You might not see it on the ground just yet, but world nitrogen fertilizer prices are rising.
With wheat prices jumping 45 percent over the past two months mostly because of the drought in Black Sea exporting countries, it shouldn’t be a surprise that fertilizer makers would start to ratchet up prices.
The price of nitrogen during the year is often the weakest during late summer and early fall and then rallies into winter, but this year it might start its autumn rally early.
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Granular urea at the U.S. Gulf of Mexico in early June in the lull after Northern Hemisphere seeding was selling at about $225 US per short ton.
It rallied for several weeks and looked like it might run out of steam in late July, but by the second week of August it caught fire again and topped $300.
The Profercy Report, a fertilizer newsletter, said Aug. 13 that prices look set to test the 2010 high set in January of $325.
That is still a far cry from their peak of more than $700 in the commodity frenzy of 2008.
However, there is a strong chance prices will climb higher than they did in the autumn and winter of 2009- 10.
Profercy said that stocks are not high in most major markets, demand is expected to recover thanks to higher grain prices, and no new production is due to come on stream.
