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The Single Dumbest Thing Bill Doyle Has Ever Seen

October 25, 2013
By: Davis Michaelsen, Pro Farmer Inputs Monitor Editor

PotashCorp CEO Bill Doyle had venom in his words for Uralkali on Thursday and the Saskatchewan potash producer may have reason to be upset. PotashCorp took a big hit over the third quarter, posting losses to expected Q3 revenue, forcing the potash giant to lower its full year earnings projections.

On a conference call yesterday, Doyle called Uralkali's approach the "single dumbest thing that [he's] ever seen." Doyle noted that market psychology "...yearns for stability and certainty, not upheaval."

The bee in Doyle's bonnet appears to stem from the rumors of drastic declines in potash pricing as a result of Uralkali's new focus on volume over price. The idea of overproducing potash to corner marketshare and drive others out of business has North American suppliers and retailers waiting out declines for fall refills and in some cases, having to write down product already on hand.

Retail action has heated up and applications are underway in southern parts of the Corn Belt already. Potash, along with phosphates and nitrogen products showed strong signs of bottoming this week, but are priced well below year-ago. So much so that even mighty PotashCorp is having trouble hitting its marks.

As we look to switch over to the December 14 corn futures contract, nutrient has left a lot on the table over the past few months and we expect pricing to try to make some of that back. Business at retail outlets is starting to pick up for fall applications, and growers are the real winners here as nutrient is priced at the long awaited low end, along with Dec. corn futures.

By spring, depending on the urging of Dec corn, fertilizer prices are expected to run roughly 10% higher than today's price. Consider a 20% hedge for spring today.


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