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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (70560)	6/26/2022 3:38:54 PM
From: Elroy	Respond to of 78954

Yes! and where does most/all of the feed stock come from? Feed stock?!?!! Please, speak the plain English! Do you mean the ingredients used to make fertilizer? For the fertilizers made by UAN the main ingredient is natural gas. UAN has a plant that uses something called "pet coke" to make fertilizer. Pet come is some type of output produced in refining oil. UAN's fertilizer plant which uses pet coke as an input is the only comparable US plant that uses pet coke, the rest use natural gas. So the main ingredient in the fertilizers that UAN makes is natural gas. Can you guess why the feed stock and fuel prices increased so much vs 2 years ago? I think your point is the Russian invasion of Ukraine is causing natural gas prices to go up quite a lot. Yup, agreed. Will these higher prices normalize any time soon? I think your point is that the future price of natural gas seems likely to be higher that it was in the past decade. Yup, agreed. FWIW, I am hearing the US farmland crops need rain (especially wheat). Corn production (uses all that fertilizer) may not achieve break even due to the price of fuel and even soybeans cost are at the high end (again fuel). Higher food prices, result in higher inflation Maybe Brazil & South America will do better. Brazil is a huge corn producer. They have political issues to deal w/ too. We don't need to speculate, we have the "price of corn" as a transparent data item. It will tell us the consensus view of how corn supply and demand is going. markets.businessinsider.com Look at the ten year chart. The price of corn is way up there. My understanding is despite high input costs US corn farmers are likely to have a hugely profitable year, due to the high sales price of corn. I have no super knowledge on this question of farmer's corn profits when both fertilizer and corn are more expensive than previous years, but it makes sense to me that the farmers will benefit more from the high price of corn than be penalized from the high price of fertilizer. Regardless, I expect UAN to sell as much of their fertilizer as possible as they sell most production in advance, so it's take or pay for the customer. The customer will take. In other words, the market will price fertilizer at a reasonable level that does not destroy demand, but maximizes profit to the stronger party, which currently seems to be the fertilizer makers (relative to the famers). Corn price is high, and fertilizer supply is low, so it's a good time to be a fertilizer maker.

To: E_K_S who wrote (70560)	6/27/2022 9:08:42 AM
From: robert b furman	3 Recommendations Recommended By E_K_S pak73 rogermci® Read Replies (1) \| Respond to of 78954

Good morning E_K_S, During this last week I drove from Wisconsin to Kansas and back. Kansas is just beginning its wheat harvest. The custom combines are lining up on the interstate parking lots. No word on yield, but the fields do look good. Corn in Iowa looks fantastic - dark beautiful green (so it got lots of nitrogen applied. The corn in Kansas and southern Iowa is waist high compared to ankle high in Wisconsin. Corn crop REALLY LOOKED GREAT! I suspect that the price will be higher and input costs (which have soared) will be recovered. If the American crop is solid and price is high, our export abilities will soar and the trade deficit will be greatly reduced. Bob