Central Florida: Finally, the Central Florida phosphate market was moving into balance with the NOLA DAP barge market last week. In fact, it was beginning to trail behind the river, which should be the case.
Nevertheless, it still wasn’t moving – either in terms of price or activity. Product being shipped from Central Florida last week was either based on what was ordered earlier, or was moving directly to warehouses and terminals, mostly owned by Mosaic.
That can’t last. The USDA estimated that nearly 96 million acres of corn will be planted this season, and that will take huge amounts of fertilizer, including phosphate. At the moment, though, nitrogen products were in the limelight and were casting a shadow over phosphate.
Inventories were still on the low side in Central Florida last week, and that was mostly due to export business. That will change as Mosaic returns to full production after somewhat curtailing it processing facilities during the first quarter.
Phosphate producers were in the early stages of negotiating with their major sulfur suppliers for new second-quarter molten prices for Tampa. After remaining relatively stable during the first quarter, world sulfur prices appeared to be up slightly during the past couple of weeks.
The Central Florida DAP price range was unchanged last week at $460-$465/st FOB. CF Industries was posted at the $460/st FOB mark, down from $465/st FOB. Mosaic was also at 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: The bulls weren’t exactly running last week, but they were walking pretty fast – at least in the NOLA DAP barge market.
During the first week of April and the beginning of spring, NOLA DAP barge transactions began picking up speed in terms of both activity and price. The only thing that was surprising was that it hadn’t happened sooner.
Terminals were just beginning to get to work getting rid of some of those full bins of phosphate, and that was expected to gain speed during the next several weeks as more farmers get ready to plant.
One odd little twist was MAP. While DAP was moving, MAP was beginning to slide backwards and was not keeping pace. The price differential between DAP and MAP had been as great as $35/st FOB a month ago, but was down to as little as $3/st FOB late last week. The reason was not clear. It was not even attributable to domestic versus Russian, because neither was bringing a big price difference.
There was a big difference between prices for Russian and domestic DAP, however, with sources reporting as much as $38/st FOB more for domestic.
Of course, there was a big spread last week for domestic NOLA DAP barges as well. Between the beginning of the week and the end of the period, prices went up as much as $27/st FOB. Naturally, NOLA DAP barges in position – or at least on the water and moving – were commanding a higher price, but all prices were based on FOB NOLA. Toward the end of the week, even barges about to be loaded were coming in close to the top price in the week’s range.
By late last week, most terminals had either raised their phosphate prices or were planning to very soon due to the higher cost of NOLA DAP barges. Terminal prices moved to a higher range of $480-$515/st FOB, depending on location and when the bins were filled. Terminal prices were almost certain to increase this week.
Crop prices reversed the trend for the previous couple of weeks, and moved up across the board in early April. Prices for corn futures rose from $5.2925/bushel the previous week to $5.4725/bushel for December 2012. The corn price for Decem