U.S. Gulf/Tampa: The $15/mt increase to $485/mt CFR at Tampa for September was a long time coming, according to sellers who pointed to eight months of steady decline. It was also an anomaly, as it appeared to be about the only fertilizer price with any legs in the market right now.
Some players are optimistic that the Tampa strength can hold into October. Less product from Trinidad may make that a possibility. PotashCorp is currently taking a turnaround in Trinidad at its number 4 plant (Sept. 2-22). PotashCorp expects second-half October gas curtailments to cut ammonia production by 15 percent. Sources said other producers may see gas curtailments cut as much as 20 percent.
New production in Algeria, however, may easily offset any Trinidad curtailments.
The October NYMEX natural gas close on Sept. 5 was $3.575/mmBtu, versus the Aug. 29 $3.618/mmBtu.
Eastern Cornbelt: The anhydrous ammonia market was unchanged at $530-$540/st FOB regional terminals, with the low in Illinois and the upper end in the Indiana market.
Crop conditions in the Eastern Cornbelt fell slightly from the previous week due to hot, dry weather that blanketed the region in late August.
As of Sept. 1, USDA assigned good or excellent ratings to 72-78 percent of the corn and soybeans in Ohio, 62-66 percent in Indiana, and 52-57 percent in Illinois. Crop development also lagged, with just 3 percent of the Indiana corn crop rated as mature last week.
Western Cornbelt: The anhydrous ammonia market remained at $505-$545/st FOB in the region, with the low reported in Nebraska.
Drought conditions continued to expand in the Western Cornbelt in early September, and crop quality continued to slip. As of Sept. 1, just 1-2 percent of the corn crop in Iowa and Nebraska had reached maturity, compared with 15 percent in Missouri. Corn development in all three states trailed the five-year average.
USDA assigned good or excellent ratings to 39 percent of the corn and soybeans in Iowa and Missouri last week, compared with 64-66 percent in Nebraska.
Fertilizer buying activity was virtually nonexistent in the region. “Calls are few and far between,” said one Missouri contact. “Most are waiting for farmers to finish harvest to see what the follow-up is. With prices being soft, everyone thinks it’ll go lower.”
Low crop prices were also fueling the hesitancy. “That’s slowing folks down,” said one source. “Guys are not wanting to jump out there real hot and heavy, with the markets soft and corn prices going down. That’s going to temper some thinking.”
In some areas of the region where crops look particularly good, however, sources are still banking on a brisk fall application season. “We’re going to have a good corn crop here, so the potential for a good fall is there if the weather holds out,” said one contact.
Southern Plains: Despite beneficial rains in August, the Sept. 3 U.S. Drought Monitor continued to show severe to extreme drought conditions across Colorado, western Kansas, western Oklahoma, and most of Texas and New Mexico. All four states also had patches of exceptional drought last week, which is the worst drought classification.
The August precipitation helped many crops in the Southern Plains, but the persistent drought has taken a toll on crop quality in the region.
The wet August also delayed applications of ammonia on preplant wheat, and sources said growers were opting for other nitrogen sources as a result. The anhydrous ammonia market continued to be quoted at the $485/st FOB level out of regional production points for prompt tons, with the Kansas pipeline terminal market pegged at the $510/st FOB mark, give or take.
California: