Central Florida: The Southeast continued to be a strong market, and business was on the increase in the Northeast and Eastern Cornbelt last week. Temperatures continued to be warm for this time of year, and field activity was picking up steam.
Lining up trucks to move product from terminals to dealer warehouses in the Mid-Atlantic and the Eastern Cornbelt was especially difficult late last week, but the reason was not clear.
Mosaic was using railcars to ship phosphate from Central Florida to its warehouse system. Few – or very few – new prompt spot railcar transactions were done last week, but that situation could change rapidly, as dealers deplete bins and begin reordering.
Inventories in Central Florida were on the low side last week, but that should begin to change as Mosaic winds down its curtailment of 250,000 st of phosphate at the end of this month. During the slow domestic winter season, most of what was produced was used for export.
Raw materials costs for phosphate products will increase in April. Recent ammonia negotiations resulted in a bump of $70/mt, from $400/mt to $470/mt. Negotiations for new second-quarter molten sulfur prices began last week, and a source said sulfur producers were seeking an increase of $10/lt.
The Central Florida DAP price range drifted south a little last week, to $460-$465/st FOB. CF Industries was posted at the $465/st FOB mark, and Mosaic was ready to do business around $460/st FOB, depending on quantity. MAP was listed at a $20/st premium to DAP by Mosaic in Central Florida, about the same difference as from traders, and continued to be in short supply. PCS Sales was selling at prices comparable to the market.
U.S. Gulf: NOLA phosphate barge transactions were a little slower last week, and buyers were willing to pay a bit more for barges that were already on the water and moving north.
Mosaic has returned to near full production at Faustina, and has completed work on a plant to produce micro-essentials, along with DAP and MAP.
Despite the arrival of an early spring this year, the NOLA phosphate market has yet to spring into full gear. One source said it was being restrained by fears of having anything left at the end of the season, which was odd because the season had only just begun. Apparently, many buyers were waiting until they had sold a fairly large portion of the barge position they purchased before going back into the market.
Most traders were far more concerned with urea than DAP or MAP. However, the next couple of weeks may be the most important for DAP. In order for farmers to get the maximum yield from the corn crops, a lot more DAP will have to be put on the ground.
As the export market continued to weaken last week, the chances of using domestic phosphate barges for transloading and resale offshore were diminishing. Russian DAP was still a possibility, but even that was becoming less attractive.
The Army Corps of Engineers had a small craft advisory in effect for the Arkansas River last week, as the flow was twice as fast as the Corps requires to issue the warning. Submerged logs and other debris carried into the river made it dangerous, even for barge traffic.
For the second week in a row, crop prices were down. Although crop prices were trending downward, they were still high on a historical basis. It is still a good time to be a farmer.
Prices for corn futures were lower last week compared to the previous week, falling from $5.5625/bushel to $5.2925/bushel for December 2012. The corn price for December 2013 was $5.26/bushel, decreasing from $5.48/bushel the previous reporting period. Soybeans for November 2012 moved lower to $13.10/bushel from $13.135/bushel the prior week, and beans for November 2013 decreased to $12.215/bushel from $12.2325/bushel a week earlier. Whe