Central Florida: Traders reported increased activity in the Central Florida spot market last week, though a decline in prices accompanied the flurry. DAP railcars were quoted down to $425/st FOB, while trucks continued to enjoy a moderate premium.
Some attributed the pop to increased end-user demand and strength in the futures market, where corn contracts have recently trended upward. Others believed freight played a role as well.
Rail operator CSX announced across-the-board increases of $5-$10/st on all railcars out of Florida beginning Jan. 1, 2015, sources said. One market veteran speculated that the price bump stirred buyers to action so as to avoid paying the increase. The rush to complete purchases in the current tax year also likely provided motivation.
CSX’s new pricing was unlikely to significantly affect buyers in New England, one trader said, but the increase didn’t help Florida traders offering farther west. “If you’re just about anywhere in the Midwest, you’re better just buying off the river,” he said. “Rail can’t compete.”
The Central Florida DAP market was quoted in a range of $425-$435/st FOB, down from the previous week’s range of $430-$435/st FOB. MAP commanded a $20/st FOB premium over DAP. Sources expected January DAP to rise by about $5/st FOB.
U.S. Gulf: The NOLA barge market continued to firm heading into the holidays, extending a bullish trajectory that began in late November. DAP transactions were concluded as low as $425/st FOB early in the week before rising to about $430/st FOB. Full January material moved as high as $435/st FOB.
MAP continued to draw little interest compared to DAP, and was called $440-$445/st FOB.
Supply has roundly been touted as the prime mover behind the market’s recent upswing. Between Mosaic’s decision to cut phosphate production in the fourth quarter, a relative dearth of imports following a glut in the fall, and Mississippi Phosphates Corp.’s announcement that it would halt production following in the wake of filing for Chapter 11 bankruptcy protection, sources have consistently pointed to thin barge availability at NOLA as pushing up prices.
Last week was no different, though demand-side factors may have begun to exert some influence as well, some observers noted. “(The market) is still supply driven, that hasn’t changed,” said one contact. “But we could see it switch to a demand-driven market.”
Citing a number of factors, including an uptick in terminal demand for the week and strength in the price of corn, a number of sources spoke of a renewed sense of conviction permeating the market. “People are starting to feel more comfortable,” one source said. “There’s much more confidence in the market than there was a month ago.”
NOLA spot market prices were quoted in a range of $425-$430/st FOB for DAP, an increase from the previous range of $417-$425/st FOB. MAP was called $435-$445/st FOB.
Eastern Cornbelt: DAP pricing was unchanged at $460-$475/st FOB regional warehouses in the Eastern Cornbelt, with the low reported at Cincinnati. MAP was pegged in the $475-$500/st FOB range in the region, depending on location.
10-34-0 was quoted at $520-$540/st FOB for limited tons in the region.
Western Cornbelt: DAP was tagged at $460-$470/st FOB regional warehouses, up $5/st from last report, with MAP reported at $485-$495/st FOB in the Western Cornbelt. A Nebraska source quoted delivered MAP at the $515/st level or higher last week.
10-34-0 remained “very strong” at $520-$540/st FOB in the Western Cornbelt, but tons were “hard to come by,” according to one regional contact.