Fertilizer Read Article and then tell me Who is Lying!

[SASKFARMER3]

Fertilizer! Read the Leader post today's fertilizer Article Agrium profits almost triple and then tell me Who is Lying!
The guy is talking how our price of grain has gone to three times its normal level and that's why we are adjusting out prices.
What the hell planet is he from.
Canola in his mind $18.00 vs 11 today.
HRS in his mind $12.00 vs 7 CWB or less.
ETC ETC> or do they no the crash is near and its all about propping up share value for its investors.
either way what a crock.

[Kodiak]

The following is a June 30 report from Mosaic. Not sure who the intended audience was, but here it is for anybody who wants to read it. It had nice charts and pictures too, but I don't know how to cut and paste them here......


Phosphate Outlook
Calm Before the Storm?
June 30, 2008
Fundamentals Forecast to Tighten

• Phosphate prices have stabilized or declined slightly following the end of the spring application season and just ahead of peak summer shipments to key importing countries such as Brazil and India. This seasonal lull appears to be a calm before the storm. Based on our handicapping of potential developments, fundamentals are forecast to strengthen significantly during the next six months.

• The same factors that have driven prices to record levels during the first half of this year – namely strong demand prospects, a big expected drop in Chinese exports and higher raw material costs – are expected to tighten the phosphate market even further during the second half of the year.

Positive Demand Prospects

• Recent increases in agricultural commodity prices continue to under-gird a strong phosphate demand outlook worldwide. For example, the 2009 new crop prices for corn, soybeans and wheat climbed to $6.55 per bushel, $14.79 per bushel and $9.40 per bushel, respectively, at the end of June.

• Despite steep increases in crop input costs, farm economics remain highly profitable for most crops in most regions of the world. That is expected to keep phosphate demand growing at the higher rates of the past few years.

• Record prices and production will just stop rather than reverse the decline in global grain and oilseed stocks this decade. In fact, the latest USDA statistics show that inventories of the 16 leading grain and oilseed crops will increase only 7.4 million tonnes this year (total grain and oilseed use is projected to total 2.56 billion tonnes in 2008/09!).

• U.S. phosphate use is forecast to increase 2% to 3% in 2008/09 given the prospect of a rebound in corn acreage to at least the mid-90 million acre range next spring. The latest USDA estimates indicate that U.S. corn stocks will plummet to less than 675 million bushels by the end of the 2008/09 crop year due to a smaller 2008 crop and continued strong demand from both domestic and offshore buyers. USDA right now is evaluating whether to release CRP acres for the 2009 planting season.

• As a result, U.S. DAP/MAP shipments are forecast to remain at high levels in 2008/09. In fact, shipments are projected to total 7.7 million tons, the second highest level in recent history but down about 3% or 260,000 tons from 2007/08.

• U.S. DAP/MAP shipments climbed to a record 7.9 million tons in 2007/08, an increase of 10% or more than 700,000 tons from a year earlier. U.S. phosphate use, however, likely declined about 2% due mostly to the drop in planted corn acreage. Producers no doubt shipped more product into the pipeline than was used in 2007/08, but some restocking was needed given the hard flushing of the system during the two previous years.

[Kodiak]

Here is the rest of the report from Mosaic. It is a bit of a lengthy article, so I split it into 2 postings.....



A Drop in Chinese Phosphate Exports

• A pick-up in U.S. exports is forecast to more than offset any decline in domestic shipments this fertilizer year. In fact, U.S. DAP/MAP exports are projected to rebound about 1.0 million tons to 8.0 million tons in 2008/09.

• More exports are needed from U.S. producers because of a large expected drop in Chinese phosphate exports in 2008. China exported 4.0 million tonnes of DAP and MAP in 2007, up sharply from about 1.0 million tonnes in 2006. However, we estimate that Chinese producers shorted local customers by as much as 2.0 million tonnes last year. Chinese planners imposed a 35% export tax on all phosphate products on January 1 and then increased this rate to 135% on April 20 in order to shut off exports and insure adequate supplies for domestic farmers.

• The higher export tax is in effect until October 1, but most analysts expect that the government will extend the 135% rate through at least the end of 2008. As a consequence, Chinese DAP/MAP exports are projected to drop in half to about 2.0 million tonnes in 2008.

• The latest statistics from China Customs show that producers exported more DAP/MAP during the first five months of this year than a year ago. In fact, Chinese DAP/MAP exports during the first five months of 2008 totaled almost 1.2 million tonnes, up 31% or about 280,000 tonnes from a year earlier. Much of this increase occurred in January and included product that was sold and custom cleared before export taxes were increased. Exports have declined during the last couple of months and are expected to remain at much lower levels for the rest of 2008.

• China exported 3.0 million tonnes of DAP/MAP during the last seven months of 2007. If our forecast of 2.0 million tonnes is on target, then that would imply that China will export just 0.8 million tonnes during the rest of this year or 2.2 million tonnes less than a year ago. The loss of these tonnes creates a big hole that other suppliers will need to fill during the next several months.

Raw Materials Cost Pressures

• Raw materials costs continue to escalate. Phosphate rock prices fob Morocco for Q3 shipment have increased to the $450 to $500 per tonne range, up another $100 per tonne from Q2 and up almost $300 per tonne from Q1.

• Sulphur prices also continue their climb into uncharted territory. The price of sulphur delivered to key Asian markets has increased to the $850 per tonne range for Q3 shipments.

• Ammonia prices likely bottomed in June at $515 per tonne delivered Tampa. July deliveries were priced at $585 per tonne and ammonia prices appear headed back to more than $600 per tonne due to the surge in urea prices, numerous production outages and rising natural gas costs in North America, Europe and the FSU.

• The cost of the three raw materials alone delivered to India has now climbed to more than $1,220 per tonne of DAP.

Extremely Low Projected U.S. Producer Stocks

• Based on these forecasts and assumptions, U.S. DAP/MAP producer stocks are forecast to stay at extremely low levels throughout the 2008/09 fertilizer year. In fact, month-end stocks are projected to drop below the low levels of last year during the next six months.

• This analysis includes additional production from the re-start of one phosphoric acid line at Mosaic’s South Pierce plant beginning in November 2008. This is expected to add about 250,000 tonnes of DAP/MAP during the last half of the 2008/09 fertilizer year.

[Kodiak]

Keep in mind the date when the above was written - June 30, at the recent peak in ag commodity prices. It would be interesting to know if their perspectives have changes in the last 40 days.....

[agstar77]

What goes up usually comes down, Law of Gravity. While the general long term trend is up , Fertilizer will see reverses in the trend , be patient. Agrium ceo was on BNN hyping how farmers were buying for next spring to guarantee supply. If you feel prices are going up , buy Agrium stock, take the capital gain against the straight write off of fert cost.