All posts by hlancey@bloomberg.net

Crops/Weather

California, Crops/Weather, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Eastern Cornbelt:

US Drought Monitor

After starting the week with temperatures in the mid-80s, much of the Eastern Cornbelt was bracing for a major cooldown by the weekend, with highs topping out in the 60s and low-70s. Weekend lows were expected in the mid-40s across the region.

Central Ohio received less than half of its normal precipitation from June through August, leaving about 75% of the state under some level of drought and nearly 43% dealing with severe drought conditions or worse. Central Ohio also experienced 31 days of 90-degree heat during that three-month period, well above the 14-day average.

USDA on Sept. 1 reported that 24% of the corn was mature in Illinois, compared with 12-14% in Indiana and Ohio and just 2% in Michigan. Good or excellent ratings were assigned to 68-71% of the corn and soybeans in Illinois, 68% in Indiana, 63-67% in Michigan, and 42-46% in Ohio.

Western Cornbelt:

The Western Cornbelt experienced mostly dry weather during the first week of September, though scattered showers were reported across Iowa later in the week. Cooler weather was on tap for Iowa and Nebraska as the week progressed, with highs expected to dip to the 60s and 70s by the weekend, down from the mid- to upper-80s.

Summer heat continued across Missouri, with highs touching the 90s as the week progressed. By the end of the week and into the weekend, however, highs were only expected to reach the 70s across much of the state.

Good or excellent ratings were assigned to 77% of the corn and soybeans in Iowa on Sept. 1, compared with 74-79% in Missouri and 67-68% in Nebraska. Fully 39% of Missouri’s corn was mature by that date, along with 23% of the acreage in Nebraska and 10% in Iowa.

Missouri’s rice crop and cotton were 69% and 59% good or excellent, respectively, with 15% of the rice crop harvested by Sept. 1. Nebraska’s sorghum crop was 78% good or excellent.

California:

Corn Wheat Soybean Index

Excessive heat warnings were in effect across California during the first week of September, with highs reaching 105-113 degrees in parts of Southern California and the mid-80s in San Francisco. Triple-digit highs were also common across the Sacramento Valley during the week, including Stockton, Chico, Redding, and Sacramento.

Numerous wildfires continued to burn in California in early September, including the Bear Fire, which was first reported on Sept. 2 and quickly spread to 1,400 acres due to 30-40 mph winds. The fire prompted mandatory evacuations from several Sierra Nevada communities during the week.

Crop conditions remained favorable as of Sept. 1, with 95% of the rice and 100% of the cotton rated as good or excellent in California.

Pacific Northwest:

Excessive heat warnings were in effect for western Oregon and southwestern Washington during the week, with triple-digit highs reported in multiple locations. In addition to the heat, a fire weather watch was posted for Portland, Ore., on Sept. 4 due to low humidity and 20 mph winds, with red flag fire warnings in effect for the Western Columbia River Gorge.

Cooler weather was reported across Montana early in the week, along with scattered thunderstorms, but highs in the 80s and 90s were once again in the weekend forecast for much of the state.

The harvest of small grains continued at a brisk pace in the Pacific Northwest. Washington growers had 86-87% of the spring wheat and barley in the bin by Sept. 1, compared with 77-81% in Idaho and 68-77% in Montana.

Western Canada:

Air quality warnings were in effect across Western Canada in early September due to smoke from multiple wildfires in the region. The haze was accompanied by high heat, with temperatures soaring over the 30-degree C mark across portions of Alberta and Saskatchewan during the week.

Manitoba’s harvest was 24% complete as of Sept. 2, according to the latest provincial crop report, while harvest progress in Saskatchewan and Alberta was rated at 25% and 20% complete, respectively.

Transportation

Arkansas River, Illinois River, Market Watch, Mississippi RIver, Ohio River, Transportation, U.S. Gulf

US Gulf:

Low water levels on the Lower Mississippi River triggered ongoing towing restrictions. Loading drafts for northbound tows were cut by 10-15% above New Orleans, La., while tow lengths were reduced by 5-10 barges, depending on vessel horsepower. The restrictions combined to delay average travel times by an estimated 24-72 hours, sources said.

Guidewall repairs at Bayou Sorrel Lock are scheduled through Oct. 30, blocking weekday travel from 7 a.m. to 4 p.m. Wait times were noted up to 12.5 hours at midweek, down from 31 hours at last report.

Repair work at Brazos Lock restricted Monday-Friday movements from 7 a.m. to 7 p.m. Tows were delayed up to 5.5 hours, according to Corps data. The project is slated to run through October.

Harvey Lock has been mostly shut since Aug. 19 due to reverse head conditions, sources said. No tows have locked through the site since Aug. 27, according to Corps data.

Intermittent 5-17 hour delays were noted at Port Allen Lock during the week, while a handful of 5-9 hour waits were reported at Industrial Lock. Wait times ran up to 15 hours at Algiers Lock, and sporadic 7-22 hour delays were observed at Colorado Lock.

Mississippi River:

Towing restrictions continued during the week due to low water levels below Cairo, Ill. Northbound tows saw loading drafts reduced by 10-15%, while southbound loading drafts were slashed by 15-20% between Cairo and Rosedale, Miss. Tows moving downriver faced draft reductions of 10-15% from Rosedale to New Orleans. Tow lengths were reduced by 5-10 barges, depending on vessel horsepower, contributing to delay estimates in the 24-72 hour range, sources said.

The river gauge at Vicksburg, Miss., was posted at 5.8 feet and falling on Sept. 4. Forecasts predicted a fall below the 5.0-foot low stage on Sept. 11. The St. Louis gauge, noted at 3.5 feet at midweek, was expected to recede to 1.6 feet by Sept. 18, and the gauge at Memphis, Tenn., was reported at a low-stage (-)6.2 feet and falling on Sept. 4.

Rock placement underway at Mile 759 will limit southbound travel from 7 a.m. to 7 p.m. daily through approximately Sept. 18. Pipeline removal at Mile 158 projected to run through Sept. 24 is unlikely to majorly impact navigation, though intermittent slowdowns were anticipated.

Revetment projects at Miles 775 and 908 blocked southbound travel during the daytime on Sept. 1-5. Intermittent 4-6 hour waits were noted at Lock 27 during the week. Excessive rainfall triggered a flood watch at New Orleans and Baton Rouge, La., on Sept. 4.

With the upper Mississippi due to close December through March 2025 for the winter navigation season, most tows loading from NOLA will begin final releases in October, sources said. Many tows headed between Dubuque, Iowa, and St. Paul, Minn., will release from NOLA during the first week of October, while barges destined for ports between St. Louis and Clinton, Iowa., will continue departures through the third week of October.

Illinois River:        

Maximum loading drafts were reported at 9.5 feet for Miles 1-231 and 9.0 feet above Mile 231. Lockport Lock is scheduled to close from Jan. 14 to March 11, 2025, for vertical lift gate installation, blocking travel to and from the Chicago, Ill., area. The lock is located at Mile 291.

Ohio River:

Loading drafts remained limited on the Ohio River, sources said. Drafts were restricted to 10-10.5 feet, depending on location and direction of travel, down 5-10% from normal levels. Tow lengths were permitted up to 15 barges for the full length of the river.

The main chamber at Markland Lock will shut for 19 hours daily between Sept. 8 and Oct. 6, forcing detours through the secondary chamber. McAlpine Lock is closed to southbound lockages between 7 a.m. and 7 p.m. through Nov. 30, with intermittent waits noted up to 10 hours.

The Hannibal Lock primary chamber is offline through Nov. 8 for miter gate repairs, sources said, triggering delays up to 15 hours, rising from eight hours at last report. Belleville Lock will undergo a round of 30-day main and auxiliary chamber closures before the end of the year.

Delays were reported in the 5-20 hour range at Kentucky Lock, on the Tennessee River. Tows waited up to 32 hours to pass Wilson Lock.

Arkansas River:

The Van Buren Bridge at Mile 300.8 of the Arkansas River is closed for repairs through Sept. 8. Tows were reportedly able to pass during lift tests after the ninth day of work, and shuttle barges are free to transit the area whenever the channel is free of equipment.

Webbers Falls Lock is closed through Sept. 8 for miter gate inspections.

Canadian Railways Restart; Union Threatens Appeal

Canada, Featured

Following a request from Labor Minister Steven MacKinnon, the Canada Industrial Relations Board (CIRB) on Aug. 24 ordered more than 9,000 members of the Teamsters Canada Rail Conference (TCRC) to get back on the job at Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC).

“The board has concluded that, in this case, it has no discretion or ability to refuse to implement, in whole or in part, the minister’s directions or modify their terms,” the CIRB said in its decision, signed on behalf of Chairwoman Ginette Brazeau. The decision was unanimous.

The TCRC announced on Aug. 24 that it will “lawfully comply” with the decision, but a strike notice remained in effect at CN for 10 a.m. on Aug.26 and the union said it plans to appeal the decision to the Federal Court.

“This decision by the CIRB sets a dangerous precedent. It signals to Corporate Canada that large companies need only stop their operations for a few hours, inflict short-term economic pain, and the federal government will step in to break a union. The rights of Canadian workers have been significantly diminished today,” said TCRC President Paul Boucher.

“Rest assured, we will be challenging these rulings in court,” Boucher added. Union members said they would protest on Aug. 27 outside of a Liberal Party of Canada Laurier Club fundraiser in Halifax, which Prime Minister Justin Trudeau was scheduled to attend.

CN trains started rolling again on Aug. 23, one day after the lockout, and CPKC expected operations to commence early on Aug. 26. The CIRB directed all parties to attend a meeting on Aug. 29 about the implementation of the arbitration process.

CN said in a news release that it is “satisfied that this order effectively ends the unpredictability that has been negatively impacting supply chains for months.” The company stressed that the CIRB has also ordered that no further work stoppages, including a lockout or strike, can occur during the arbitration process.

“This means that the strike notice recently issued to CN by the Teamsters is now voided,” the railroad said. “CN will comply with the order which also extends the current collective agreement until a new agreement is signed between the parties.”

CPKC said in an Aug. 24 statement that it was “executing its restart plan for the safe and orderly resumption of rail service across Canada,” and “working with customers on a balanced return to normal operations.”

 “The CIRB order ends months of unnecessary uncertainty and disruption for the Canadian economy and North American supply chains,” CPKC added. “We anticipate it will take several weeks for the railway network to fully recover from this work stoppage and a period of time beyond that for supply chains to stabilize.”

Nutrien Opens Greenfield Fertilizer Terminal in Minnesota

Featured, Nitrogen, Phosphate, Potash, U.S.

Nutrien Ltd. on Aug. 22 celebrated the grand opening of a new greenfield fertilizer terminal in Randolph, Minn., approximately 13 miles south of Minneapolis, Minn.

The 40,000-square-foot warehouse offers approximately 20,000 mt of dry fertilizer storage for nitrogen, phosphates, and potash, has capacity for roughly 65 railcars on site, and features a TerminalBoss automated scale to improve access and efficiency for customers and growers.

“Nutrien has an unparalleled network of distribution assets to safely and reliably deliver the crop nutrients our customers need, where and when they need them,” said Mark Thompson, EVP and Chief Commercial Officer. “This investment in our new Randolph terminal is consistent with our strategy to continue strengthening the cost-position and efficiency of our North American distribution footprint, competitively positioning us to meet the evolving needs of the market for decades to come.”

Nutrien said the new site will significantly reduce cost-to-serve for the company’s upstream business in an important agricultural market by providing dedicated in-market storage and additional flexibility.

“We are excited to continue enhancing the strength of our network through targeted investments, just as we did with the Hammond, Ind., potash distribution facility that opened its doors in 2016,” said Elan Strueby, Vice President, Transportation, Distribution & Logistics. “Once up and running at full capacity, we expect over 65,000 tonnes of product to move through the Randolph terminal annually.”

USDA Announces Latest FPEP Grant Recipients; AdvanSix to Get Nearly $12 Million

Ammonium Sulfate, Featured, U.S.

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack on Aug. 28 announced that the department is awarding another $35 million through the Fertilizer Production Expansion Program (FPEP) to seven projects in seven states, with ammonium sulfate producer AdvanSix among the list of new recipients.

The FPEP is funded by the Commodity Credit Corp. and provides grants to independent business owners to help them modernize equipment, adopt new technologies, build production plants, and more.

“The Biden-Harris Administration continues to make innovative investments that bolster rural communities and support farmers, ranchers and small business owners,” Vilsack said at the annual Farm Progress Show in Boone, Iowa. “The investments announced today will increase domestic fertilizer production and strengthen our supply chain, while creating good-paying jobs to benefit all Americans.”

USDA said AdvanSix will get an almost $12 million grant to expand its operational capacity in Virginia by 195,000 st/y, allowing the company to increase its fertilizer supply to 36,000 producers from the current 31,400 on the East Coast and in the Midwest.

Dramm Corp. in Wisconsin is another new recipient, which will use a $776,000 grant to increase production capacity and expand their network for liquid fertilizer made from fish offal collected from commercial and sport fishermen.

USDA is also making awards to facilities in California, Iowa, New York, Oregon, and Tennessee. This installment of FPEP grants is just the latest, with the USDA to date having invested $286.6 million in 64 projects across 32 states through FPEP. The most recent included an award of $83 million in May to 17 projects in 12 states (GM May 31, p. 1).

USDA said the projects funded by FPEP have created 768 new jobs in communities across the country and will increase domestic fertilizer production by over 5.6 million tons.

Panama Canal Lifts Shipping Restrictions as Water Levels Normalize

Asia, Featured, Natural Gas, U.S.

The Panama Canal is lifting restrictions that caused a global shipping bottleneck as water levels normalize after a severe drought (GM Aug. 25, 2023), Bloomberg reported on Aug. 27.

The Panama Canal Authority (PCA) increased the draft in the waterway to a maximum 50 feet and will allow 36 vessels a day to transit after recent rains lifted water levels at an artificial lake that forms part of the canal system, PCA Administrator Ricaurte Vasquez told reporters on Aug. 26. The agency expects rains to continue through November, further lifting water levels, he said.

The canal handles about 3% of global maritime trade volumes under normal circumstances, and 46% of containers moving from Northeast Asia to the US East Coast. The channel is Panama’s biggest source of revenue, bringing in nearly $5 billion last year.

About 30-32 vessels are currently transiting the waterway, below pre-drought capacity. The canal restricted daily transits to as few as 24 at the height of the drought (GM Nov. 23, 2023). Vasquez said it will take 5-6 months for shippers to return in full. Rainfall is expected to lift Lake Gatun’s water levels to 88 feet by November from current levels of around 85.8 feet, he said.

Last year’s El Niño caused a significant drop in rainfall and forced the canal to implement daily transit restrictions for the first time in history. The PCA even held auctions in which shippers could bid for transit slots. Some shippers, especially time-sensitive vessels carrying liquefied natural gas and liquefied petroleum gas, opted for alternative routes.

Recently, vessels have been arriving at the canal with larger cargo volumes, allowing the authority to cut water usage while keeping tonnage stable, Vasquez said. He said the PCA will work with shippers to ensure ships arrive at the canal with the maximum cargo possible.

The agency may need to implement seasonal draft restrictions during the 2025 dry season, which is typically in the first half of the year, but will seek to avoid using daily transit restrictions, he noted.

The canal is studying the possibility of opening up long-term reservation slots for more time-sensitive users such as LNG and LPG shippers to guarantee greater certainty and help vessels reach destinations without delay, Vasquez said. He said the PCA will meet with LNG and LPG market participants in September to discuss the proposal.

The PCA expects another El Niño-driven drought within the next four years, Vasquez said. The weather phenomenon reduces rainfall over the Panama watershed and decreases water levels at Lake Gatun, the main source of water for the canal and a source of drinking water for about half of the country’s population. The canal isn’t expecting to have new infrastructure before the next major drought, he said.

The PCA is studying building a dam on Rio Indio about 40 miles west of Panama City to boost its water supply, and is currently in talks with community members there who would have to be relocated. Vasquez said these conversations will likely take 18-24 months. If the project moves forward, construction would require an additional four years and cost roughly $2 billion.

Copper Boosts BHP’s Annual Profits, Revenue; Jansen Potash Project Finalizing Infrastructure

Featured, Indonesia, Potash, Saskatchewan

Melbourne-based BHP Group Ltd. will focus on boosting returns from its burgeoning copper portfolio, the world’s biggest miner reported at its fourth-quarter and full-year earnings release on Aug. 27, as it bets long-term gains for the crucial new-energy metal will help offset declining returns from iron ore as Chinese demand cools.

CEO Mike Henry announced full-year profit broadly in line with market expectations and highlighted the mining giant’s efforts to double down on its own projects and mines. Underlying attributable profit came in at $13.66 billion for the year through June, up 2% from the year earlier and just above analysts’ estimate of $13.49 billion. The company’s share price rose as much as 2.7% in Sydney following the earnings release.

BHP’s overall revenue rose 3%. Higher sales volumes and relatively strong prices for iron ore and copper were partially offset by lower coal prices and a crash in nickel, caused by a surge of cheap Indonesian material that ultimately prompted the miner to shutter its Nickel West business. 

Potash may prove another bright spot for BHP. Its $14 billion Jansen potash mine in Saskatchewan is expected to produce 4.15 million mt/y, with first production targeted for the end of calendar year 2026. BHP in July reported that its Jansen Stage 1 (JS1) project remains ahead of schedule and is now 52% complete (GM July 19, p. 27). Jansen Stage 2, which reached final approval in October 2023, is now 2% complete and expected to be up in fiscal year 2029.

“Reaching the halfway milestone for JS1 is a testament to the dedication of our Team Jansen workforce, our contractors and procurement partners, and the local and Indigenous communities surrounding the Jansen area,” Karina Gistelinck, BHP’s Asset President Potash, said in July.

“Building one of the largest potash mines in the world requires an all-hands-on-deck approach, and the province has really come together to make a project of this magnitude possible,” Gistelinck added. “Delivering Jansen safely remains our top priority as we get ready for Jansen operations in 2026.” 

BHP said the focus at JS1 is now on the completion of the mill building and processing plant, port construction, finalizing infrastructure, and gearing up to handover the project to operations.

The company reported that it spent $9.3 billion in capital and exploration for the full year, up 31% from the year before. It aims to expand that spending to $11 billion by fiscal 2026, with two-thirds of the amount on copper and potash.

Henry also addressed BHP’s failed bid to acquire Anglo American Plc for $49 billion (GM May 31, p. 1). “The Plan A for BHP was never about acquisitions and it wasn’t about that specific opportunity,” Henry told Bloomberg Television, when asked if the company could revive its Anglo bid. “It was about everything that you see in this set of results, which is focusing – first and foremost – on ensuring that we’re getting the most out of our capital.”

BHP said it will pay a final dividend of 74 cents per share, compared with 80 cents a year ago.

Topsoe Launches Green Ammonia Plant in Denmark

Ammonia, Clean Ammonia, Denmark, Green Ammonia, Low-Carbon

Denmark-based Topsoe announced that it has inaugurated its green ammonia facility in Ramme, Denmark. The facility, which is a partnership of Topsoe, Skovgaard Energy, and Vestas, is expected to demonstrate how renewable power fluctuations can be managed in a production facility while producing ammonia in a cost-effective manner.

The 5,000 mt/y green ammonia demonstration project secured $12 million in funding from the Danish Energy Technology Development and Demonstration Programme. It will receive power from 50 MW existing solar panels and from 12 MW newly installed wind turbines supplied by Vestas. 

“With this new facility, we are taking an important step, which will benefit both Denmark and the rest of the world,” said Kim Hedegaard, CEO Power-to-X at Topsoe. “We need to continue the development of green alternatives for energy-intensive industries and long-distance transportation with research, innovation, and action. This project is a unique example of going from good intentions to actively supporting the energy transition.”

Topsoe has made several recent moves in the low-carbon space. It recently announced that it was awarded a contract to support the Front End Engineering Design study for a low-carbon ammonia plant for CF Industries in Louisiana in collaboration with Mitsui (GM May 3, p. 27). In February Topsoe reported signing an agreement with South Korea’s Approtium to convert low-carbon ammonia into hydrogen using ammonia cracking technology (GM Feb 23, p. 35).

Wärtsilä Partners on Ammonia-Fueled Platform

Ammonia, Clean Ammonia, Finland, Green Ammonia, Low-Carbon

Finnish technology group Wärtsilä has announced a partnership with Norwegian shipbuilder Eidesvik to convert an offshore platform supply vessel to operate with ammonia fuel. The vessel is called Viking Energy and it is currently on contract to Norwegian energy company Equinor.

Equinor is contributing to the financing of the conversion, which is scheduled for 2026. As part of the project, Wärtsilä will supply the engine, fuel gas supply system, and exhaust system, making it the first vessel to use Wärtsilä’s recently released 4-stroke ammonia engine.

“In just 25 years – the lifetime of a single vessel – shipping needs to get to net zero emissions. Achieving this will require coordinated action by all maritime industry stakeholders to bring about the system change needed to accept a new generation of sustainable fuels,” said Håkan Agnevall, President and CEO of Wärtsilä.

“With this new contract, together with Eidesvik, Wärtsilä is proud to be at the forefront of this movement,” Agnevall added. “Decarbonization is front and center of our strategy and we are committed to developing and delivering sustainable solutions which not only ensure the viability of sustainable fuels, but also their safety.”

Wärtsilä recently announced a partnership with Italian company Gas and Heat and RINA to develop an ammonia-fueled bunkering vessel that will deliver and operate on green ammonia fuel (GM June 7, p. 25).

Sembcorp Breaks Ground on Green Ammonia Plant

Asia, Clean Ammonia, Green Ammonia, India, Japan, Low-Carbon

Singapore-based Sembcorp Industries has laid the foundation stone to begin construction of a green ammonia facility in the port city of Tuticorin, Tamil Nadu, in India. The plant, which is located on 160 acres, is expected to produce 200,000 mt/y of green ammonia. The project is projected to cost $4.3 billion and generate roughly 1,500 local jobs.

The initiation of construction builds on an earlier Heads of Terms agreement signed by Sembcorp, Sojitz Corp., Kyushu Electric Power, and NYK Line to export green ammonia from India to Japan (GM Aug. 23, p. 25). As part of that agreement, Sembcorp will produce green ammonia that Kyushu incorporates into its power plants in Japan. Sojitz will act as a business intermediary while NYK Line oversees the maritime transportation of the green ammonia.

Sembcorp was recently named as one of two leads for the Energy Market Authority and Maritime and Port Authority of Singapore low-carbon ammonia solution project for power generation and bunkering on Jurong Island (GM Aug. 2, p. 24).