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BA Deere
Honored Advisor

Elaine Kub explains N Prices

Basically "ask Vladimir"  (if he`s going to invade Ukraine)  The pipeline is shutdown in Europe and they have no NG to spare to make nitrogen and that effects our prices.  The good news is there should be ample supply but at these elevated prices.   Elaine sees no real hurry to book new crop corn, but keep eye on SA weather.

https://www.youtube.com/watch?v=xnjary-xHDQ  

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11 Replies
k-289
Senior Advisor

Re: Elaine Kub explains N Prices

Maybe  a  N - Plant  in  North Dakota  would  solve  their  gas  flair  issue - ?   

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rickgthf
Senior Advisor

Re: "Should be an ample supply",Does this make any sense?

"They have no NG to spare to make nitrogen and that affects our prices.  The good news is there should be ample supply but at these elevated prices. " 

  If there's an ample supply (of N fert.) that means they're making it.  They may be paying high prices for the natural gas but presumably, the producers have already hedged the price of the N fert. and will sell it at whatever the market will bear next spring.  This assumes they are, in fact, making it which should be possible to verify.

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BA Deere
Honored Advisor

Re: "Should be an ample supply",Does this make any sense?

In Europe they don`t have any NG to spare so they aren`t making N.  Over HERE there`ll be ample supply at the high price.  Watch the video with Elaine, she explains it well. 

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rickgthf
Senior Advisor

Re: "Make urea in Europe"?

First,  to my knowledge,  the Nordstream 2 pipeline never got going and Russian gas is still flowing through Ukraine.

Second, Europe doesn't make a lot of N fertilizer anyhow (see table below).

Third, it is true there is a lot of liquified NG being shipped to Europe and China but is that enough to short fertilizer production elsewhere?

urea-page-001.jpg
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BA Deere
Honored Advisor

Re: "Make urea in Europe"?

Don`t believe I heard Elaine mention Nordstream 2.    You have Urea fert production figures, but do you have ammonium nitrate figures?

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rickgthf
Senior Advisor

Re: A quick look suggests world ammonium nitrate ....

 A quick look suggests world total ammonium nitrate production in the range of 16 million tons with maybe 2/3s of it used for fertilizer. Of those 16 million metric tons (17.6 short tons) Russia makes 10 M tonnes. In contrast, the world production of urea is in the range of 64 million metric tons (70 M short tons).  Now, the N content of ammonium nitrate is 33% compared to urea's 46% so they contain roughly the same amount of nitrogen.

  To put it into perspective, if you converted the total world natural gas production to urea, it would amount to about 4 billion tons of urea, so the world production of nitrogen fertilizers is on the order of 2% of world natural gas production.

   In my opinion, this whole price thing is about Russian threats against Ukraine & Europe. You can see that Russia is a major producer of both urea (8 M metric tons) and ammonium nitrate (10 M metric tons) so any threat of actual war would affect the supply.  Now maybe Putin would actually risk shutting down both natural gas & fertilizer exports but I doubt it.

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sdholloway56
Senior Advisor

Re: A quick look suggests world ammonium nitrate ....

• Global nitrogen fertilizer production by country | Statista

It all starts as anhydrous ammonia- urea and AMNO are just more convenient for export.

China by far the biggest and they're also having NG problems. Not because Pooter is playing games with them, just the back end of a daisy chain from trying to restart electrical generation along with their economy. LNG markets are a mess, then piped gas has to be substituted to places where LNG is short, etc.

BTW, this is political. We let Germany have it their way on Nordstream 2 and Pooter is already playing games. Let the thing rust on the Baltic floor, we can supply them with LNG until they get more renewables on line over the next decade.

That's what the lobbyists wanted the previous administration to do anyway. But say sayonara to that nice $2 gas of the past.

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rickgthf
Senior Advisor

Re: The word is, Putin's withdrawn some troops.

  It's way too soon to tell if Putin's caved in to pressure or he's making just a feint before he makes his big push into Ukraine.  Time will tell. After that Russian announcement of ridiculous terms last week we couldn't know if Putin was making pretext to justify his attack or he just wanted to goad the allies into making a belligerent move.  Blinkin's response was "very diplomatic", "we're always ready to talk".

  My guess is, that by spring there will be plenty of nitrogen fertilizer coming out of Russia at reasonable prices.

  

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elcheapo
Veteran Advisor

Re: Elaine Kub explains N Prices

Hello everyone.  The thought of me being dead was premature... although there have been those praying for it.

I looked at crop budgets this afternoon...and this past week the fellow that did the farming for me brought the tickets....

Needless to say, santa was not in a good mood, the elf's have hid and ruddy and his friends have crawled into the barn and have not made a noise...

Ok...

N at 95 cents per actual pound 

P 1.11 per pound of phos...

I see even generic glyphos is $50

Or more per gallon.

We are dry...many summer crops were a loss...and no sign of moisture on the horizon.

We were lucky about the fires..

We were not hurt, but friends lost 90 percent of fence in one pasture.

Ok.... N prices.......what a crock of 

(opps I cant use that word here).

There is no shortage of NG here...

But the boards say otherwise.

This is a prime example of why we should be energy independant.

Further, we should take advantage of '"green energy"" where it will work...

An example, several years ago thru various contacts I learned of a process used in parts of europe (more nordsman country)...where they used power from wind energy to power a reaction to produce N.

I thought this wonderfull, since we have plenty of wind in area.  I thought this would have been a natural for the local coop to get into the business.  

But they were not interested, due to a multi year contract at $200/ton.

To produce N via wind was around $400 a ton, paying for power.

Someone mentioned having an N plant in the dakotas on gas 

Better yet, why not have wind powered ones in the midwest states ??

We could make america great again...but our problem...ourselves and our greed.

Merry Christmas !

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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