Josh Linville
speaker
128 appearances
2 recordings
2 series
first heard Sep 2024
last heard 23 Mar
Josh Linville’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 1 in all, peaking in Mar 2026 with 1.
Appearances
But the data is showing the operating rate is really, really good, and the exports are really, really bad. Now, I found some articles where they talked about how their government officials have actually been pushing to very quickly build storage for a lot of these different rare products. elements and stuff like that, they're stockpiling a lot of stuff. Maybe they're doing the same thing on Yuri.
I mean, my gosh, they built the hospital in like 10 days when they needed it. It's not outside the realm of possibility to think that they could just be building flat storage with a roof on it just left and right. We need to hire those guys for the school. For the school.
Supply side, things seem to be okay. And that is not to sit there and say there are not production issues. The Chinese exports is certainly a situation where we look at urea. The EU is a marketplace that we haven't typically talked about in the past because they just produced what they needed and nothing really went in or out or anything. They were just as they were.
The same thing, we go back and we talk about Russia and Ukraine. You remember the Nord Stream Pipeline? Somebody blew that up. They stopped shipping product through the... Well, their natural gas price started to rise. Their nitrogen production right now is about 75% of normal. And this is especially bad on UAN. The EU region, about 30% of all the UAN produced in the world.
So that's a little bit of a step back. You talk about some of these production issues we've seen in Trinidad and Egypt because of a lack of gas supply. Russia not exporting anhydrous. That's your biggest exporter right there just disappearing from the marketplace. So there are these hiccups.
There's enough things that if we saw corn back to last year's type values, I think every single nitrogen price across the board is higher. The problem is the buyer is sitting there saying, I don't care what the outlook is. 24 stinks. 25 stinks. I don't have money to spend anyway. If I did, I wouldn't give it to you to save my life. I'm not doing a thing. The farmer says that.
The retailer is sitting there saying, I'm in a bad spot. I'm scared to death of this just like everybody else is. I'm not going to take the positions. The supplier is saying, I'm not going to take those positions. It's a standoff. And so we're seeing prices relatively flat. A little bit of a slide on a couple of the products. Anhydrous is moving up a little bit on the resupply. UAN is steady.
Urea is down a little bit. but the market has just grind grinded to a halt because nobody wants to take the next step. They can't last forever. They can last for a while. It's only August 23rd. Do you buy yours yet?
That's a lot of it. I would say, so again, one of the big things we talk about, if you've seen Twitter, the reports, things like that, I always talk about the ratio, right? And for anybody that might not know, that whole concept comes from when I kind of break down what farming is from my perspective, just looking at marketing. So this is a very, very, very simplistic point of view.
It's a lot like manufacturing. And you go to a manufacturer and you say, well, how do you do your stuff? How do you do your inputs and outputs? Well, they're not trying to call the low the inputs. They're not trying to call the high the outputs. They're just sitting there saying when that value between the two of them gets to a good level, I lock them in.
And it doesn't matter where they're at, right? It doesn't matter if your input is insanely high priced or the other side is insanely low. Now, we'd love to hit both of these two, but they're trying to look for that value. And so that's how we track it. We just basically sit there and say, I'm looking at like December Chicago corn.
And I'm looking at New Orleans, Louisiana fertilizer because that's the most liquid point that we have in the North America marketplace. So I look at it from, well, how many bushels of corn does it take to pay for a ton of urea, UAN, anhydrous phosphate potash?
Because I've yet to walk into a room and say, okay, well, you guys, if you had the chance, would you rather spend 50 bushels of corn to buy a ton of urea or 100 bushels of corn to pay for a ton of urea?
Does it matter what the price is?
So that's why we look at it that way. If that value gets low, it's a good value. If it gets high, it stinks. And when you look at urea, UAN, it's middle of the ground. It's not terribly high. It's not terribly low versus historical values. Anhydrous is starting to bump up there on the higher side.
We weren't too concerned about fall anhydrous demand, but it's starting to kind of creep in a little bit.
If we have, we've never been set up emotionally like we are. And what I mean by that is we've seen big spikes, right? I mean, you guys were here for 2008 and you saw grain spike up and fertilizer price spike up. And what happened immediately after? It all came crashing back down. We saw the same thing back in what was 11, 12, I think it was. Same thing, prices up and they're immediately back down.
Well, those are demand-driven rallies. Those were both ethanol-based. They boosted corn pricing. And so everything chased after that price on the way up. And then the second all that demand started to fall out and there wasn't anything left, it's flat. It all fell back down to the ground. Guys, this thing has been going on since late 2020, early 21.
We have never seen a high-priced market like we have for this kind of length of time. And it's not just fertilizer. It's grains. It's everything across the board. It was kind of easy, kind of exciting. Things were always happening. Every time you picked up the phone, there was some crazy black swan event. And it always seemed to help out our situation. Now we're in the great reset.
And great resets never happen because your input prices fall. It's always the other way around. It's always the grain prices go down. Then all the other inputs are like, boy, that stinks. I ain't going to drop my price.
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