Corn price drop will not hurt fertilizers - CF

29 July 2008 17:20  [Source: ICIS news]

HOUSTON (ICIS news)--Falling corn prices are not likely to make a dent on fertilizer demand, the chief executive of CF Industries said on Tuesday.

Stephen Wilson, whose Deerfield, Illinois-based company on Monday posted record profits in the wake of high fertilizer prices, said demand for agricultural products would remain firm despite corn’s recent price retreat.

Corn prices were trading above $7/bushel this summer but have since fallen below $6/bushel. Futures for September delivery were trading at $5.72/bushel on Tuesday morning on the Chicago Board of Trade.

 “I think we really need to keep in mind the farmer really hasn’t realised those $7+[/bushel] corn prices in their own sale of corn; they’re selling at the farm level. I think a $6-plus level at the farm level is something the farmer would welcome,” Wilson said.

Wilson said ethanol plants that were forced to cease operations because corn prices were too high will now come back online, increasing demand.

“Some of the ethanol facilities that couldn’t make money at higher prices could make money at this price,” Wilson said.

($1 = €0.63)

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By: David Rosen
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