Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Macquarie Ag
Conference
Global commentary on commodities and fertilizers
from the inaugural conference
Macquarie hosted its inaugural Agriculture Conference in London on Wednesday
15 June 2011. We highlight some of the key themes on Ag commodities and
fertilizers.
Corn stocks remain tight
Macquarie is very bullish on corn given the tight supplies (15-year low in stocksto-
use in US, and a record low globally) against strong demand stemming from
ethanol and feed use. Indeed there is potential for physical corn shortages in the
US in coming months. Macquarie believes it will take at least two high-yield
seasons to rebuild supplies. The USDA Crop Report on Thursday 30 June will
likely confirm these very tight supplies of corn. The outlook for Wheat is less
bullish, but prices are being pulled up by corn. The consensus of speakers agreed
with Macquarie’s view on commodities.
Bullish outlook for fertilizers
Overall agriculture markets support a positive backdrop for fertilizer prices and
volumes. Record cash margins are expected for US farms. Higher-than-average
fertilizer prices are also supported by reinvestment economics. With demand
strong and delays in global expansions Urea prices hit US$500/t. In addition,
expectations of weaker Chinese exports coupled with a tight US supply are
boosting Urea prices.
In Phosphate, the impact from Ma’aden could be overstated
On DAP, some price weakness is expected as Ma’aden comes on-line. This
depends, however, on the rate of operational ramp-up, with recognition that global
DAP demand should remain strong and the supply additions from Ma’aden are
likely to be gradual. DAP processing plants take time to ramp, and a producer’s
ability to achieve consistency of rock feedstock is a key issue – there is a learning
curve. There are also potential DAP capacity closures in US due to high costs.
Yield is king
The final roundtable included farm operators large and small from several
countries. The consensus view was that yield is king. Farmers are willing to pay
these production input prices with commodity prices up at these levels. Farmers
will chase profit with the view that if they are able to sell the product in a timely
and profitable fashion, the additional yield delivered from optimizing inputs such
as fertilizers and crop protection is well worth it.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Macquarie Ag
Conference
Global commentary on commodities and fertilizers
from the inaugural conference
Macquarie hosted its inaugural Agriculture Conference in London on Wednesday
15 June 2011. We highlight some of the key themes on Ag commodities and
fertilizers.
Corn stocks remain tight
Macquarie is very bullish on corn given the tight supplies (15-year low in stocksto-
use in US, and a record low globally) against strong demand stemming from
ethanol and feed use. Indeed there is potential for physical corn shortages in the
US in coming months. Macquarie believes it will take at least two high-yield
seasons to rebuild supplies. The USDA Crop Report on Thursday 30 June will
likely confirm these very tight supplies of corn. The outlook for Wheat is less
bullish, but prices are being pulled up by corn. The consensus of speakers agreed
with Macquarie’s view on commodities.
Bullish outlook for fertilizers
Overall agriculture markets support a positive backdrop for fertilizer prices and
volumes. Record cash margins are expected for US farms. Higher-than-average
fertilizer prices are also supported by reinvestment economics. With demand
strong and delays in global expansions Urea prices hit US$500/t. In addition,
expectations of weaker Chinese exports coupled with a tight US supply are
boosting Urea prices.
In Phosphate, the impact from Ma’aden could be overstated
On DAP, some price weakness is expected as Ma’aden comes on-line. This
depends, however, on the rate of operational ramp-up, with recognition that global
DAP demand should remain strong and the supply additions from Ma’aden are
likely to be gradual. DAP processing plants take time to ramp, and a producer’s
ability to achieve consistency of rock feedstock is a key issue – there is a learning
curve. There are also potential DAP capacity closures in US due to high costs.
Yield is king
The final roundtable included farm operators large and small from several
countries. The consensus view was that yield is king. Farmers are willing to pay
these production input prices with commodity prices up at these levels. Farmers
will chase profit with the view that if they are able to sell the product in a timely
and profitable fashion, the additional yield delivered from optimizing inputs such
as fertilizers and crop protection is well worth it.
No comments:
Post a Comment