From the Minneapolis StarTribune:Farmers are cautious over the ability of grain and oilseed prices to stay near record highs, and the impact of US drought on profits, prompting a continued reluctance to commit in advance to fertilizer purchases, PhosAgro said.The phosphates and nitrogen group said that demand for nutrients had proved "strong" in the first half of the year, boosted towards the end of the period by the return of India, the top importer, to buy-ins.However, this disguised a trend among primarily US and European growers to delaying purchased "until the actual application season started".Sensitive periodIn part this is due to concerns over the ability of prices to maintain their rally, which has driven Chicago corn and soybean futures to record highs.Farmers were badly caught out in 2008 by a collapse in crop values as the global recession hit, hurt in part by inventories of fertilizers they had built-up at high prices, which tumbled too.The concerns chime with worries among Chicago investors too that futures may repeat their declines of last year, when corn prices tumbled 28% from a late-August peak as funds sold-off.Mike Mawdsley at broker Market 1 said: "Funds are long. If they choose to leave markets can go down."Last year we lost $2.27 a bushel in corn and $3.13 in soybeans between the end of August and the first part of October."...MORE
Amid drought, record-high farm profits seen
The worst U.S. drought in more than five decades is forecast to raise farm profits to a record $122.2 billion this year as higher prices and insurance payments outweigh crop losses from the dry conditions. Income will rise 3.7 percent from a revised $117.9 billion in 2011, the U.S. Department of Agriculture said. The forecast is up from $91.7 billion in February. The value of crops will rise 6.7 percent to $222.1 billion, an all-time high, while revenue from livestock sales will decrease 0.1 percent to $165.8 billion, the USDA said. Expenses such as diesel fuel and animal feed will increase 6 percent to $329.1 billion....