MARKET TALK: Nitrogen Fertilizer Supply Could Be Catching Demand

15:35 EST - While the nitrogen fertilizer industry has been rolling in profits, thanks to increasing corn acreage and low natural gas costs, a resulting boom in nitrogen production capacity could be starting to alter the market's dynamic. A longstanding correlation between urea nitrogen fertilizer and corn prices broke down last summer as corn prices surged, says Keith Swanson, a fertilizer risk manager for CHS Hedging. "We might be at the point globally where some of this supply is catching up to demand," he tells farmers at a Chicago conference. Swanson adds there are eight large-scale nitrogen plant projects in the works in the US, but says "no one really expects all of these to be built." ([e-mail]; @enberry)

Call us at [phone] or [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires