Bull Market?

Last week, the FAO reported an increase in food prices for the eighth consecutive month.   Certainly current fundamentals suggest longer term prosperity in agriculture, as commodity crop prices remain strong in almost all cases.  As a result, farm incomes are healthy and crop production input providers are profitable.  The fertilizer supply chain is especially bullish.  At the recent winter TFI meeting in Phoenix, it was all smiles and high fives. 

Fertilizer prices have responded to this optimism.  The one exception is urea which has been relatively sluggish as the latest Granular Urea Basket Price indicates.  Our friends at Profercy analyze this situation insightfully in their 1 March Urea Forecast.   Our view is that if you are a buyer, urea is currently a competitive source of nitrogen.  On the other hand, speculators trying to run with the bulls in other nitrogen products could face painful consequences.