California:
Potassium nitrate pricing in California remained at $1,235/st FOB Stockton for bulk, $1,340/st FOB for bulk bags, and $1,360/st FOB for 50-pound bags.
All posts by hlancey@bloomberg.net
Potassium Thiosulfate
Crops/Weather
Eastern Cornbelt:
Winter weather advisories were in effect for parts of the Eastern Cornbelt late in the week, with snowfall expected to total up to four inches in northern Illinois and 12-18 inches in northern Indiana.
The snowfall followed a period of bitterly cold temperatures earlier in the week, with highs topping out in the single digits and wind chills falling to double digits below zero in central and northern Illinois.
Parts of northern Ohio were bracing for 3-6 inches of snow on Jan. 18-19, with southern Michigan expecting 6-10 inches of accumulation. Highs were expected in the 20s in both states, with wind chills dropping to the teens or single digits.
Western Cornbelt:
A deep freeze blanketed most of the Western Cornbelt during the week. Iowans woke up on Jan. 15-16 to subzero lows and wind chills as low as minus 40.
Snow flurries on Jan. 18 dropped 2-3 inches across much of central Iowa, with another round of arctic cold expected by the weekend, with lows once again dropping to the single digits and wind chills falling to 15-20 degrees below zero. Snow and windchill warnings were also in effect in central and northern Missouri during the week.
Snow squalls pushed through eastern Nebraska as well on Jan. 18, along with gusty winds that caused blizzard conditions, resulting in multiple road closures across the state. Wind chills down to the negative 20s were expected on Jan. 20 in central Nebraska, but warmer weather was on tap for the following week.
California:
Breezy, wet weather was reported for much of California during the week. The prior weekend brought heavy snow to the Sierra Nevada and an inch or more of rain to the Sacramento Valley, with 1-2 feet of snow reported in the Sierra and southern Cascades.
Californians were bracing for another wet weekend on the way, with rainfall totals ranging from a half-inch to 2.7 inches in Southern California, along with more snow above 7,000 feet. Forecasts warned of minor flooding in some areas as a result, along with temperatures in the 60s and low-70s in Southern California and the 50s and low-60s in Northern California.
Pacific Northwest:
The Pacific Northwest experienced cold temperatures and a wintry mix of precipitation in mid-January. A powerful ice storm left nearly 90,000 customers in Oregon without power at midweek, with at least three deaths reported, prompting Oregon’s governor to declare a state of emergency for at least one county.
Steady rainfall was reported at lower elevations in Washington, while heavy snow fell at higher elevations in the Cascades and western Washington, with reports of 1-2 feet of accumulation possible at some locations. The snowfall impacted much of Idaho as well, with up to six inches reported in the Treasure Valley on Jan. 18.
Western Montana also saw heavy snowfall during the week, with up to 14 inches in the Flathead Valley, 5-10 inches in the Bitterroot Valley, and 3-6 inches in southwestern Montana. The snow followed bitterly cold temperatures, which dipped to the negative 20s for much of the state over the prior weekend.
Western Canada:
The week began with extreme cold warnings across most of Western Canada, with wind chills falling to the negative 40s and 50s C. Blizzard conditions were also reported across northern Manitoba over the prior weekend.
Slightly warmer weather was reported on Jan. 16-17, but snowfall warnings were in effect for southern Alberta on Jan. 17-18, with forecasts warning of 15-40 cm of accumulation, depending on location.
In British Columbia, heavy snowfall in Metro Vancouver and southwestern areas of the province caused school and business closures, power outages, and the cancellation of dozens of flights at Vancouver International Airport late in the week. Up to 39 cm of fresh snow was reported in Chilliwack, B.C., on Jan. 18, while Vancouver Island collected 21 cm.
Transportation
US Gulf:
Freezing conditions in the US Gulf triggered precautionary shutdowns throughout the region during the week. In addition to the cold weather, low water levels forced draft reductions of 15-20% on northbound travel above New Orleans, La., while towing widths topped out at 6-7 barges, down from the typical 7-8 barges, depending on horsepower. Maximums drafts continued at 9.5 feet in the East and West Canals on Nov. 16, sources said.
Bayou Sorrel Lock saw ongoing closures for guidewall repairs from 7 a.m. to 4:30 p.m., Monday through Friday, while the site was reportedly shut completely on Jan. 18 for a concrete pour. With 27 tows counted in line to lock, delays were quoted up to 58 hours on Jan. 18. The project is scheduled to run through June 26.
Harvey Lock will be offline for miter gate repairs during daylight hours on Jan. 22-25. Harvey has been closed to overnight navigation since October due to low head conditions.
The BNSF Railroad Bridge at Mile 121.3 of the West Canal was shut from 8 a.m. to 1 p.m. on Jan. 16 and 18. The closures were scheduled to repeat on Jan. 23, 25, and 30, as well as on Feb. 1 and 6.
Repairs to the St. Claude Avenue Bridge, located at Mile 6.5 in the West Canal, were scheduled to block transit through the site from 6 a.m. to 10 p.m. on Feb. 24. Work at Ellender Bridge, situated at the West Canal’s Mile 243, will halt weekday movements from 7 a.m. to 5 p.m. on Feb. 5-April 12.
Temporary repairs at Bayou Boeuf Lock were expected to shut the site for 12-24 hours on Jan. 22. A longer closure was pushed back to mid-February and will include three separate travel outages lasting four days each.
Daytime shutdowns at Brazos Lock were reported blocking movements from 7 a.m. to 7 p.m. through an estimated Feb. 29, with waits noted at 5-13 hours during the week. Port Allen Lock waits peaked at nearly 10 hours on Jan. 16, while Industrial Lock delays ran as high as 39 hours, according to Corps data. Intermittent Colorado Lock wait times were reported up to 68 hours.
Mississippi River:
Rising water levels improved navigating conditions on the Lower Mississippi River during the week, though loading drafts on northbound tows traveling between NOLA and Cairo, Ill., continued to be restricted by 15-20% below normal levels. Towing widths were limited to 6-7 barges, sources said, down from the usual 7-8 barge limits.
Water levels at Memphis, Tenn., crested at 15.1-15.3 feet on Jan. 17-21 and were expected to decline to 3.4 feet on Feb. 1, above the area’s (-)5.0-foot low stage. Revetment work at Mile 214 of the lower river was scheduled for Jan. 20-28, blocking vessel traffic daily from 6 a.m. to 7 p.m., while dredging was reported at Mile 663.
Low water levels continued on the upper river, however, and sources said loading drafts were reduced by 10-15% through the St. Louis area. The St. Louis gauge was posted at (-)0.4 feet and falling on Jan. 18. Dredging was underway at Miles 166, 169, and 274, sources said.
With navigation between St. Louis and St. Paul, Minn., unavailable for the winter season, Locks 11-16 and 18-20 were open for locking on weekdays from 8:00 a.m. to 4:00 p.m. through March 9, while Locks 21 and 22 are staffed for lockages 24/7. The upper river is scheduled to begin returning for spring navigation on March 4-11.
Illinois River:
Extreme cold limited travel on the Illinois Waterway during the week. Ice gorging was noted on the southern portion of the river, and ice lockages were instituted at Starved Rock Lock, Marseilles Lock, and Dresden Island Lock. LaGrange Lock, on the lower river, was reported to have difficulty raising and lowering the dam due to ice.
Wait times ran up to 15 hours at Marseilles Lock, Corps data indicated, while delays at Starved Rock Lock were counted up to 67 hours on Jan. 15-18. Loading weights were capped at 90-95% of typical capacity. Dredging was noted at Miles 226-228.
Ohio River:
Low water levels held southbound Ohio River loading drafts to 90-95% of normal levels, sources said, or 10-11.5 feet. Tow lengths were restricted to 15 barges.
Meldahl Lock delays were posted up to 28 hours due to an ongoing main chamber outage. No timeline for repairs was available on Jan. 18. Greenup Lock will close for valve repairs between March 4 and April 12, while Markland Lock and Cannelton Lock are expected to see reduced locking capacity from April 22 to June 7.
The Tennessee River’s Kentucky Lock will shut for upper guidewall replacement from Jan. 22 through Feb. 15, and delays were reported up to 26 hours during the week. Old Hickory Lock, on the Cumberland River, will see shutdowns between March 18 and May 9.
Arkansas River:
Lock 2 will shut to daytime traffic on Feb. 5-9. Repairs to the Van Buren Bridge, located at Mile 300, are scheduled to block traffic from Feb. 7 through approximately Feb. 25. Any waiting vessels are expected to be allowed to pass the site on Feb. 16.
Ceres Solutions, Co-Alliance Approve Merger; Keystone Cooperative Takes Effect on March 1
Indiana-based cooperatives Ceres Solutions Cooperative Inc. and Co-Alliance Cooperative Inc. announced on Jan. 10 that the boards and members of both organizations voted overwhelmingly to approve a merger, which will combine the companies under the Keystone Cooperative Inc. name on March 1, 2024.
Keystone Cooperative will serve customers in Indiana, Ohio, Michigan, and Illinois with a workforce of more than 1,700 employees. The farmer-owned cooperative will have four core divisions – Energy, Agronomy, Grain, and Swine and Animal Nutrition – with expected annual revenue of $3 billion. The company will be headquartered in Indianapolis, Ind.
“Keystone Cooperative brings together two financially strong, legacy-rich, and highly successful cooperatives. This historic merger creates a cooperative that is equipped to navigate the ever-changing markets of today’s agriculture and energy industries,” said Kevin Still, current President and CEO of Co-Alliance, who will become President and CEO of Keystone.
“This powerful combination will build a cooperative that maximizes efficiencies, capitalizes on technology, and has the resources to enhance our customer experience while preparing for the needs of our future stakeholders,” Still said.
Co-Alliance and Ceres Solutions Cooperative announced on Nov. 29 that they had reached an agreement to pursue a merger (GM Dec. 1, 2023) following a three-month due diligence period that began in September (GM Sept. 1, 2023).
“Our membership has recognized the value of this combination, and we are looking forward to achieving our promise of a cooperative that is focused on the success of our members, the vitality of our rural communities, and providing an unparalleled return for our farmer-owners,” said Jeff Troike, current CEO of Ceres Solutions, who will serve as Executive Vice President of Keystone along with Scott Logue, Co-Alliance’s current Executive Vice President.
Based in Indianapolis, Co-Alliance is the result of the merger of five cooperatives in 2002, but its roots date back to the 1920s. The company provides agronomy, propane, fuels, grain, seed, hog production, and feed products and services from 79 locations in Indiana, Michigan, and Ohio, with approximately 51 of those dealing with agronomy.
Formed in 2007 as a partnership of local farmer-owned cooperatives, Ceres is based in Crawfordsville and has more than 750 team members in 37 counties across Indiana and Michigan. Ceres operates 65 locations with approximately 41 providing agronomy and/or fertilizer. Ceres added T&T Fertilizer Inc., Goshen, Ind., in 2020 (GM Feb. 7, 2020), and also completed mergers with North Central Co-op, Wabash, Ind., in 2017 (GM Aug. 18, 2017), and Falmouth Co-op in northern Michigan.
Ceres and Co-Alliance are already partners in Endeavor Ag & Energy, a joint venture that provides agronomy, propane, and feed services in north-central Michigan.
“Our
successful partnership with the Endeavor business in Michigan helped exhibit
the collaborative capacity of our organizations,” said Rick Brubaker, Chairman
of Ceres’ Board of Directors. “We look forward to seeing this team find even
more synergies with our broader businesses.”
CHS 1Q Results Off After Record Year; Wholesale Fertilizer Volumes Up 16%
CHS Inc. reported net income of $522.9 million on revenues of $11.4 billion for the first quarter ended Nov. 30, 2023, down from the prior year’s record $782.6 million and $12.8 billion, respectively. The cooperative posted record earnings of $1.9 billion for the year-ending Aug. 31, 2023 (GM Nov. 10, 2023).
“CHS earnings were strong for the first quarter, despite a relative decline from last year’s record earnings,” said Jay Debertin, CHS President and CEO. “Our focus on execution and efficiency improvements bolstered results across all operations. We continue to see the benefits of our diversified ag and energy portfolio, our strategic footprint, and investments in our supply chain.”
Nitrogen Production pretax earnings were $36.5 million, down 62% from the year-ago $96.9 million, reflecting lower equity income from CF Nitrogen due to decreased UAN and urea market prices.
Ag segment pretax earnings were $169.7 million, off 41% from the year-ago $287.3 million. Revenues were $8.7 billion versus the year-ago $9.6 billion.
CHS reported increased demand for wholesale and retail agronomy products. Wholesale crop nutrient sales volumes were up 16% during the quarter, to 1.87 million st from the year-ago 1.61 million st. However, selling prices remained lower due to global market conditions.
Robust meal and oil demand drove strong earnings in the oilseed processing business that were offset by weak US export demand for grains and oilseeds. Margins were down for grain, oilseed, and oilseed processing. In addition to exports, margins were also impacted by mark-to-market timing adjustments.
“The success of our domestic soybean and canola processing business and our international origination capabilities have helped us add value to our farmer-owners’ businesses,” Debertin said.
Energy pretax earnings were $266.8 million, down 33% from the year-ago $396.6 million. Total revenues were $2.92 billion, down from $3.34 billion. The unit experienced favorable market conditions in its refined fuels business, reflecting sustained global demand. Refining margins, however, decreased compared to the highs in the previous year due to trade flows returning to more normal levels.
CHS reported favorable costs for renewable energy credits and higher margins in the propane business.
Dangote Offices Raided in Nigeria
Nigeria’s Economic and Financial Crimes Commission (EFCC) raided the offices of Dangote Group, Lagos, on Jan. 4, according to Bloomberg. The company, owned by Aliko Dangote, believed to be Africa’s richest person, is a major multinational industrial conglomerate involved in several businesses, including nitrogen fertilizer, oil, cement, and sugar.
Dangote Group in a statement said that it has faced no accusations of wrongdoing and called the incident an “unwarranted embarrassment.” It had no further comment. EFCC has yet to issue a comment.
The news sent panic through Nigeria’s corporate board rooms. “Manufacturers are concerned that if this can happen to Dangote, it can happen to any one of them,” said Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria. “They are worried.”
Slamming the EFCC for the aggressive nature of its tactics, the association said currency allocations to more than 50 companies were under scrutiny and warned of a chilling impact on the economy.
“This news has gone around the world and many, including would-be investors, would be taken aback,” Ajayi-Kadir said in a separate statement. “This may not be the best way to show that Nigeria is committed to good corporate governance.”
Nigerian dollar bonds maturing in 2025 have fallen for seven consecutive days to the lowest since Nov. 28, their longest losing streak since September, suggesting that investors are watching what happens next.
Days before newly elected President Bola Tinubu took office in May 2023, Dangote opened its huge oil refinery to great fanfare. However, Tinubu was not among the attendees, though outgoing President Muhammadu Buhari and other heads of state were present.
The EFCC is expected to focus on the funding of the $18.5 billion refinery, which was built by Dangote and was granted access to money from the country’s central bank.
“It’s basically a signal to the business community that this government will go after anyone who they perceive may have the means to help fill the dollar gap in the government’s coffers,” said Cheta Nwanze of Lagos-based strategic consultancy SBM Intelligence.
To corporate Nigeria, it was also an unmistakable message about who was in charge. The raid came on the heels of Tinubu’s New Year’s Day speech in which he promised to “remove any clog hindering our path to making Nigeria a destination of choice for local and foreign investments.”
The EFCC’s raid on Dangote’s headquarters three days later triggered a scramble across Nigerian boardrooms to check their dealings with the central bank under Godwin Emefiele, who led it from 2014 until his ouster in June 2023.
Tinubu was highly critical of the forex practices of the central bank as he campaigned for the presidency last year, and suspended Emefiele within weeks of taking office. The central banker was arrested soon after on charges including fraud. He was taken into custody and released on bail last month.
A separate probe of Emefiele by a Tinubu-appointed special investigator has accused him, among other things, of manipulating the naira via a complex foreign-exchange regime.
Emefiele, a former governor, has denied wrongdoing. His trial on the initial charges is ongoing and no findings have been proven. He has not yet been formally charged in connection with the allegations raised by Tinubu’s special investigator.
Cormorant Blue Ammonia Expected to Go to South Korea
The SK Group-backed climate technology company 8 Rivers Capital LLC’s $1 billion Cormorant Clean Energy Project in Port Arthur, Texas, is expected to produce 880,000 mt/y of low carbon, blue ammonia, according to Bloomberg. Fluor Corp., Irving, Texas, was awarded a contract for front-end engineering and design (FEED) and procurement services for the project last fall (GM Oct. 13, 2023).
The plant will use proprietary oxy combustion technology, which 8 Rivers said captures CO2, eliminates emissions, and lowers production costs. It is expected to break ground in 2025 with commercial operation beginning in late 2027, according to Chief Operating Officer Steve Milward.
Ammonia produced from the plant will be sold at auction in South Korea, which has prioritized the fuel as a feedstock for coal-fired power plants, Milward said. Adding ammonia to coal in the production process, or “co-firing,” is part of the country’s decarbonization strategy. “There is going to be a very large demand for ammonia, I would say multimillion tons over the next decade into Korea,” Milward said in an interview with Bloomberg.
The emissions reduction benefit of this process has been challenged by some scientists, partly because burning ammonia can produce nitrous oxide emissions, a potent greenhouse gas. In addition, low-carbon ammonia is expensive to combust, according to Adithya Bhashyam, an associate on BloombergNEF’s hydrogen team.
“While it’s something that has received a lot of political support in Japan and Korea, in particular, and some other Southeast Asian countries, we think the economics are really challenging,” Bhashyam said.
Shrieve Acquires TLC Ingredients
Chemicals distributor Shrieve Chemical Co., The Woodlands, Texas, a portfolio company of Gemspring Capital, Westport, Conn., on Jan. 8 announced that it has acquired TLC Ingredients (TLC), Crest Hill, Ill., a distributor of food ingredients, industrial chemicals, and phenolic resins. Terms of the transaction were not disclosed.
Shrieve said the acquisition of TLC, which has a facility in the Midwest, expands Shrieve’s presence in the region and enhances the company’s ability to serve the growing food ingredients end-market. Additionally, it positions Shrieve to leverage its existing product lines to serve TLC’s high-growth specialty industrial customers who have relied on TLC, which was founded in 2001, as a supplier of Durez phenolic resins for more than two decades.
“I am thrilled to welcome TLC Ingredients to the Shrieve Chemical family,” said George Fuller, Shrieve CEO. “This acquisition underscores our commitment to excellence and focus on long-term growth as we look to thoughtfully increase our presence and the value-added services we can provide across the country.”
“The TLC team has built an exceptional business with an industry-leading distribution facility, long-standing supplier relationships, and a broad product offering that serves several attractive global end-markets,” Fuller continued. “TLC’s expertise, innovative approach, and customer focus aligns very well with our broader strategic vision. Together, we look forward to delivering enhanced value to our customers and supplier partners.”
DP World Inks Potash Contract with Canpotex
DP World (Canada) Inc., part of the Dubai-based global logistics and trade solutions provider DP World, announced on Jan. 9 that it has signed a five-year management contract with Canpotex for operations at Canpotex’s terminal in the port of Saint John, New Brunswick.
Under
the new agreement, DP World said it will be responsible for potash handling
from Canpotex’s railcars, storage, inventory management in the warehouse, and
loading ships destined for overseas markets. The existing Saint John team will
provide expertise and oversight to ensure the safe and environmentally sound
handling of Canpotex potash.
Canpotex’s Saint John dry bulk handling terminal has approximately 2 million mt
of annual throughput capacity and two storage facilities with a combined
storage capacity of around 210,000 mt, according to Canpotex’s website.
“The
Port of Saint John is an integral part of Canpotex’s supply chain,” said
Canpotex President and CEO Gordon McKenzie in the DP World media statement. “We
are proud to work with DP World to ensure Canadian potash reliably reaches our
customers overseas and help make global food security possible.”
Canpotex has a fleet of more than 8,000 railcars and access to three other
marine terminals in North America: Neptune Terminals in the port of Vancouver,
Portland Bulk Terminals LLC in the port of Portland, Ore., and Thunder Bay
Terminals in the port of Thunder Bay, Ont.