Grain prices could fall as phosphate demand increases

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Production levels for key grain crops, including corn and soybeans, are projected to increase in both the United States and Canada, which is expected to put pressure on these prices for the 2013 growing season.

Joseph Glauber, chief economist at the U.S. Department of Agriculture (USDA) told PotashInvestingNews.com at the USDA’s 89th annual Agricultural Outlook Forum that prices of corn, soybeans and wheat should fall in 2013 as production increases in response to current high crop prices.

“We should see record production of corn and soyabeans. That should lower prices,” Glauber was reported as saying.

Although optimism for the 2013 season is running high, Glauber cautioned that farmers were in a similar situation in 2012 before the drought and heat destroyed a record number of corn and soybean crops.

With strong demand for increasing production in corn, soybeans and wheat, fertilizer manufacturers have responded with their own optimism for strong demand for crop nutrients.

To produce the amount of grain crops farmers want, they will need the crop nutrients to bump yields, fertilizer manufacturers say.

PotashInvestingNews.com reports that CF Industries expects that “demand [for fertilizers] should materialize later in the first quarter,” and that “[f]ertilizer markets during the fourth quarter [of 2012] were characterized by strong North American demand for ammonia and phosphates.”

As phosphate applications typically occur within the first stage of plant growth, there is a good chance that the prospect of strong crop production numbers will help phosphate producers’ sales this spring, PotashInvestingNews.com reported.


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