GLG News by Fertilizer Purchasers

Philip CorzineGeneral ManagerSouth American Soy LLC

Good times aren't over yet for Deere

November 26, 2007

Analysis of:Deere Fourth-Quarter Net Rises 52% on Overseas Demand | www.bloomberg.com

The secondary effects of the world-wide ethanol boom are starting to show up in increases in prices, and in earnings, of which Deere is an excellent example.  Expansion of sugarcane in Brazil is driving sales of Deere machines there, but the effects of the big US corn crop and record high commodity prices are yet to be fully appreciated in the US ag sector.  If combine sales are an indication, next quarter should be another very good one for Deere.

Philip CorzineGeneral ManagerSouth American Soy LLC

Negative Image + Falling Returns = Problems For Biofuels

October 31, 2007

Analysis of:Global Backlash on Biofuels Could Overshadow Future Potential, Says Worldwatch Institute | soyatech.com

The biofuels sector continues to be the focus of negative stories in the US and Global press, highlighting many of the downsides of the push towards ethanol and biodiesel.  These stories, by themselves, might not create significant problems for the industry, but in combination with the twin economic challenges of high costs and low returns currently facing the new bio-projects, the added weight of increasingly concerned consumers could drag down the already slowing sector, even more.  

Philip CorzineGeneral ManagerSouth American Soy LLC

Find a way to spend more, rather than complaining about higher prices for commodities.

October 7, 2007

Analysis of:As Prices Soar, U.S. Food Aid Buys Less | www.nytimes.com

Ethanol and corn has been booming not because the US government called for it, but rather because there were opportunities for profits, largely due to oil prices. Subsidies for biofuels in the US should have a hard end-date. Dollars spent on food aid should increase, rather than expecting world commodity prices to decrease.

Philip CorzineGeneral ManagerSouth American Soy LLC

GMO's riding the biofuel train too.

October 7, 2007

Analysis of:Government allows import of GM seed edible oil | www.business-standard.com

GMO products will likely ride the biofuel train into other formerly closed markets, as global supplies of corn and beans shrink due to biofuel consumption, and non-GMO alternatives disappear.

Philip CorzineGeneral ManagerSouth American Soy LLC

Slowdowns and consolidations ahead for ethanol, but pain today will create more profits tomorrow.

October 4, 2007

Analysis of:Ethanol Boom Is Running Out of Gas | online.wsj.com

Ethanol is headed for a slowdown and consolidations, but will emerge stronger and more efficient. Cash corn near $3.05 and ethanol near $1.58 per gallon leaves a profit margin of only a few cents per bushel. Corn prices will fall as ethanol plants slow consumption, but weather and currency issues for farmers in other countries has complicated the price picture.

Philip CorzineGeneral ManagerSouth American Soy LLC

Economics working against soy-based biodiesel

September 27, 2007

Analysis of:Biodiesel boom heads to Wall Street | money.cnn.com

With current prices for soybeans, biodiesel's primary feedstock, its economic viability is questionable. With soybean oil selling for near $0.40 per pound, costs to produce soy-based biodiesel are running $3.20-$3.30 per gallon, at or slightly above current prices for diesel of $3.00-$3.10. The Federal Subsidy for biodiesel blenders of up to $1.00 per gallon appears to be the only thing keeping soy-biodiesel viable, at diesel prices that are almost 50% above those of one year ago.

Philip CorzineGeneral ManagerSouth American Soy LLC

Brazil's Addition Of Ethanol Subsidies To Their WTO Appeal Raises The Stakes For US Agriculture

September 19, 2007

Analysis of:Brazil Wants Probe of U.S. Farm Aid | www.forbes.com

Brazil’s complaint, originally filed in July, now includes a challenge on the payments for “energy subsidies”—ie: ethanol’s $0.51 per gallon subsidy, and the biodiesel blending credit. The US says it considers those “industrial” subsidies, and not a part of this WTO discussion Brazil has already won a WTO case against US Cotton Programs, in 2004 A potential, still unreleased WTO Compliance Panel report is said to show that the US is still in violation of the 2004 Cotton ruling

Philip CorzineGeneral ManagerSouth American Soy LLC

ADM, Bunge and others, will face many challanges in the Brazilian sugar sector.

September 14, 2007

Analysis of:Ethanol Giants Struggle To Crack Brazil Market | online.wsj.com

Multinationals like ADM will enter the Brazilian sector, but should they do it now? Overoptimism in Brazil's sugar sector will lead to overpricing of assets The Brazilian sugar sector may be headed for a correction.

Philip CorzineGeneral ManagerSouth American Soy LLC

The opportunity to make significant changes in US farm policy will likely be squandered, more of the same the most likely outcome.

September 7, 2007

Analysis of:U.S. Ag Secretary Wants Lower Farm Subsidy Limit | www.soyatech.com

It appears that Congress may, yet again, renew many of the provisions in the 2002 program…pushing the issue of true reforms to be  played out in the courts of the WTO.  The US will eventually be forced to "level the playing field" on these issues, and it may be forced on the farm sector at a time when is will be much harder to swallow. Drop Direct Payments, they serve no purpose Drop Marketing Loans & LDP's, they disrupt market signals and rotations Put More Money into Counter-Cyclical Payments, they provide income stability to ag producers, and the entire ag sector, but don’t add much market signal distortion. Forget About Payment Limitations, the US needs a stable and adequate supply of food and bio-feedstocks and large commercial farms are the best suited to accomplish that. Don’t penalize farms for becoming more efficient.

Philip CorzineGeneral ManagerSouth American Soy LLC

Redistribution of agricultural lands is a continuing challenge for Brazilian agriculture.

August 31, 2007

Analysis of:Brazil's Landless Movement faces new agrarian reform | www.checkbiotech.org

Brazil's landless social action movement remains a risk for both domestic and international agricultural businesses in Brazil.   The MST's unhappiness with their efforts, to date, to work politically through the Lula administration, creates the risk of additional social actions by the organization.   The MST's social and political goals for Brazil seem to aligning more closely with those of Greenpeace, and the combination of the two group's would be of concern to agricultural businesses in Brazil.

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