Central Florida: Central Florida phosphate traders reported market conditions essentially unchanged from recent weeks. How long they stay that way was ripe for debate, however, as industry players kept a close eye on perceived instability in the NOLA barge market as a potential indicator of things to come.
“If prices on the river are dropping lower than Central Florida, who knows how long they can stay (at current levels)?” one trader questioned.
DAP transactions on the Central Florida phosphate market were unchanged at $435-$440/st FOB. Traders continued to describe MAP as unobtainable in the present market, with the price pegged at $455-$460/st FOB based on producer postings.
Rail congestion, reportedly still problematic throughout much of North America, was said to ease considerably for product shipped out of Florida, removing one potential barrier to market participation. “Florida rail is almost back to where it was before it got in real trouble,” said one source.
U.S. Gulf: Sources described a standoff in the NOLA DAP market last week, as buyers and sellers held vastly differing views of exactly what constituted fair market value.
Most buyers were reportedly willing to pay around $425-$430/st FOB NOLA equivalent for September-loading DAP, though sources put the bulk of offers closer to $445-$455/st FOB.
The $15/st FOB gap proved a significant obstacle for the week, though a small number of confirmed transactions were reported in a range of $435-$443/st FOB. MAP continued to enjoy strong price support on limited volume, with sales occurring in a range of $475-$480/st FOB.
The justification for low-priced DAP bids was attributed to a handful of recent barge sales at levels in the mid $420s/st FOB. The barges’ real dollar values were much less clear, however, thanks both to the continued foggy freight climate as well as some sellers’ rumored propensities for artificially inflating barge freight to pump up their netbacks.
A closer look at the sub-market trades suggested actual seller netbacks closer to the mid-$430s/st FOB, an amount suggested by many to be the actual baseline for the current market. Some potential buyers were reluctant to pull the trigger at those levels, however, for fear they could end up on the wrong side of a newly adjusted market should sellers unexpectedly accept the lower bids.
The uncertainty led potential buyers to adopt a “wait and see” approach to new purchases, and the market was expected to remain low-key at least through the end of the TFI World Fertilizer Conference, which wraps up on Sept. 9.
Anxiety regarding September 2014 corn prices, which hit a four-year low in intraday trading last week on reports of a likely record harvest, also contributed to the lack of activity in the market. Sources described “big concerns” that fertilizer application rates could follow grain prices south and depress end-user purchasing ahead of the river closing.
Phosphate inventories were said to remain strained throughout the country, though supply tightness at upriver terminals had eased somewhat from recent weeks.
Prices on the NOLA barge market softened to $435-$443/st FOB based on limited transactions, down from $435-$447/st FOB at last report. MAP was quoted in a range of $475-$480/st FOB on high demand.
Eastern Cornbelt: The DAP market remained at $480-$490/st FOB regional warehouses in the Eastern Cornbelt. MAP was reported in the $510-$530/st FOB range, depending on location, and in tight supply.
10-34-0 was steady as well at $460-$480/st FOB in the Eastern Cornbelt.
Western Cornbelt: DAP remained at $480-$490/st FOB most terminals in the Western Cornbelt, with MAP pegged in the $510-$530