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Natural Gas vs. Fert prices

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    Natural Gas vs. Fert prices

    WD9,

    Have you been watching N Gas:

    "Sep 30, 2006 (Houston Chronicle - McClatchy-Tribune Business News via COMTEX) -- Falling natural gas prices, which have sunk far below a December peak of more than $15, have prompted one energy company to curtail production, but others haven't jumped on that bandwagon.

    Still, analysts say Oklahoma City-based Chesapeake Energy Corp.'s plans to cut production by 6 percent exemplifies how players in an industry lacking an OPEC-like body to control production can react to a lull in prices.

    "This tells you, 'I'm tired of selling gas for a low price when I think in two or three months I'll be able to sell it at a higher price,' " said David Pursell, an analyst with Pickering Energy Partners. "It's just a little bit of a shot across the bow to service providers to get well costs lower than they are today."

    Natural gas futures for October fell as low as $4.20 per million British thermal units in trading Wednesday on the New York Mercantile Exchange. Gas for November closed Friday at $5.62, up 22.8 cents for the day, but still a far cry from the high of $15.37 on Dec. 13.

    Analysts attribute the fall to high inventories, an absence of hurricanes to threaten supply and forecasts for a mild winter. The Energy Department said inventories are 12 percent above normal."
    http://news.tradingcharts.com/futures/8/8/83792088.html?mpop

    I hear NH3 is still falling, as is 46-0-0.

    Fall applied FS NH3 now down to $525 vs $725 this time last year in cental AB.

    46-0-0 at ?

    #2
    Our full service NH3 is at 500.

    Comment


      #3
      What do you think the price of NH3/Urea was years ago when natural gas was the same or lower in price?

      Comment


        #4
        I hate apologize for the fertilizer industry, but I imagine they are hedged at a higher gas price. If gas stays down over the winter spring prices might be less.

        Comment


          #5
          Don't need to worry about fertilizer companies being hedged. They've ****d and pilaged enough to cover a few "mistakes" even IF they did manage to get caught. Remember years ago we got a cheque to offset the cost of fertilizer and that's exactly how much per ton the price went up next spring. Or when they had thier gas supply stored at $2 then sold it in the cold of winter at $7 plus? Then turned around and skyrocketed the fert price in the spring because "cost of production" went up so much "we're barely able to survive". Boo Hoo! I'm just glad it's down. Although not much $850 N would be going on feed brly would it?

          Comment


            #6
            as farmers we pay out of our pocket when we are on the wrong side of a hedge....

            with the oligopolistic nature of the supply, the only way I see us producers getting a fair price is too share information and force the market to compete for our business....

            pre buy prices were 550 full service nh3 and 375 urea in our area, but we are north....those that did not prebuy earlier are now facing higher prices, but gas has gone down in last month....

            i can see higher transport costs driving the spread from north to south, but it still has to be reasonable.....

            current prices and general locations woould help,so please pipe up!

            Also, has anyone had any quotes on cars of offshore urea? what is your FOB price?

            i am located NW ALberta - Peace Country

            Comment


              #7
              Has anyone off set their fert purchases buy selling gas? or possibly buying puts?

              Comment


                #8
                i was quoted $510 for full service anhydrous, by full service i mean a pup and the 82-0-0 delivered to the field. this was from agricore, east of camrose. i have heard rumors of 500 but not from the seller, just farmer talk and not sure if it was a true quote or wanting it to be 500.

                Comment


                  #9
                  Our fall price is $451.00 for full service to my tank for anhydrous.

                  as of friday 13

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