Fertilizer '09 ?

[Kodiak]

Both arguments - buy now or wait - hold credence. A tough call indeed.

Another potential market mover is the macro economic situation with the US international inflation/deflation battles, the US and international banking situation and US deficits etc. How are those problems going to work themselves out? Throw in geo-political tensions like Iran and wow, I don't think its ever been less clear what the future holds.

[parsley]

Russian fertilizer, anyone?


QUOTE
WINNIPEG FREE PRESS
July 24
by Larry Kusch

CWB to send less grain north

The Canadian Wheat Board said Wednesday it expects to export "significantly" less grain through the Port of Churchill this season because of low pre-harvest supplies.

That would be a temporary setback for the port, which is coming off a banner 2007 season that saw grain volumes soar and featured the first inbound cargo shipment -- a load of fertilizer from Russia -- in recent memory.

Last year, the wheat board shipped 640,000 tonnes of grain through the northern Manitoba port -- a three-decade high -- as it attempted to maximize exports in a high-price environment, CWB spokeswoman Maureen Fitzhenry said.

But Prairie grain bins are now virtually empty. And that's bad news for Churchill, which relies on carryover stocks at the start of its short shipping season. "We do expect a (shipping) program through Churchill that's significantly reduced from last year for that reason alone," Fitzhenry said, adding she couldn't speculate on how much grain the CWB might direct through the port.

Also working against the Churchill port, Fitzhenry said, is the fact some foreign grain buyers are holding off on purchases right now in the hope that prices will fall.

Normally, the first ocean vessel arrives in Churchill in late July.

This year, the first ship, the Dimitris S, is due on Aug. 3. It will carry 46,000 tonnes of red spring wheat bound for Sudan. A second vessel isn't scheduled to arrive until Aug. 10.

But Michael Ogborn, managing director of operations for Denver-based OmniTRAX, which owns the port and the rail line leading to it, said he's optimistic Churchill can overcome the anticipated slow start and enjoy "a pretty decent year." Last season, the port did not handle any non-CWB crops, something it hopes to rectify this year, he said.

In the last dozen years, Churchill has shipped as much as 710,578 tonnes of grain (including non-board shipments) and as little as 318,411 tonnes, according to the Churchill Gateway Development Corp.

Meanwhile, Ogborn said, Churchill will again receive "at least one shipment" of fertilizer from Russia, likely in the latter part of next month.

It is also involved in negotiations to handle other products, but these likely won't materialize until at least 2009, when a new bulk handling facility at the port is set to be built, he said.

The port received a boost last fall when Prime Minister Stephen Harper paid a visit and announced a $68-million port and rail-line improvement package, in partnership with the province and OmniTRAX. UNQUOTE

larry.kusch@freepress.mb.ca

[Fransisco]

At this point I'd say flipping a coin will give you as good an answer as any. If we knew what oil was going to do over the next 12 months we'd know what to do about our fertilizer needs.

[boarderbloke]

guys, thanks for all your responses, and discussion! just to comment back to some of them..
Kodiak, you've got one good retailer if he'll let you price today with now money down, the three i'm trying to deal with here say "their quoted price is only good for one day" not one week, not a couple days, just today! and only if you put the money down today!
Silverback, talk of summerfallow isn't wide spreed here, many are still dreaming about how high grain prices still might go! i however and seriously considering a chemfallow program and am asking about glyphosate quotes at the same time(we're on the dry side here anyway)
Ron, we don't have manure in the area, and as far as pulses go, i am certainly looking at increasing that area and are seeking quotes for granular inoculate now, but nobody wants to give a quote on new product! the problem with pulses, is that they'll be flooded with '09 production and we'll soon see 10-12 cent lentils and $3.oo peas!
Snappy, my understanding is that it is possible to skip a years application of phosphate without much difference in yield(netting out the input cost) if you have been regularly been applying phosphate over the years! i will be doing this and spending my fert allotment on what gets me the biggest bang for the buck! if crude prices were to fall back to that 70-80/bbl range, basically half from it's high(because of USA economy, or global economy or congress's threat to go after speculators, or Obama's push to green energy, Wall street thinks the 'energy cow's been sucked dry' or whatever...) fert will have to drop big time, and that could all happen before spring(the USA's general election is only about 100 days away!
Dave4441, if you've bought already, you might be laughing all the way to the bank as i was last year when i'd bought in Aug. but does anyone here give any credence to the Sask Ag's "Crop Planning Guide" i printed it off the internet yesterday and inserted up dated numbers for fert , fuel, & chem on the expense side and using the PRO(after freight and handling) and using the same yield of 31.7(thought it might be reasonable if i cut my fert rate some) Crap, there wasn't much profit left!!!
SK#, thanks for keeping us up on the whole sale fert prices, i often go to that 'yara.com' site. i agree, i just don't see China and India paying that much for fert, and China will back out of a deal if it sees prices dropping. corn'09 has been going down basically for the last 6 wks and will be under $5.oo/bus by months end(that's just the futures price, not net) that's a long way from $8.oo something.
Mcfarms, i tend to agree with you that fert prices, despite the hype, might very well be at or near their highs. but the other half of the equation has to be taken into account, that being as you said, global grain production will be up across the world, and even though supplies will still be tighter than we all are use to "grain buyers will go back to their old pattern of buying hand to mouth, that way keeping prices suppressed" i won't be prepared to pay 2.5 times the avg historic fert price and watch '09 grain prices drop. if weather cooperates with the US bean and corn crop from now out to harvest, that will be all it takes to slash '09 crop price offers. the US growers will think twice about fert use(besides, they have programs)
BreadWinner, i agree completely, i too have been watching gas prices, and if fert prices hold and gas prices drop, there'll be more money in buying shares in gas companies than there will be in buying fert, the capital gain and div will certainly pay for the glyphosate to chemfallow! i also agree with your comment about China backing out of deals.

[Kodiak]

I have to pay for the 28-0-0 and the 10-34-0 by Sept 15 to hold these prices. No price protection.

As it looks now, the 10-34-0 will be delivered by then, but not the 28-0-0.

Think what I might do is buy 75% of P and 100% of N. Gamble on the K and S.

[cottonpicken]

Actually Kodiak all those problems make the future more clear.

And its not going to be deflation.

At some point the demand will be killed and prices for fertilizer will drop.

My money is 62% higher nitrogen price come febuary.(62% higher than the previous febuary)

[Kodiak]

How do you arrive at that conclusion?

[Burbert]

Solution, over and over again. Formula, use less, grow less, more Summerfallow, spray less chemical. Screw our friends at the grain company, they are ready to screw us all the time. We just line up and say, when is out turn, we love farming!

[cottonpicken]

History.............

[vvalk]

Why do people here think that fert demand will be down. US farmers getting 150 to 200 bus corn at $% to $8 per bushel. There is $1000 per acre profit on some of those farms. There will be lots of money around to pay for fertilizer. Unless you have paid off land and machinery, chemfallowing is out of the question. Even at $1000 N, it still will cost you to cut back. Trying to find a reason not to buy fert will cost you in the end.