Central Florida: A series of cold fronts crawled across the nation last week, engulfing much of the eastern U.S. in heavy precipitation. Several areas experienced two inches or more of rain, including the Tennessee Valley, western North Carolina, the Carolina coasts, and most of Florida, according to the National Weather Service.
Producers reported steady demand out of the Central Florida market, with the so-called “monster” corn crop purportedly driving interest. Sources said logistics remain the biggest hurdle going forward, with phosphate sellers in the state likely to face snags in product repositioning as late summer material begins to flood the state’s overtaxed rail lines. Truck-loaded DAP prices were therefore expected to hold or increase their premium over rail-delivered product.
The price of DAP sold in the Central Florida market was quoted in a range of $435-$440/st FOB, unchanged from the previous week, with truck-loaded phosphates said to account for the majority of the range’s top end.
MAP supply was limited, with prices said to run $20/st FOB above DAP.
U.S. Gulf: Transactions on the NOLA barge market slowed to a crawl ahead of the Southwestern Fertilizer Conference. A smattering of barges were reported to have changed hands throughout the week, but overall activity was decidedly muted.
Despite the lull, sources described solidifying prices across the board, with DAP prices firming closer to the $445/st FOB mark that has been continually sought by producers over the past several weeks.
Market consensus had generally been reached in the mid-$440s/st FOB, though a handful of transactions were reported at varying levels between $440/st and $445/st FOB.
Due in part to skyrocketing international demand, the MAP premium continued to soar, and was reported to run $20-$30/st FOB above DAP.
Domestic DAP’s upward push was at least partially triggered by firming levels for imported material, sources said. Commonly offered as “open origin/open color” in the market for the last several weeks, most sources agreed that the lion’s share of product slated to arrive in the U.S. beginning in the second half of August will be of Chinese origin, though Mexican-sourced phosphates could arrive for NOLA discharge as well.
Despite reluctance by some to take a chance on product of questionable quality (“I don’t know of anyone willing to buy ‘open origin,’” said one source), a number of traders described success in offering the product at or around $435/st FOB for light-colored material, or closer to $440/st FOB for dark.
Indeed, $440/st FOB seemed to be the magic number, sources said. Anything offered below that would draw buyers, who would then turn around and attempt to resell the tons at as close to $440/st FOB as possible.
Industry players continued to express skepticism about the total amount of imported material bound for the U.S., estimated early in the season to be in the neighborhood of 1 million st. One source speculated that the final tally would lie closer to half that amount.
When and if Moroccan-sourced material would appear on the river was another mystery entirely. Many in the industry expected the North African-produced phosphates to have already hit the market, though the product’s continued absence, as well as any timeline for its reappearance, were ripe for speculation.
One source claimed Moroccan state-owned OCP had steadfastly refused to ship any phosphates to North America – beyond PotashCorp’s previously contracted tons – for any price below $550/st CFR, a level considerably above the current market.
Slow but steady demand from terminal customers also lent price support to the barge market, sources said. Terminal op