Josh Linville

Speaker said if farmers facing high fertilizer costs switch from corn to soybeans at the last minute, it would be "very bullish on corn" due to a drop in expected supply. Current fertilizer economics make corn planting unprofitable. If farmers react by reducing corn acreage just before or during planting, supply forecasts would drop sharply. The high risk of acreage loss creates asymmetric upside potential for corn prices. Farmers absorb the high input costs, government subsidies offset the pain, or the planting mix remains unchanged.

Speaker stated urea prices have already doubled and could "blow right through" the all-time high of over $900 per ton. The Strait of Hormuz closure has removed 13.5 million tons of annual urea exports with no quick replacement. There are no global stockpiles, and new production takes years to build. The market must balance via demand destruction, requiring significantly higher prices to kill enough consumption. The Strait reopens quickly, or demand destruction is more immediate and severe than anticipated.

Speaker identified wheat as the commodity he is "watching most closely" and said it could be "the one that starts to take the hits first." Non-US countries have more wheat-dominant agricultural systems and may be less able to secure limited fertilizer supplies, leading to potential yield reductions before other crops. Global wheat supply is most immediately at risk from the fertilizer shortage, which should be price supportive. Major wheat producers are unaffected by the supply crunch, or a demand collapse offsets the supply threat.