Market Watch – April 18, 2011

U.S. Gulf/Tampa: Negotiations for May had not begun last week, but it appeared the price could go up. Sources cited recent gas curtailments in Trinidad, as well as a Yara turnaround there. They also pointed to higher prices on the world market. Sellers may seek an increase of between $20-$25/mt for May.

Eastern Cornbelt: Ammonia pricing was steady at $675-$695/st FOB in the region, with the low out of Illinois terminals and the upper end in Indiana. Offers for fall ammonia tons were at the $675/st FOB level in the Illinois market.

Sources described fieldwork as spotty in the region at mid-month due to wet conditions. “There has not been a huge amount planted, but we’ve been able to scatter some ammonia and dry fairly well, so the crunch won’t be quite so bad when it opens up again,” said one contact.

Western Cornbelt: An Iowa source said a blistering application pace in early April allowed his business to complete 90 percent of its ammonia season in just nine days this spring. Wet conditions limited fieldwork in the region at mid-month, however. He said ammonia volumes were average to slightly above average this year.

The ammonia market was tagged at $625-$650/st FOB regional terminals for prompt tons, down slightly from last report.

California: The anhydrous ammonia market remained at $685-$690/st truck-DEL in the state, with aqua ammonia referenced at the $185/st FOB mark.

One source said California growers were fertilizing cotton ground, sidedressing tomatoes, and fertilizing tree crops in the southern Sacramento Valley, and Central Valley contacts said preplant fertilizer was moving steadily on corn ground.

Pacific Northwest: The anhydrous ammonia market was quoted at $720-$735/st DEL in Washington, reflecting an increase from March pricing levels.

One Washington source said growers in his trade area are behind on spring planting, but steady activity at mid-month was helping some areas catch up. Wind continued to slow activity in the state, however, and sources also complained of cold temperatures. “Spring has sprung, but we definitely could use some heat units,” said one central Washington contact last week.

Western Canada: Anhydrous ammonia was steady at $817-$825/mt DEL in Manitoba, $825-$834/mt DEL in Saskatchewan, and $834-$861/mt DEL in Alberta. Dealer postings were in the $827-$871/mt DEL range in the region.

One source said March fertilizer shipments to the farm were heavy as growers anticipated spring thaw-related fieldwork delays in April. Dealers continued to talk of high expectations for the 2011 fertilizer year, citing strong canola and wheat prices.

India: Even though demand remains strong, FACT cancelled its 7,500 mt tender. Sources say the buyer was not pleased with the prices offered from the Arab Gulf producers. The lowest offer in the tender was $538/mt CFR.

Asian sources said FACT will still need the material. The issue remains finding a seller willing to offer tons at a lower price.

The higher ammonia price to India reflects a general global price rise.

Middle East: Prices are holding in the low $500s/mt FOB. Demand for ammonia remains strong as area producers report full order books into May.

The strength of the market has traders looking for any signs of a season downturn in prices.

Black Sea: Even as the spring direct application begins to wane in the U.S., sources report strong sales out of Yuzhnyy. The price remains in the low $500s/mt FOB, with producers reportedly sold out for the rest of April and strong order intentions for May.

Urea

U.S.