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Terra Nitrogen Company, L.P. Message Board

  • reaflare reaflare Dec 28, 2011 3:59 PM Flag


    BOARD- Corn is not crashing, and even if Euro in recession and China slows down and if USA produce bumper crop, I don't see see Corn going below $4-4.50, even though CEO of POT stated only 3 yrs ago corn at $4.00 was Nirvanna. Nat Gas pricing is also not anticipated to rise meaningfully. What is crashing is Ammonia and Urea and UAN prices--the things TNH sells. The Urea basket was $535 Sept 23, today it is $357. Ammonia was in the $600's and now in the $400's. UAN pricing is down over 35% in last 60 days-talk to any fert dealer to confirm or go Farm Futures to confirm. Supply is increasing at existing plants through-out USA and Trinada and Venez and anywhere their is Nat Gas supply
    --the number of acreage expected to be planted this spring is only a tad above the spring of 2010--that was when the UREA basket price was $240 and TNH margins substantially lower. Tnh will do just fine in 2012, it will probably distribute $7-9, but at that level TNH LP Units will revert to more normal double digit price, still a ton better than the value of the plant in early 2007 when TNH LP units sold for $30 something. Good Luck on your timing--I was long TNH and now out, and have no real ax to grind--just giving opinion that it nearly impossible for any single asset plant to produce a pure commodity like Ammonia at 65% margins for very long--no industry can do that. Good news is that corn farmers and wheat farmers and USA consumer will benefit, cereal pricing at store will benefit, as will chicken,hog and beef produces--so look at Nitrogen crashing as a good thing for America.

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