Home Commodities Nutrien Says Strong Crop Prices Expected to Increase Production — Commodity Comment

Nutrien Says Strong Crop Prices Expected to Increase Production — Commodity Comment


By Stephen Nakrosis

Agricultural products and fertilizer company Nutrien Ltd. said prices for crops such as corn, soybeans and wheat are above the 10-year average, which will provide “strong incentive for growers to increase production.”

Crop Prices

“Global grain and oilseed stocks-to-use ratios remain well below historical average levels, which we believe will continue to be supportive for crop prices,” the company said.

“Nutrien delivered record earnings in the first half of 2022,” said Ken Seitz, the company’s interim president and chief executive. He also said “we expect supply challenges across global energy, agriculture and fertilizer markets to persist well beyond 2022.”

North America

In the U.S., crop conditions started the 2022 growing season favorably, according to the company. But “recent hot and dry weather has accelerated crop development and could limit yield potential,” it said.

In Western Canada, Nutrien said growing conditions are improved from the severe 2021 drought. “We expect the combination of robust grower economics and favorable growing conditions to support demand for crop nutritional products, fungicides and insecticides in the third quarter of 2022,” the company said.

Nutrien also said it lowered its potash and nitrogen sales volume guidance to “reflect the impact of lower application in North America this spring.”


Nutrien said prospective Brazilian grower margins remain historically high, adding analysts expect an increase in soybean planted area in the 2022 planting season. “While we expect this to support overall crop input demand, fertilizer inventories have been slow to move from port to inland positions and we expect import demand will resurface as these inventories move inland for Brazil’s spring planting season in the second half of 2022,” the company said.

Crop Nutrient Markets

Restricted supplies of potash from Russia and Belarus kept prices at historically high levels in the first half of this year, Nutrien said. The company also said it “narrowed [its] global potash shipment forecast to between 61 [million] and 64 million tons in 2022, and continue to expect demand to be constrained by restrictions on exports from Russia and Belarus.”

China is continuing to impose export restrictions on urea and phosphate fertilizers, Nutrien said.

Increases in European natural gas prices has again led to reduced nitrogen operating rates in the region, according to Nutrien. “Tightening European ammonia supplies and significantly reduced Russian ammonia exports from the Black Sea are pressuring global ammonia availability,” the company said.

Nutrien also said it expects strong seasonal nitrogen demand in the second half of this year.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

Source link

Previous articleDallas’ American Heart Association-Backed Fund Raises Nearly $42M to Invest in Health Tech ยป Dallas Innovates
Next articleHorizon Technology Finance (HRZN) Q2 2022 Earnings Call Transcript


Please enter your comment!
Please enter your name here