Central Florida: Phosphate does not sell at a fast pace during the winter months, though this should be the time of year dealers stock their warehouses to prepare for the onslaught of farmers ready to plant their crops in the spring. That’s not happening this year.
Prices on the Gulf’s river system were so much lower than those from Central Florida, dealers were too nervous to make a move. Will the price go down? When? And by how much? No one is confident, and that has created a problem.
Mosaic has cut back its production, but that has not created any shortages or any new demand. Even export demand, which is normally filled from Central Florida, has been lax as of late.
Phosphate producers will get a break in raw materials costs. Ammonia prices for Tampa fell $83/mt last week, from $555/mt to $472/mt, and negotiations for new first-quarter sulfur pricing were expected to result in lower prices as well.
With no significant movement, the Central Florida DAP price range was unchanged last week at a flat $480/st FOB. Very large buyers may be able to get additional discounts, but that was not clear. Both Mosaic and CF Industries were posted at the $480/st FOB mark. MAP was in short supply, and was priced at a $20/st premium to DAP by Mosaic in Central Florida – about the same difference as from traders.
PCS Sales was selling at prices comparable to the market.
U.S. Gulf: There were few NOLA DAP or MAP barges on the water last week, and there were even fewer buyers.
“No one wants to take a chance,” one trader said. “They (traders and dealers) need to buy now, but people are nervous. If there is an early spring, there will be some logistics issues. People don’t want to do the wrong thing and lose.”
That’s understandable. The NOLA DAP barge market fell after Christmas to as low as $425/st FOB, then rose to as high as $490/st FOB, then fell back again. It seemed last week that it would be hard to drop much lower, but no one could guarantee that wouldn’t happen.
The NOLA DAP barges that were sold were apparently bought when the market was at its low end a few weeks ago, and those buyers were just getting rid of them.
If spring does come early, farmers will want to take advantage and get their crops in the ground early as well. Still, January was much too early to take the chance. What to do? If planting does begin early, phosphate will not be in place to meet the need, so the demand may push prices up by a significant margin.
Prices for corn futures moved up last week compared to the previous week, rising from $5.53/bushel to $5.70/bushel for December 2012. The corn price for December 2013 was $5.58/bushel, also up from $5.466/bushel the previous reporting period. Soybeans for November 2012 enjoyed a bump as well, moving higher at $12.27/bushel from $11.91/bushel the previous week. Soybeans for November 2013 were $12.02/bushel, up from $11.815/bushel the previous week. Wheat for July 2012 rose to $6.805 from $6.3925/bushel previously. Wheat for July 2013 was listed at $7.425/bushel last week, up from $7.0775/bushel a week earlier.
The NOLA DAP barge price moved down last week to $433-$446/st FOB, compared with $440-$450/st FOB the previous week. MAP barges were reportedly fetching a $35/st premium over DAP, although there was a lack of activity to test the market.
The market may continue to be depressed for the next few weeks, but prices should begin to rise in February if farmers begin to empty dealers’ warehouse bins.
Eastern Cornbelt: DAP remained at $510-$530/st FOB regional warehouses, with MAP pegged in the $530-$550/st FOB range in the Eastern Cornbelt. An Indiana source pegged the dealer market for DAP at $515/st FOB and $530/st DEL, with MAP at the $540/st FOB mark