The bullish case

[AlbertaFarmer5]

Felis Commodities
@FelisGlobal
·
58m
🇺🇦🇷🇺

📌Globally, 15% of the ammonia trade remains offline because of the Russia-Ukraine war. The winter heating season — and increased natural gas demand — could extend nitrogen’s price spike

There often seems to be a correlation between higher grain prices resulting in higher fertilizer prices. And we could argue all day long about if that is justified, or just price gouging.
But the opposite correlation, with higher fertilizer prices eventually leading to higher grain prices, cannot be denied, at least in this environment. In various parts of the world, these prices are prohibitive and fertilizer is not being applied. The supply really does not exist to cover all the acres at the rates that were being used two years ago. Musical chairs, and there aren't enough chairs. It may not be the immediate correlation we see when it's the other way around, but this one is for real.

[WiltonRanch]

Felis Commodities
@FelisGlobal
·
58m
🇺🇦🇷🇺

📌Globally, 15% of the ammonia trade remains offline because of the Russia-Ukraine war. The winter heating season — and increased natural gas demand — could extend nitrogen’s price spike

There often seems to be a correlation between higher grain prices resulting in higher fertilizer prices. And we could argue all day long about if that is justified, or just price gouging.
But the opposite correlation, with higher fertilizer prices eventually leading to higher grain prices, cannot be denied, at least in this environment. In various parts of the world, these prices are prohibitive and fertilizer is not being applied. The supply really does not exist to cover all the acres at the rates that were being used two years ago. Musical chairs, and there aren't enough chairs. It may not be the immediate correlation we see when it's the other way around, but this one is for real.

How much of the fertilizer used in places like India is subsidized by the government to secure food supply? China I think there is some sort of price controls as well but they make all their own from coal, and they have a good supply of phos. India from what I read uses lots of fertilizer as their soils are pooped from thousands of years of farming. Like you stated there will be poorer countries that will cut back or use none and they don’t have the luxury of new rich soil that produces much seeded neat.

[AlbertaFarmer5]

https://www.reuters.com/world/americas/argentina-corn-planting-stalled-great-drought-fears-rise-2022-09-15/
Driest start to planting in 30 years in Argentina. Breaking records going back to the 30s. Not quite clear how much of recent strength in prices was to do with Argentina conditions, or if that is yet to come?