competitive world of fertiliser trading requires more than just a business plan; it demands a strategic edge to stand out. A new trading company must carefully consider what it brings to the table to ensure success and sustainability.
A profound grasp of the market is crucial. This means assembling a team with extensive experience and knowledge. Without the right people, even the most detailed market analysis can fall flat.
Strong relationships with producers and buyers are vital. These connections, built and maintained over long years of mutual trust, can make or break trading opportunities. Trust and reliability are currencies as valuable as cash in this industry.
A deep pocket is certainly advantageous, providing the ability to seize opportunities and weather market fluctuations. However, financial resources are only effective when paired with market knowledge and strategic application.
Owning assets such as transportation and logistics capabilities can provide a significant edge. Yet, these assets must be managed by a team that understands both the trading and logistical landscapes.
Ultimately, all these elements—market understanding, relationships, financial strength, and valuable assets—depend on one thing: having the right team in place. Before a new trading company can offer anything meaningful to the market, it must first build an operational, skilled, and cohesive team. This team is the foundation upon which all other strengths are built.
Building a successful trading company starts with investing in people. A team of experienced, knowledgeable, and well-connected employees is the most valuable asset any new trading company can have.
But then we face another dilemma: should a new company buy employees from the market, sometimes poaching them from competitors, or invest in growing their own team?
#imstory #fertiliserIndustry #fertilizers #fertilisers #trading #market #teambuilding
Just to continue and, probably, finish sharing my idea of the modern trading company.
In our competitive world of trading, one of the most important decisions is whether to build your company around an invited "star" trader or to grow your own team from within. I have personally participated in both approaches, and like everywhere, they have their merits and challenges.
What’s almost undoubted is that a star trader brings invaluable market knowledge and an established network of clients, providing an immediate boost to your trading operations. But to attract such talent, companies must offer significantly higher salaries and benefits. Additionally, there’s always the risk that if this trader receives a better offer, they might leave, taking their expertise and client base with them, which can disrupt the business.
Growing your own team requires time and resources to train employees, but it ensures they are aligned with your company's values and culture. Such employees, developed internally, tend to show greater loyalty and commitment.
The big question mark here is timing. Success in this approach depends on whether shareholders are willing to wait for the team to mature and handle big tasks. But I know for sure this method fosters a more cohesive and environmentally friendly company atmosphere.
I’m a big football fan (the Georgian squad is surprisingly good despite a loss, by the way). If we apply this situation to a football team: success hinges not just on star players but on the overall strategy and leadership of the manager (akin to the CEO). A balanced approach, where young talents are nurtured while bringing in experienced players to guide them, often yields the best results.
To me, the ideal strategy is a blend of both approaches. Having a mentor or experienced trader to share knowledge and guide the development of a homegrown team can provide the best of both worlds. This helps in growing the company sustainably while leveraging the immediate benefits of market expertise.
#imstory #fertiliserIndustry #fertilizers #fertilisers #trading #market #teambuilding
In our competitive world of trading, one of the most important decisions is whether to build your company around an invited "star" trader or to grow your own team from within. I have personally participated in both approaches, and like everywhere, they have their merits and challenges.
What’s almost undoubted is that a star trader brings invaluable market knowledge and an established network of clients, providing an immediate boost to your trading operations. But to attract such talent, companies must offer significantly higher salaries and benefits. Additionally, there’s always the risk that if this trader receives a better offer, they might leave, taking their expertise and client base with them, which can disrupt the business.
Growing your own team requires time and resources to train employees, but it ensures they are aligned with your company's values and culture. Such employees, developed internally, tend to show greater loyalty and commitment.
The big question mark here is timing. Success in this approach depends on whether shareholders are willing to wait for the team to mature and handle big tasks. But I know for sure this method fosters a more cohesive and environmentally friendly company atmosphere.
I’m a big football fan (the Georgian squad is surprisingly good despite a loss, by the way). If we apply this situation to a football team: success hinges not just on star players but on the overall strategy and leadership of the manager (akin to the CEO). A balanced approach, where young talents are nurtured while bringing in experienced players to guide them, often yields the best results.
To me, the ideal strategy is a blend of both approaches. Having a mentor or experienced trader to share knowledge and guide the development of a homegrown team can provide the best of both worlds. This helps in growing the company sustainably while leveraging the immediate benefits of market expertise.
#imstory #fertiliserIndustry #fertilizers #fertilisers #trading #market #teambuilding
Urea prices have stabilized and may even start to correct. As usual during these periods, there is speculation about when major players, like India, will issue the next tender or if significant exporters, such as China, will ease export policies. Here’s a reminder of when urea is applied depending on the region and time of year.
Urea application timing varies significantly across different regions of the world, influenced by climatic conditions, crop types, and agricultural practices.
North America
In North America, particularly the United States and Canada, urea is often applied in both spring and fall. The primary spring application supports the growth of crops such as corn, wheat, and soybeans. Fall application is common in regions with milder winters and is used to build soil nitrogen levels for the next planting season. In colder regions, fall application must be managed carefully to avoid nitrogen loss due to volatilization or leaching.
Europe
European farmers typically apply urea in the spring and early summer to coincide with the peak growing periods of crops like wheat, barley, and rapeseed. Spring application helps meet the initial nutrient demands of the plants. In some Mediterranean countries, where mild winters allow for winter cropping, urea may also be applied in late fall or winter.
Asia
In Asia, the timing of urea application varies widely due to diverse climatic zones and cropping patterns. In South Asia, such as India and Pakistan, urea is predominantly applied during the kharif (monsoon) and rabi (winter) cropping seasons. For rice, urea is often applied at the time of transplanting and in split doses during the growing season to maximize nitrogen use efficiency. In East Asia, including China and Japan, urea is applied during the spring for crops like rice and wheat, and in the summer for crops like maize.
Africa
In many parts of Africa, urea application is concentrated around the main rainy season to coincide with the planting of staple crops like maize, sorghum, and millet. The timing ensures that the fertiliser is utilized effectively by the growing crops. In regions with bimodal rainfall patterns, such as parts of East Africa, urea may be applied during both the short and long rainy seasons.
South America
In South America, urea application aligns with the planting seasons of key crops. In Brazil, for instance, urea is applied primarily during the spring and summer months to support the growth of crops like soybeans, corn, and sugarcane. The tropical and subtropical climates allow for multiple cropping seasons, necessitating split applications to meet crop demands throughout the year.
Did I forget anything?
#urea #fertilizers #fertilizers #africa #usa #asia #canada #india #china #europe #imstory #application #agriculture
Urea application timing varies significantly across different regions of the world, influenced by climatic conditions, crop types, and agricultural practices.
North America
In North America, particularly the United States and Canada, urea is often applied in both spring and fall. The primary spring application supports the growth of crops such as corn, wheat, and soybeans. Fall application is common in regions with milder winters and is used to build soil nitrogen levels for the next planting season. In colder regions, fall application must be managed carefully to avoid nitrogen loss due to volatilization or leaching.
Europe
European farmers typically apply urea in the spring and early summer to coincide with the peak growing periods of crops like wheat, barley, and rapeseed. Spring application helps meet the initial nutrient demands of the plants. In some Mediterranean countries, where mild winters allow for winter cropping, urea may also be applied in late fall or winter.
Asia
In Asia, the timing of urea application varies widely due to diverse climatic zones and cropping patterns. In South Asia, such as India and Pakistan, urea is predominantly applied during the kharif (monsoon) and rabi (winter) cropping seasons. For rice, urea is often applied at the time of transplanting and in split doses during the growing season to maximize nitrogen use efficiency. In East Asia, including China and Japan, urea is applied during the spring for crops like rice and wheat, and in the summer for crops like maize.
Africa
In many parts of Africa, urea application is concentrated around the main rainy season to coincide with the planting of staple crops like maize, sorghum, and millet. The timing ensures that the fertiliser is utilized effectively by the growing crops. In regions with bimodal rainfall patterns, such as parts of East Africa, urea may be applied during both the short and long rainy seasons.
South America
In South America, urea application aligns with the planting seasons of key crops. In Brazil, for instance, urea is applied primarily during the spring and summer months to support the growth of crops like soybeans, corn, and sugarcane. The tropical and subtropical climates allow for multiple cropping seasons, necessitating split applications to meet crop demands throughout the year.
Did I forget anything?
#urea #fertilizers #fertilizers #africa #usa #asia #canada #india #china #europe #imstory #application #agriculture
Logically, I would be speaking about other gas issues in Egypt and the earlier-than-expected Indian urea tender, but I would prefer to let the dust settle first before making more predictions.
Instead, let's have another little "fertiliser use guide" now, this time about phosphates.
Here's a brief overview of common practices in major agricultural regions. I have tried to make it more visible and reading-friendly 🙂 (as my son recommended)
🇺🇸 USA:
- Corn Belt: Fall or early spring before planting
- Winter Wheat: At seeding in fall
🇨🇦 Canada:
- Prairies: Early spring or fall, depending on the crop
🇧🇷 Brazil:
- Soybeans: Pre-planting in September-October
🇨🇳 China:
- Rice: Split application - pre-planting and mid-season
🇮🇳 India:
- Winter Wheat: At sowing in October-November
- Rice: Pre-planting in June-July
🇪🇺 Europe:
- Winter Cereals: At seeding in fall
- Spring Crops: Pre-planting in early spring
🇦🇺 Australia:
- Winter Cereals: At seeding in autumn
🇰🇪🇹🇿 East Africa:
- Maize: At planting, coinciding with long rains (March-May)
- Coffee: Split application - before short rains (Oct-Nov) and long rains (March-April)
🇳🇬🇬🇭 West Africa:
- Cocoa: Before the rainy season (April-May)
- Cotton: At planting (May-June)
Mind you, I’m not an agronomist and these are general guidelines. Actual timing can vary based on local conditions, soil tests, and crop-specific needs.
#fertilizers #fertilisers #imstory #agriculture #agro #brazil #phosphates #africa #india #china #europe #canada #india #australia #world
Instead, let's have another little "fertiliser use guide" now, this time about phosphates.
Here's a brief overview of common practices in major agricultural regions. I have tried to make it more visible and reading-friendly 🙂 (as my son recommended)
🇺🇸 USA:
- Corn Belt: Fall or early spring before planting
- Winter Wheat: At seeding in fall
🇨🇦 Canada:
- Prairies: Early spring or fall, depending on the crop
🇧🇷 Brazil:
- Soybeans: Pre-planting in September-October
🇨🇳 China:
- Rice: Split application - pre-planting and mid-season
🇮🇳 India:
- Winter Wheat: At sowing in October-November
- Rice: Pre-planting in June-July
🇪🇺 Europe:
- Winter Cereals: At seeding in fall
- Spring Crops: Pre-planting in early spring
🇦🇺 Australia:
- Winter Cereals: At seeding in autumn
🇰🇪🇹🇿 East Africa:
- Maize: At planting, coinciding with long rains (March-May)
- Coffee: Split application - before short rains (Oct-Nov) and long rains (March-April)
🇳🇬🇬🇭 West Africa:
- Cocoa: Before the rainy season (April-May)
- Cotton: At planting (May-June)
Mind you, I’m not an agronomist and these are general guidelines. Actual timing can vary based on local conditions, soil tests, and crop-specific needs.
#fertilizers #fertilisers #imstory #agriculture #agro #brazil #phosphates #africa #india #china #europe #canada #india #australia #world
I have read today that hedge funds are now the shortest they have been in agricultural futures since late April at -496k contracts (-$11b). Funds have been selling, especially in grains, actively.
Whilst everything indeed looks bad (both wheat and corn), why not make an assumption if it's far away from the bottom? I like using corn, as it's often considered the main urea-consuming agricultural commodity.
Price Analysis:
- Current price: 433'2 (433.25 cents per bushel)
- Down 6'2 (6.25 cents) or 1.42% since yesterday
Volume Analysis:
- Volume bars at the bottom show increased trading activity in March, May and early July
- Recent volume appears lower compared to those peaks
Price Levels:
- Strong resistance around 480'0 to 490'0 level
- Support levels appear around 410'0 and 430'0
Recent Trend:
- Downward trend since May, with lower highs and lower lows
- Currently near the bottom of the recent trading range
The corn futures are in a downtrend but approaching potential support levels. The 430'0 area has acted as support previously. Volume has decreased recently, which could indicate potential trend exhaustion.
Assumption on upward movement:
Corn prices may start an upward movement if:
1. The current support around 430'0 holds
2. A catalyst emerges (e.g. weather concerns, increased demand, reduced supply forecasts)
3. The price breaks above the short-term downtrend line, approximately around 450'0
An upward move could potentially begin in the next few weeks if these conditions are met. However, without a fundamental change in market conditions, any upward movement may face resistance at previous highs around 470'0 to 480'0.
When is our next USDA report? This coming Friday, if I'm not mistaken?
#corn #usda #hedge #funds #usa #urea #fertilizers #fertilisers #agro #agriculture #imstory #cme
Whilst everything indeed looks bad (both wheat and corn), why not make an assumption if it's far away from the bottom? I like using corn, as it's often considered the main urea-consuming agricultural commodity.
Price Analysis:
- Current price: 433'2 (433.25 cents per bushel)
- Down 6'2 (6.25 cents) or 1.42% since yesterday
Volume Analysis:
- Volume bars at the bottom show increased trading activity in March, May and early July
- Recent volume appears lower compared to those peaks
Price Levels:
- Strong resistance around 480'0 to 490'0 level
- Support levels appear around 410'0 and 430'0
Recent Trend:
- Downward trend since May, with lower highs and lower lows
- Currently near the bottom of the recent trading range
The corn futures are in a downtrend but approaching potential support levels. The 430'0 area has acted as support previously. Volume has decreased recently, which could indicate potential trend exhaustion.
Assumption on upward movement:
Corn prices may start an upward movement if:
1. The current support around 430'0 holds
2. A catalyst emerges (e.g. weather concerns, increased demand, reduced supply forecasts)
3. The price breaks above the short-term downtrend line, approximately around 450'0
An upward move could potentially begin in the next few weeks if these conditions are met. However, without a fundamental change in market conditions, any upward movement may face resistance at previous highs around 470'0 to 480'0.
When is our next USDA report? This coming Friday, if I'm not mistaken?
#corn #usda #hedge #funds #usa #urea #fertilizers #fertilisers #agro #agriculture #imstory #cme
My little thoughts on the forthcoming (July 8th) Indian tender.
I think it will be mainly a Russian-AG-Indian affair.
Firstly, there's not much hope for China, assuming they have declared their position clearly and loudly.
Secondly, the opening stocks in India are expected to be a healthy 10.5 million metric tonnes. This makes me feel that they won’t even need a million tonnes, but rather half of it.
Thirdly, surprisingly, the Russians might not be under great pressure, as some turnarounds are ongoing.
So, 250k metric tonnes from Russia in combination with an equal quantity from the AG world should make all the participants happy.
Price? Will 0.5 million metric tonnes to be shipped within 50 days (10k metric tonnes per day production) make this market sensitive?
#urea #imstory #fertilizers #fertilisers #india #tender #china #russia #ag
I think it will be mainly a Russian-AG-Indian affair.
Firstly, there's not much hope for China, assuming they have declared their position clearly and loudly.
Secondly, the opening stocks in India are expected to be a healthy 10.5 million metric tonnes. This makes me feel that they won’t even need a million tonnes, but rather half of it.
Thirdly, surprisingly, the Russians might not be under great pressure, as some turnarounds are ongoing.
So, 250k metric tonnes from Russia in combination with an equal quantity from the AG world should make all the participants happy.
Price? Will 0.5 million metric tonnes to be shipped within 50 days (10k metric tonnes per day production) make this market sensitive?
#urea #imstory #fertilizers #fertilisers #india #tender #china #russia #ag
Today's post may be a bit boring, as it's more about the comparison of numbers. But I like numbers, as numbers are easy to read.
Fertiliser prices play a significant role in determining the final price of agricultural commodities. As a crucial component of growing costs, fertilisers impact farmers' profit margins and influence market prices of crops like corn and wheat. Given that fertiliser costs are incurred "today" while the selling of harvested crops happens "tomorrow," understanding these dynamics is essential for evaluating affordability and economic viability.
Comparing prices from the previous year to the current year provides insights into the trends and economic pressures faced by farmers. Here are the key figures:
Corn:
- On 27/6/2023: $5.56 per bushel
- On 27/6/2024: $4.33 per bushel
Wheat:
- On 27/6/2023: $7.16 per bushel
- On 27/6/2024: $5.98 per bushel
Fertiliser Prices (FOB NOLA as to me it’s most traded basis in the world):
Urea:
- On 27/6/2023: $295 per short tonne
- On 27/6/2024: $300 per short tonne
DAP:
- On 27/6/2023: $451 per short tonne
- On 27/6/2024: $543 per short tonne
To determine the affordability of fertilisers, we can calculate the ratio of crop prices to fertiliser costs. This index provides a measure of how much crop revenue is available per unit cost of fertiliser.
For Urea:
Corn
- 2023: approx 0.0188
- 2024: approx 0.0144
Wheat
- 2023: approx 0.0243
- 2024: approx 0.0199
For DAP:
Corn:
- 2023: approx 0.0123
- 2024: approx 0.0080
Wheat:
- 2023: approx 0.0159
- 2024: approx 0.0110
Comparing the affordability indices, it is clear that the ability to cover fertiliser costs from crop revenue has decreased from 2023 to 2024. This implies that fertilisers have become less affordable over the past year. Specifically:
- The affordability index for urea has decreased by approximately 23.4% for corn and 18.1% for wheat.
- The affordability index for DAP has decreased significantly by approximately 35.0% for corn and 30.8% for wheat.
This decrease in the affordability index indicates that less crop revenue is now available to cover fertiliser costs compared to the previous year, which could strain farmers' profit margins and overall financial health.
Of course, now both wheat and corn are almost at the bottom of their recent downtrend movements, and a good farmer needs to follow the affordability ratios to understand when they have "to lock" prices of the future crops and when to buy fertilisers for their next application campaign. As well as a good trader, who has to understand the limits of where prices may go either way. It’s part of the game!
#agriculture #wheat #corn #price #urea #dap #index #imstory #nola
Fertiliser prices play a significant role in determining the final price of agricultural commodities. As a crucial component of growing costs, fertilisers impact farmers' profit margins and influence market prices of crops like corn and wheat. Given that fertiliser costs are incurred "today" while the selling of harvested crops happens "tomorrow," understanding these dynamics is essential for evaluating affordability and economic viability.
Comparing prices from the previous year to the current year provides insights into the trends and economic pressures faced by farmers. Here are the key figures:
Corn:
- On 27/6/2023: $5.56 per bushel
- On 27/6/2024: $4.33 per bushel
Wheat:
- On 27/6/2023: $7.16 per bushel
- On 27/6/2024: $5.98 per bushel
Fertiliser Prices (FOB NOLA as to me it’s most traded basis in the world):
Urea:
- On 27/6/2023: $295 per short tonne
- On 27/6/2024: $300 per short tonne
DAP:
- On 27/6/2023: $451 per short tonne
- On 27/6/2024: $543 per short tonne
To determine the affordability of fertilisers, we can calculate the ratio of crop prices to fertiliser costs. This index provides a measure of how much crop revenue is available per unit cost of fertiliser.
For Urea:
Corn
- 2023: approx 0.0188
- 2024: approx 0.0144
Wheat
- 2023: approx 0.0243
- 2024: approx 0.0199
For DAP:
Corn:
- 2023: approx 0.0123
- 2024: approx 0.0080
Wheat:
- 2023: approx 0.0159
- 2024: approx 0.0110
Comparing the affordability indices, it is clear that the ability to cover fertiliser costs from crop revenue has decreased from 2023 to 2024. This implies that fertilisers have become less affordable over the past year. Specifically:
- The affordability index for urea has decreased by approximately 23.4% for corn and 18.1% for wheat.
- The affordability index for DAP has decreased significantly by approximately 35.0% for corn and 30.8% for wheat.
This decrease in the affordability index indicates that less crop revenue is now available to cover fertiliser costs compared to the previous year, which could strain farmers' profit margins and overall financial health.
Of course, now both wheat and corn are almost at the bottom of their recent downtrend movements, and a good farmer needs to follow the affordability ratios to understand when they have "to lock" prices of the future crops and when to buy fertilisers for their next application campaign. As well as a good trader, who has to understand the limits of where prices may go either way. It’s part of the game!
#agriculture #wheat #corn #price #urea #dap #index #imstory #nola