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Crop input updates
Falling oil and trucking rates offset rising fertilizer prices.
Oil prices fall on greater anticipated supply.
West Texas Intermediate (WTI) oil prices fell notably over the last month. While U.S. oil inventories dropped in February, this was offset by the following developments which portend increasing global supplies relative to demand:
- The Organization of Petroleum Exporting Countries (OPEC+) intends to increase production levels over the next month.
- Expectations that non-OPEC+ producers will continue to increase production levels, including the U.S., Canada, Guyana and Brazil.
- Efforts by the Trump Administration to negotiate with Russia suggests a de-escalation of the conflict in Ukraine and an eventual normalization of trade dynamics.
- The Trump Administration’s threat and application of tariffs are expected to weaken global economic growth and trade levels.
- Overall sentiment of the global economy has weakened.
Natural gas prices spiked mid-February due to cold weather and a moderate rise in exports. The Trump Administration is shifting policy to support more Liquified Natural Gas (LNG) exports, including the approval of a major export facility in Louisiana. Greater export capacity will eventually increase demand for U.S. LNG and align domestic prices with those in other regions where prices tend to be higher, including Europe.
Demand for transportation falls.
Weakening global economic conditions, increasing risk of tariffs, de-escalation between the U.S. and Russia, lower prospects of vessel attacks in the Red Sea and the conclusion of the Lunar New Year in China are weighing on both container and bulk shipping prices. Following a surge in trucking rates in January - due largely to inclement weather and companies frontloading imports ahead of tariffs - seasonal trends along with softness in manufacturing activity and retail sales are weighing on demand. Lower energy prices should limit upside price risk for both shipping and trucking transportation in the short term.
Fertilizer prices rise.
Fertilizer prices were up across the board in February, with nitrogen-based products, urea and urea ammonium nitrate (UAN28), leading the way at 6.2% and 7.7%, respectively. Rising prices for natural gas, the primary feedstock for nitrogen fertilizers, and increased estimates for corn acres in both the U.S. and Brazil drove prices higher. Total demand in 2025 remains uncertain as low corn prices could incentivize some growers to reduce application rates. De-escalating tensions between the U.S. and Russia should have a dampening effect on fertilizer prices moving forward.
