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Wed 1 July 2020The graph below shows new season AN 34.5% prices alongside forward wheat futures, highlighting that it now takes less wheat to buy 1 tonne of nitrogen, compared with previous years.
“New season Nitrogen prices are circa £50/t lower than last year. The tonnage of wheat required to buy one tonne of nitrogen has reduced from 1.6 tonnes down to 1.3 tonnes," explains Peter Roberts, farm business consultant at Active BP.
“Forward contracts for 2021 wheat are currently showing a positive basis over futures and so the ratio could be even lower," says peter.
“While the current spread exists, locking in a proportion of forward sales and fertiliser price is a risk management strategy worthy of consideration, particularly given the reduced output that the 2020 harvest will bring for many," adds Peter.
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