Central Florida: As a result of heavy exports, phosphate producer inventories continued to be on the low end and will likely remain there, at least until sometime in September.
Producers were holding firm to their asking price, but no one had come forward seeking a large quantity, which would test their resolve. However, a trader was offering truck sales at $10/st FOB below the price sought by producers.
The DAP price range for Central Florida continued unchanged last week at $490-$500/st FOB. CF and Mosaic were listed at the $500/st FOB mark, while truck sales by traders accounted for the low end of the range.
MAP continued to sell at a $20/st premium to DAP in Central Florida. PCS Sales, which produces MAP at its White Springs facility in North Florida, was selling at prices comparable to the market.
U.S. Gulf: Temperatures dropped slightly in the Midwest last week, but rain was scattered and did little to break the long running drought that has destroyed crops and sent grain prices through the roof.
Farmers who have been able to irrigate or have been lucky enough to get adequate natural moisture to save large portions of their crops will do very well, while the others will collect on their crop insurance.
Water levels on the Mississippi River received only a brief reprieve from rain in the Ohio Valley. Levels were so low late last week that barges were lightening loads and moving very slowly. That not only affects the movement of fertilizers, but also grain and virtually everything else that moves by water.
Scattered rainfall in the Midwest early last week was not really enough to save the nation from major agricultural losses, but it did hit the futures market. Crop prices were mostly down in comparison to the previous week.
The corn price for December dropped to $8.05/bushel, down from $8.2575/bushel a week earlier. The corn price for December 2013 was $6.3425/bushel, decreasing from $6.4625/bushel the previous reporting period. For November 2012, soybeans bucked the trend and rose to $16.27/bushel from $16.235/bushel the previous week, but beans for November 2013 decreased to $12.78/bushel from $12.825/bushel a week earlier. Wheat for July 2013 fell to $8.3275/bushel from $8.855/bushel the week before, and wheat for July 2014 was listed at $7.91/bushel last week, down from $7.93/bushel the previous week.
Terminal prices were holding despite a continued weakening in the NOLA DAP barge market, although business was slow.
NOLA DAP barge prices got some support from producers, who sources said were buying spot barges rather than selling last week. A source said CF Industries purchased 10 NOLA DAP barges at $510/st FOB, while Mosaic was buying at $508.50/st FOB.
However, a trader snatched up a deal on the Lower Mississippi at $499/st FOB, which was inevitable due to the low water levels in the South. Those who had already agreed to take barges and cannot unload them must either pay demurrage fees or sell.
As water in the Mississippi River continues to fall, so will prices – at least until the fall season starts. By that time, rain should be on the increase and farmers will need phosphate for their fields. Most in the industry still believe the fall season will be normal, or close to it, because crops use phosphate during the early stages of growth, so most of it will have already been used – even with a crop that fails.
Prices moved in both directions for the NOLA DAP barge market last week. The range changed from $500-$505/st FOB the previous week to $499-$510/st FOB last week.
Inventories remained low for all producers, but watch for prices to remain static until rain raises the water level on the river system. Then sources say prices should strengthen.
U.S. Imports: The U.S. saw a b