Natural Gas and fert prices

[4GFarms]

Looks like a head and shoulder pattern on the natural gas chart. Markets mostly green and yet natural gas is down. Could go to 3.40ish range if the chart pattern is correct. Lower fert prices mid winter or does demand still drive this market. Errol? Macdon? Farming101? Really interested in this market as urea is the only input we don’t have priced yet? Have been following the natural gas market for the last month wondering if the head and shoulder pattern was developing.

[AlbertaFarmer5]

Looks like a head and shoulder pattern on the natural gas chart. Markets mostly green and yet natural gas is down. Could go to 3.40ish range if the chart pattern is correct. Lower fert prices mid winter or does demand still drive this market. Errol? Macdon? Farming101? Really interested in this market as urea is the only input we don’t have priced yet? Have been following the natural gas market for the last month wondering if the head and shoulder pattern was developing.

IMHO, the price of Nitrogen fertilizer won't drop nearly as fast or far as NG. There is a genuine shortage due to so many of the plants in other parts of the world shutting down for extented periods. Even if all supply issues are resolved, and price moderates, there likely isn't enough time between now and northen hemisphere seeding to make up the shortfall. So farmers around the world will be competing for the same limited supply, and supply will go where the price is best. Optimistically, I think the panic and daily increases might have subsided.

[4GFarms]

Thanks for your view AF5. I have a tendency to agree with you but one can only hope! Just struggling to pay $1000+ per tonne when we bought sub$500 last year. All be it the grain prices have doubled so I guess I have to pay the piper

[farming101]

I agree with AF5. Timing is not good. NG stocks draws in NA usually start in Nov and in the majority of years support prices till the worst of winter is over.
A 15 billion bushel corn crop and $5+ US cash prices is not going to slow down N use in the States.
I could be wrong....

[foragefarmer]

Thanks for your view AF5. I have a tendency to agree with you but one can only hope! Just struggling to pay $1000+ per tonne when we bought sub$500 last year. All be it the grain prices have doubled so I guess I have to pay the piper

There has been a lot of panic buying recently of fertilizer. I don't know if I would buy my entire supply right now as you pointed out in you first post early winter there could possibly be a decline.

Maybe only buy half the N you need now and be prepared to pick some up in the dead of winter. Retailers may have more supply at this time because most farmers don't want to fire up equipment.

I was fortunate to have bought all I needed in August and have been spreading 80% this fall the rest is on farm storage till spring . My retailer gave me very good information at the time.

Only a suggestion, good luck to you!

[jazz]

Thanks for your view AF5. I have a tendency to agree with you but one can only hope! Just struggling to pay $1000+ per tonne when we bought sub$500 last year. All be it the grain prices have doubled so I guess I have to pay the piper

Biden just announced he wants to put 500,000 EV charging station in the US. I dont think NG is going to be going down much at all. In fact, I see a parobolic rise happening in it soon.

Maybe the best investment is a zipperlock filled with 10 years of urea.

[4GFarms]

Good info but what I gather is the price will only stay the same or rise till spring. Maybe look for a stored till spring price in the next while if available. Would like to see your reasoning for the increase in natural gas charts or why it is not a head and shoulders pattern on the chart Jazz? Just looks like one to me but open for discussion.

Farming101, not sure the US guys will want to pay the extra for N just like me/us up in Canada. I see the crib price only being supported as less fert use means less bushels which would support prices to rise. Just have to find the right balance for the upcoming year. Don’t want to chince out on fert but don’t want to go broke applying it also.

Anybody have a crystal ball on moisture we will get in 2022??

[jazz]

Just looks like one to me but open for discussion.

Charts are short term 4G. There may well be a decrease in NG this winter and maybe a drop in fertilizer as well, but the longer term trend is bullish. ESG forces, malinvestment, the only clean transition fuel that has a chance and 2B more people set to arrive on this earth with needed access to energy. NG/LNG will be skyrocketing in the medium term.

Wait until our radical new env minister starts targeting oil and Nitrogen. The ESG crowd might kick off a famine.

[farming101]

Going into winter with no moisture here.
So, for fert am laying in enough to increase wheat yields 50% over this year, which won't take much
And for canola 75% higher yields which would still be dismal and won't take much fert.

[AlbertaFarmer5]

As I stated in a previous thread, my neighbor recently retired from analyzing natural gas for one of the biggest processors. And he is quite sure that Western Canadian prices will be significantly cheaper by spring. Simply due to the fact that our export channels are already saturated any more production won't be able to get out of the country, and high oil prices are only bringing more gas online with nowhere to go. Basically, we won't be able to take advantage of higher world prices for natural gas for a very long before supply overwhelms demand. He expects that to translate to cheaper fertilizer prices locally as well. But he and I disagree on that last part of the analysis for the reasons listed above.

[farming101]

As of July 21 Canada NG stocks build and stocks on hand were lagging 2020 by a good 10%

[AlbertaFarmer5]

As of July 21 Canada NG stocks build and stocks on hand were lagging 2020 by a good 10%

That number Definitely does not look bearish. But 2020 was also coming off of the record glut earlier in the year.
But July 21st is ancient history in this era. Doesn't take very long to complete new wells with modern drilling technology. Anyone I know in the drilling business has been flat out for months now.