In the October 2012 World Agriculture Supply and Demand Estimates report, the U.S. Department of Agriculture published its U.S. corn yield estimate for 2012 of 122 bushels per acre which, along with other changes made to the department’s inventory and demand estimates, resulted in a projected stocks-to-use ratio of 5.6 percent for the end of the 2012/2013 corn crop marketing year, which would be the lowest level in 17 years. As a result, CF Industries expects U.S. farmers to plant approximately 97 million acres of corn in 2013.
The global ammonia market continues to be very tight, given supply reductions from Trinidad and Russian ammonia producers, along with robust demand from North American dealers and distributors building inventory in anticipation of a high volume of fall and spring ammonia application by farmers.
High acreage expectations, especially for corn, should support strong urea and UAN demand. The urea market is expected to benefit in the near term from the closing of the low-tariff Chinese export season, gas constraints impacting a number of off-shore producers and continued robust global demand. At the end of the third quarter, the company had very low UAN inventory, with most of it committed and in the process of being delivered to customers as part of the company’s forward sales program.
With high planted acres in the United States, domestic demand for phosphate fertilizers is expected to be robust in 2013, following the normally slow winter months at the end of 2012.“An exceptionally early harvest, recent rains across key growing regions, and the anticipation of a large corn planting in 2013 should support strong nitrogen sales volumes as we move into next year,” said Wilson. “Our expectations for continued strength in agricultural fundamentals underpin our commitment to spend $3.8 billion on brownfield nitrogen projects, as we announced last week.”