Lower Ferilizer Prices?

[wheatking16]

Lower than when? We locked in a blend back in October for $929 and now that would go for $1114.

Probably lower than the early December price though. Those prices where nearing the $1300 mark if I remember.

Lower than today.

[SASKFARMER]

Yep read that and mayo quit and it was all a game.

[LWeber]

no disrespect - I appreciate what you're doing and perhaps you can educate me as well...

Yesterday the UREA Market fell $25.50 as per your charts and it didn't even trade...

Some of the open interest variables in the charts you posted are questionable. A weakening signal was on MAP CFR Brazil based on zero trades yesterday but above all - and most importantly - there is zero open interest...none - f/a

The open interest on most fertilizer futures is dismal. I wrote a paper for a company on utilizing fertilizer futures for risk management in 2015. This company had the capacity to own the majority of the open interest based on a sound hedging program. I advised against using it - and they did not. Ask the CWB how that worked in Minneapolis with DNS and trying to lift their hedges. Better yet, ask a farmer..

Swaps I can see as a price discovery mechanism; making assumptions on any futures contract with little to no open interest - it is a hallelujah day when it trades - does what for chart based signals?

Urea dropped 3.28% yesterday and it didn't trade - volume was zero... Volume for the entire 6 futures contracts was 15 contracts or 1500 MT. I have farmers that buy 5 to 10 times that much for their farm.

Not looking to start a fight - just trying to understand how a sell signal should be adhered to in a contract that doesn't trade... or is not reflective of the underlying cash market.

[Maver]

It probably will drop, I bought mine yesterday. My supplier is confident the next price they are given will be higher. Who knows?

[wheatking16]

no disrespect - I appreciate what you're doing and perhaps you can educate me as well...

Yesterday the UREA Market fell $25.50 as per your charts and it didn't even trade...

Some of the open interest variables in the charts you posted are questionable. A weakening signal was on MAP CFR Brazil based on zero trades yesterday but above all - and most importantly - there is zero open interest...none - f/a

The open interest on most fertilizer futures is dismal. I wrote a paper for a company on utilizing fertilizer futures for risk management in 2015. This company had the capacity to own the majority of the open interest based on a sound hedging program. I advised against using it - and they did not. Ask the CWB how that worked in Minneapolis with DNS and trying to lift their hedges. Better yet, ask a farmer..

Swaps I can see as a price discovery mechanism; making assumptions on any futures contract with little to no open interest - it is a hallelujah day when it trades - does what for chart based signals?

Urea dropped 3.28% yesterday and it didn't trade - volume was zero... Volume for the entire 6 futures contracts was 15 contracts or 1500 MT. I have farmers that buy 5 to 10 times that much for their farm.

Not looking to start a fight - just trying to understand how a sell signal should be adhered to in a contract that doesn't trade... or is not reflective of the underlying cash market.

[ATTACH]9546[/ATTACH]

Good point,

I don't focus much on volume as my main concern is price.


I also don't have an answer why the price dropped with no volume.

Perhaps a data error.

I will do some digging.

Interestingly, that concern was not addressed in conversation about the report with a veteran fertilizer analyst.

Regarding the sell signal, I don't trust any price beneath a flat to declining 50 DMA.

Hence the sell signal.

That said, if I was a purchaser of urea, I would not be in a rush to buy beneath a flat to declining 50 DMA.


Good point though, Larry, I don't have an answer this evening.

Maybe tomorrow.

[Hamloc]

I talked to my local Richardson rep today, in December spring Urea price was $1350 a tonne, today spring Urea price was $1325 a tonne. It has improved a bit.

[farming101]

From the CME:

All market data contained within the CME Group website should be considered as a reference only and should not be used as validation against, nor as a complement to, real-time market data feeds. Settlement prices on instruments without open interest or volume are provided for web users only and are not published on Market Data Platform (MDP). These prices are not based on market activity.

[LWeber]

From the CME:

All market data contained within the CME Group website should be considered as a reference only and should not be used as validation against, nor as a complement to, real-time market data feeds. Settlement prices on instruments without open interest or volume are provided for web users only and are not published on Market Data Platform (MDP). These prices are not based on market activity.

I have a live data feed with ProphetX

Those settlement prices are lifted into chart feeds ...they are not based on market activity because there was none.

[helmsdale]

With my narrow look into the market, I'd still feel confident in thinking that, all else being equal, there is no way we settle prior to spring at prices approaching long term average.

There is likely enough pent up demand, waiting for a decline, and certainly there isnt alot of excess capacity to fill that demand with numerous plants being shut in due to high nat gas prices, that any price declines will be met with increased demand.

Even if nat gas pulls back, barring economic collapse, it's likely that demand will outstrip supply thereby leaving us farmers in the passenger seat at least for this year.

[wheatking16]

What is happening with retail fertilizer prices?

Are they holding firm or lowering?

[farming101]

Haven't asked the locals. Last of our fert for '22 on farm now.

DTN survey says US prices trending higher

https://www.dtnpf.com/agriculture/web/ag/crops/article/2022/01/12/retail-fertilizer-prices-continue

[WiltonRanch]

Fertilizer won’t come down in time to benefit the 22’ crop. Ones who had good crops last year will be in a crunch having to apply regular fertility rates and see crop prices decline come fall and into the winter. Ones who had poor crops granted will have lower fertility needs but less crop to sell to cover increased input costs even at reduced rates. Costs the same to farm in both cases aside from fertility cost. At this point I’m not worried about fertilizer price but availability in the spring. If there has been as little fertilizer bought and brought home by now. What will the rush look like in the spring? Can imagine price will be even worse.