GLG News by Fertilizer Purchasers

Philip CorzineGeneral ManagerSouth American Soy LLC

Growth of non-traditional participants in ag commodities poses risks

March 3, 2008

Analysis of:Commodity Prices Surge, As Investors Seek a Haven | online.wsj.com

The ag commodity markets are trading on emotion, and to some extent, fear, without and regard for supply and demand, and the continued economic viability of that demand.  The old market saying is that high prices are the best cure for high prices, but the "cure" may be a bitter pill to swallow.

Philip CorzineGeneral ManagerSouth American Soy LLC

Seed refuge is easy to solve with convential methods,

March 3, 2008

Analysis of:DuPont Introduces New Insect Protection System to U.S. Farmers | www.soyatech.com

DuPont's new "in-the-bag" refuge system will probably steal some market share from Monsanto trait seed, until Monsanto introduces the same, but likely gains will be small due to the ability of producers to satisfy the refuge requirements with simple in-the-row methods.

Philip CorzineGeneral ManagerSouth American Soy LLC

What goes up, must come down

March 3, 2008

Analysis of:Deere rep says ag industry mostly insulated from economic downturn | www.brownfieldnetwork.com

The US ag sector is showing strong signs of being overheated, and is likely to see a correction soon.  The question is, how far and fast will it fall.

Philip CorzineGeneral ManagerSouth American Soy LLC

Agricultural fertilizer will remain in a demand-driven up-swing for the short-term

December 31, 2007

Analysis of:Potash Corporation: The Best Value in Agriculture Stocks Today | seekingalpha.com

Demand from the biofuels industry, not feed-based demand, is driving the rally in the commodities markets.  Soybean prices have been high before, but high prices will eventually "fix" the supply shortage concerns.  The weak US Dollar vs. the Brazilian Real is also one reason behind the high commodity prices, but with current prices, and assuming the Brazilian Real holds near its current level, Brazil may start to "fill the gap" on world soy production in the next 12 months.  What happens in the biofuels industry here in the US is probably "the" key factor in predicting where commodity prices will be headed over the next 12-24 months.

Philip CorzineGeneral ManagerSouth American Soy LLC

Past expansions in acreage in Brazil are just the tip of the iceberg

December 31, 2007

Analysis of:Brazil's Cropland Grows by 83.5% Over 1996-2006 | soyatech.com

The expansion in planted area in Brazil over the past ten years is impressive, but the potential exists to add 300-400 million more "new" acres in that country.  The expansion has been held back by low domestic prices for soy, but that may be coming to an end.  Prices for soy in Tocantins are only five Reals per sac below what we sold for in 2003, and there is now, the opportunity to turn a profit again in this sector.  If conditions, ie: the exchange rate and soy prices on the CBOT, hold, we should expect a significant expansion in soy area in Brazil for the crop to be planted in the third quarter of 2008.

Philip CorzineGeneral ManagerSouth American Soy LLC

Monsanto continues to do the right things to extend their lead in the race for market share.

December 31, 2007

Analysis of:Seed Controversy Sprouts: Some Say USDA's Insurance Break for Monsanto Customers Unfair | soyatech.com

A couple of dollars per acre might not seem like a lot of money, but on US operations that can cover several thousand acres, it can add up to several thousand dollars per year, and all for buying a product that they have already found to be a good investment for their operations.  So although it seems small, it points out a company that is continuing to do all the right things, to command significant market share in the race to supply seed genetics to agricultural producers.

Philip CorzineGeneral ManagerSouth American Soy LLC

Ethanol producers face continued challanges on both costs and revenues.

December 10, 2007

Analysis of:Has The Ethanol Boom Ended? | www.econ.iastate.edu

Lack of infrastructure is creating price-gluts, and low or negative margins for ethanol producers.  This situation could continue for another two years, as improvements in infrastructure struggle to keep up with expansions in production of ethanol.  Corn acreage is already at its highest level since 1944, and with the current price relationships, will have a hard time gaining more acres in the US.  Regardless, expansion of ethanol capacity continues in the US, as there are more plants online, under construction, and in planning stages, than there was just 3 months ago.  Iowa continues on the part to become a "corn deficit state", and basis levels have been turned on their ear all over that state.

Philip CorzineGeneral ManagerSouth American Soy LLC

US Farm Programs Need To Focus On Stabilizing, and Stop Subsidizing

November 30, 2007

Analysis of:Editorial: Struggling farm billionaires | www.naplesnews.com

US farm programs have lost their focus, and are providing subsidies to farmers during a year of record incomes.  In addition, a continued focus by the US government on expanding biofuels will do more to stimulate agricultural production in other countries, than it will here in the US.

Philip CorzineGeneral ManagerSouth American Soy LLC

Higher Farmland Prices Help Balance Sheets, Loans and Estates, but Hurts Profits

November 26, 2007

Analysis of:U.S. Cropland Prices Shackle Some Farmers | soyatech.com

The biofuels boom is driving up prices for farmland across the US.  Typical prices for top farmland selling with no development potential, are now around $6,000 per acre or more in Central IL.  The higher prices are good for current owners, but bad for anyone renting land, which covers the vast majority of agricultural producers, at least in IL, where over 70% of land is owned by someone other than the operator.  Cash rents for farmland have nearly doubled during this escalation in prices, cutting out a large chunk of the expanded profits, and passing it into the hands of the farmland owners.  These higher prices and rents are creating a great deal of additional risk, as high commodity prices and average and above yields are being factored into budgets to allow them to cover the cost of higher rents.

Philip CorzineGeneral ManagerSouth American Soy LLC

New biofuel feedstocks will be driven by effeciency and economics.

November 26, 2007

Analysis of:Seeding the way to better biofuels | seattletimes.nwsource.com

The adoption of new crops for biofeedstocks will be driven by how efficient the crops are (gallons per acre), and in how they fare economically (net returns per acre).  Crops like camelina may be able to gain a foothold in regions where corn and soy are less viable, like the US west and northwest.  Crops like Jatropha may gain a foothold in some regions of the world, likely in lower cost labor regions (at least initially), due to the high labor requirements.  Jatropha, however, needs to develop better genetics, and a mechanized planting and harvest systems for it to be a significant source of biofuel.  The perfection of cellulosic biofuels, however, will likely make all of these crops unneeded for fuel production, due to its higher efficiency, so all these crops probably have a limited window of opportunity to feed biofuels production.

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