Eastern Canada:
The SOP Magnesia market in Eastern Canada appeared to be moving higher, with new spring offers reported at C$960-$995/mt FOB in the region, up from the last confirmed range of C$910-$975/mt FOB.
All posts by mickeybarb@charter.net
Potassium Thiosulfate
Eastern Cornbelt:
Potassium thiosulfate pricing was unchanged at $750/st FOB Terre Haute for the most recent offers.
Crops/Weather
Eastern Cornbelt:
After some wet snow over the Easter weekend, temperatures gradually warmed across much of Illinois during the week. While spotty showers continued to delay fieldwork in most of the state, temperatures reached the 70s in central Illinois on April 21-22, with weekend highs expected to tip into the low-80s.
Similar conditions were reported in Indiana, where temperatures rose from the low-40s to the mid-60s by midweek, and frequent showers kept planters on the sidelines. Weekend temperatures were expected to soar into the 70s and 80s across the state, but a return to cool, wet weather was in the forecast for the following week.
Scattered rain and gusty winds were reported across Ohio during the week, but temperatures reached the mid-60s on April 21-22, and were expected to approach the 80s by the weekend.
Growers had yet to register any progress on the planting of corn or soybeans as of April 17, while oats planting had progressed to 16 percent complete in Ohio, well behind the 29 percent five-year average.
“Everything is still at a standstill,” said one Ohio contact on April 21. “We do have warm temps forecast over the weekend, but rain is coming on Monday again and then a cool down after that. It appears this year will be a very compressed season. I guess we will test logistics from all angles. I am starting to get frustrated knowing the workload we have ahead of us.”
Western Cornbelt:
Parts of Nebraska and Iowa saw dense fog and periods of rain during the week, along with gusty winds. A round of potentially severe thunderstorms was possible in eastern Nebraska and western Iowa late in the week, followed by much warmer weekend temperatures, with highs jumping to the low-80s in some locations.
Isolated thunderstorms were also reported in Missouri as the week progressed, along with 30-40 mph wind gusts and 70-degree temperatures. Another round of wet weather was expected for parts of the state over the weekend.
Corn planting as of April 17 was reported at 4 percent complete in Missouri and 2 percent in Nebraska, while Iowa growers had yet to register any progress. Oats planting by that date had progressed to 29 percent complete in Iowa and 58 percent in Nebraska.
Northern Plains:
Wet, snowy conditions delayed fieldwork across much of the Northern Plains during the week, but the moisture was needed in many areas. While northern Minnesota was blanketed with 3-5 inches of snow at midweek, widespread rain was reported across the southern half of the state, with highs topping out in the mid-40s in Minneapolis.
After a snowy Easter weekend in parts of North Dakota, another system was taking aim at the region for the coming weekend. Forecasts warned of potentially severe weather in the Dakotas as warmer air collides with a cold front from Canada, with the possibility of another round of snow and ice by the weekend.
“It’s cold and wet, with more coming this weekend,” said one Dakota contact at midweek. Added another contact: “There’s not a lot of enthusiasm for buying right now when the western half of North Dakota is still looking at 15-35 inches of snow out their windows.”
Just 1 percent of the oat crop was seeded in Minnesota by April 17, and growers had yet to register any progress on spring wheat and barley planting. South Dakota, by contrast, had 25 percent of the spring wheat and 27 percent of the oat crop planted, while North Dakota growers were able to seed 3 percent of the spring wheat and just 1 percent of the barley crop by that date.
Sources reported a little fertilizer application happening in southwestern North Dakota before the recent moisture, and most were expecting the pace to be “fast and furious” when fields dry out and open up.
Northeast:
A powerful storm brought heavy rain, snow, and wind to parts of the Northeast early in the week, causing more than 200,000 homes and businesses in New York to lose power on April 19. The system dropped more than 14 inches of snow in Binghamton, N.Y., prompting a state of emergency and travel ban in Broome County.
Harrisburg and Williamsport, Pa., both received about three inches of snow, with roughly 54,000 power outages reported in Pennsylvania on April 19. Heavy rain and 40-60 mph winds across New England caused 22,000 power outages in Maine, 17,000 in Vermont, and 11,000 in New Hampshire.
The system also sparked rain across the Mid-Atlantic region, with most of Maryland collecting nearly an inch of precipitation. Conditions across the region improved considerably after the storm, however, with highs climbing to the 60s and 70s late in the week.
Pennsylvania growers had 2 percent of the corn crop planted by April 17, along with 11 percent of the oats. “Fieldwork has been stop-and-go, but mostly stop,” commented one regional contact.
“The early forage crops like rye are just starting to be harvested,” said another source. “I expect with the weather forecast showing nice the rest of the week, we will see a lot of rye laying in the fields. And after that, corn planting will start.”
Eastern Canada:
Snow and rain limited spring fieldwork across much of Eastern Canada during the week. A winter weather travel advisory was in effect for most of southern Ontario on April 18-19, with 4-8 cm of snow reported in Toronto and up to 10 cm in other locations.
The storm also hit southern Quebec, with 6-8 cm of snow reported in the Montreal region. Severe weather moved into the Maritimes at midweek, bringing 30-55 mm of rain that triggered flash floods warnings in some locations. The system also produced 70-90 km/h wind gusts in Nova Scotia, along with heavy rain in southern New Brunswick.
Sources said the cold, wet weather has delayed spring field activities in the region. “Things are cool and wet in Ontario,” said one source. “Most of the province had over 5 cm of snow on Monday.” One contact said some fields in southern Ontario may be “fit for planting” in a matter of days if the moisture quickly subsides, however.
“A bit of wheat topdressing started in the southwestern part of the province late last week, but the snow stopped that,” added another contact. “They should be able to get at it within a few days, and once done with that they will move straight into corn.”
Despite lingering concerns about fertilizer supplies in Eastern Canada due to Canada’s decision to impose tariffs on imports from Russia, sources expressed few doubts about spring demand. “I think many will continue with their crop plans,” said one contact. “If the wet weather continues into May there will be an adjustment, but we are still a long way off from that decision.”
Another source said there “seems to be a strong demand for nitrogen on corn with the current corn prices.” He added that growers might “back off a bit on phosphates and potash, but that remains to be seen.”
Transportation
U.S. Gulf:
Rising river levels at New Orleans were expected to push the gauge above the 12-foot mark on April 26, according to forecasts from the National Weather Service. Towing restrictions take effect when NOLA levels reach 12 feet. The gauge at New Orleans was observed at 11.14 feet on April 19.
Calcasieu Lock daytime travel restrictions initiated on March 22 were noted blocking daytime travel on Monday through Thursday, between 7:00 a.m. and 6:00 p.m. Work at the site was expected to run through May 19.
Daytime Brazos Lock travel interruptions continued to produce locking delays up to 20 hours on April 19. Shutdowns had been running Monday through Friday, 7:00 a.m. to 5:00 p.m.
Bayou Sorrel Bridge repairs limited weekday daytime navigation through the lock, and are set to continue to the end of May. Monday-through-Friday shutdowns were expected from 7:00 a.m. to 11:00 a.m., and again from 1:00 p.m. through 5:00 p.m., while 24-hour navigation resumed on Saturdays and Sundays.
Bayou Sorrel Lock is slated to experience weekday delays due to an ongoing guidewall replacement project scheduled to run into February 2023. Waiting was observed in a wide 5-25 hour range during the week, rising from 5-11 hours in the prior report.
Vessel navigation through Bayou Chene continued to be unavailable during overnight hours due to floodgate construction, according to a Coast Guard posting. Navigation was possible during daytime hours up to 600 feet of length, while widths were capped at 54 feet. Delays were expected in the 6-12 hour range.
Shoaling continued to be reported at Miles 113-116 of the Atchafalaya River, triggering 10-foot draft limits through the area. Tows were also limited to a maximum 600 feet of length, while lengths above 400 feet were encouraged to travel with industry assistance. Width limits were set at 70 feet. Tows could bypass the restrictions by running through the Port Allen Route.
Tows traveling without an assist vessel continued to face length and width restrictions at Algiers Lock, effectively limiting passages to four standard barges or two 30,000 mt tankers per lockage. Larger passes were required to use an assist tug. While most delays were counted in the 4-7 hour range for the week, intermittent 19-22 hour waits were also reported.
Belle Chasse Bridge construction continued to trigger intermittent travel delays lasting up to 12 hours at a time. Construction at the site is scheduled to conclude late in 2022.
Port Allen Lock delays were seen up to seven hours for the week. Corps data revealed Industrial Lock waits in a wide 8-27 hour range, while Colorado Lock waits were noted up to seven hours.
Mississippi River:
High water levels on the lower Mississippi River extended travel restrictions below St. Louis, sources said. Barge counts were reduced due to the conditions, while larger tows traveling in the southbound direction were said to limit bridge passes to daylight hours in some urban areas, determined on a case-by-case basis.
The river gauge at Vicksburg was on the rise for the week, showing at an action-stage 37.96 feet on April 20. Levels were projected to peak at 40.1 feet on April 24-25, just shy of the 43-foot minor-flood stage, but were expected to remain above action stage through at least May 3.
The Baton Rouge, La., gauge was clocked at 31.33 feet and rising on April 20. Levels were predicted to crest at 34.4 feet on April 27, below the 35-foot minor-flood stage.
Channel reinforcement work at Mile 807 on the lower river will begin on May 10. The project will run for approximately 30 days, narrowed from previous estimates up to three months. Southbound traffic is expected to be blocked daily from 6:00 a.m. to 6:00 p.m. while work is underway.
Illinois River:
Wet weather continued to complicate navigation on the Illinois River during the week, although substantial improvements were reported.
River levels were observed holding below the 46.1-foot action stage at Ottawa, while the river gauge at Peoria fell below the area’s 17-foot action stage on April 18, landing at 16.22 feet and falling steadily on April 20.
The LaGrange river gauge remained above the 21-foot action stage, however, showing a 21.68 feet reading and falling on April 20. Forecasts predicted area depths to drop out of action stage on April 22.
A significant repair and maintenance project scheduled at Brandon Road Lock is expected to limit navigation from May 9 through Sept. 8, according to a Corps posting. Travel will be limited to overnight hours and subject to 70-foot width restrictions from May 9 to Aug. 14, followed by a complete shutdown of the lock between Aug. 15 and Sept. 4.
Overnight lockages with width restrictions will resume on Sept. 5-8, after which normal operation is scheduled to return on Sept. 9. Sources have predicted substantial delays through the entirety of the Brandon Road Lock operation.
Marseilles Lock delays were noted up to 12 hours during the week. Wickets remained down at both Peoria Lock and LaGrange Lock due to high water, allowing tows to pass without locking.
Ohio River:
Repairs and maintenance scheduled to run from May 1 through June 29 at Belleville Lock will close the main chamber to navigation, forcing detours through the secondary chamber, with delays expected. The Corps announced an accompanying shutdown at Greenup Lock for the same May 1-June 29 period, with similar delays predicted.
Navigation remained unavailable at Cannelton Lock during the daytime on Wednesdays and Thursdays, with the restrictions slated to continue through May 26 due to a repair project that began on Jan. 26. An additional maintenance project proposed for July 5 through Nov. 11 would also limit main chamber availability.
An Emsworth Lock main chamber shutdown that kicked off on Feb. 22 was reported to conclude on April 14, two days ahead of schedule. Delays at the site had previously been reported running up to six days, but were fully dissipated by April 20.
Proposed main chamber maintenance at Hannibal Lock would likely run from July 5 through Oct. 8, limiting navigation to the secondary chamber. Cannelton Lock delays were noted up to seven hours during the week
Main chamber work underway at the Tennessee River’s Wilson Lock, located at Mile 259.4, is scheduled to conclude on April 28. Tows have been routed through the site’s smaller secondary chamber while work is underway, resulting in 3-6 day delays for the week.
Kentucky Lock delays were reported in a wide 5-18 hour range, falling from 9-24 hours during the previous week.
Miter gate machinery repairs scheduled for the Cumberland River’s Cheatham Lock are expected to complicate navigation between May 16 and Aug. 5. The site is expected to undergo a repeating series of 11-day shutdowns, followed by three days of open navigation, with significant delays predicted.
Arkansas River:
A maintenance project scheduled for Norrell Lock will close the site to travel daily between 7:00 a.m. and 7:00 p.m. during a series of 10-day shutdowns, scheduled to continue into January 2023. The closures were tentatively set for June 1-11; June 22-July 21; Aug. 1-10; Aug. 21-Sept. 21; Sept. 3-Oct. 9; Oct. 20-Nov. 18; Nov. 29-Dec. 23; and Jan. 3-31, 2023.
Gensource Buys Innovare Technologies for US$11.5 M
Junior producer Gensource Potash Corp., Saskatoon, reported on April 13 that it has reached a binding agreement to acquire 100 percent of the issued and outstanding shares of Innovare Technologies Ltd., London, a privately-held developer of patented selective solution mining and brine processing technology for the recovery of potash and other soluble minerals. The closing of the transaction, which is expected in second-quarter 2022, values Innovare at US$11.5 million.
“Gensource’s acquisition of Innovare’s shares and the integration of Innovare’s business with our own will provide Gensource with exclusive use and control of Innovare’s unique and highly sought-after selective solution mining and brine processing technology for potash development, without which the environmental benefits of modern potash production would be extremely challenging to replicate,” said Mike Ferguson, Gensource President & CEO. “The acquisition will place the company in a strong competitive position in an industry dominated by producing facilities based on conventional 1950s and older technology.”
The acquisition of Innovare’s shares will occur by way of a reorganization, whereby Innovare’s existing shareholders will transfer the shares they hold in Innovare to Gensource in exchange for new common shares of Gensource. Following completion of the reorganization, Innovare will exist as a wholly-owned subsidiary of Gensource, and Innovare’s business will be integrated with and controlled by Gensource.
Gensource has worked with Innovare over the last six years in the development of Gensource’s modular potash production module. The company’s potash project located near Tugaske, Sask., will be the first project to implement a Gensource module.
The former owners of Innovare include the corporate vehicles of the three principals, being Artisan Consulting Services Ltd, McEwan Consulting Chemical Engineering, Inc., and Ristra Consulting Inc. Gensource said the three have a combined 100+ years of industry-specific experience and have successfully developed potash projects in Saskatchewan, including being part of what is now known as K+S AG’s Bethune Mine, north of Moose Jaw, Sask.
Austin Powder Agrees to Improve Wastewater Treatment, Pay $2.3 M Civil Penalty
Austin Powder Co., Cleveland, Ohio, owner and operator of the Red Diamond explosives manufacturing plant located near McArthur, Ohio, last month agreed to implement significant upgrades to that facility’s wastewater treatment operations to resolve Clean Water Act violations and to also pay a civil penalty of $2.3 million, according to the U.S. Department of Justice.
The complaint, filed contemporaneously with the settlement, alleges that since 2013 the facility has had hundreds of discharges of pollutants in violation of the effluent limitations in its permits and failed to fully comply with an earlier EPA Administrative Order on Consent that sought to resolve these concerns.
“Industrial dischargers must ensure their operations do not foul our nation’s waters,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division. “The improvements required by this settlement will greatly improve Austin Powder’s compliance with its permits and improve the health of the Ohio River and its tributaries.”
“This settlement will prevent tens of thousands of pounds of pollutants from entering Ohio streams and rivers each year,” said Acting Assistant Administrator Larry Starfield for EPA’s Office of Enforcement and Compliance Assurance. “Ohio communities will benefit from cleaner water and a healthier environment.”
Under the proposed settlement, Austin Powder will invest approximately $3 million to improve two of its wastewater treatment plants, including implementing comprehensive operation and maintenance plans. The company has already eliminated discharges from four other onsite plants, and under the consent decree will eliminate discharges from a fifth plant. These improvements will be completed on or before Dec. 31.
This agreement will improve water quality in the tributaries of Raccoon Creek and Elk Fork, both of which are tributaries to the Ohio River. Implementing the consent decree will reduce pollutants discharged from the plant into these two water bodies by approximately 84,000 pounds annually.
Nutrien 1Q Results Expected to Soar
Nutrien Ltd.’s first-quarter net income is expected to soar at least ten times to $1.48 billion compared to the year-ago $133 million, according to the Bloomberg Consensus, which averages the projections from major analytical firms. The actual range given by analysts was $1.26-$1.76 billion.
Higher prices are expected to boost net sales to $7.48 billion ($6.25-$8.81 billion) from the year-ago $4.6 billion.
Adjusted EBITDA is forecast at $2.675 billion, up from the year-ago $806 million. The analyst range was $2.30-$3.01 billion.
Nutrien’s first-quarter results are expected to be released after markets close on May 2.
Koch Collaborates with Thrive
Koch Agronomic Services LLC (Koch), Wichita, on April 11 announced an agreement to collaborate with Silicon Valley-based SVG Ventures | Thrive, leveraging its Venture & Innovation Platform.
“Koch is excited to work with Thrive and access its expansive pipeline of innovative organizations and technologies,” said Steve Coulter, Senior Vice President of Koch Agronomic Services. “Thrive offers a capability and reach within the crop nutrient space that will help accelerate our strategy of identifying new technologies in order to create long-term value for our retail customers and growers.”
“Our engagement with Koch Agronomic Services focuses on identifying start-ups that are ready for scale and commercial impact,” said John Hartnett, Founder and CEO, SVG Ventures | Thrive. “By connecting Koch to start-ups, we can identify companies that align with Koch’s goals and increase investment flow.”
“Now more than ever, Koch is focused on growth in plant nutrition categories,” said Coulter. “For us, this means finding new collaborators who have developed technologies and are exploring the best structures to bring those technologies into our portfolio either through licensing, equity investment, full acquisition, or other arrangements. The great thing about Koch is we can be flexible.”
SVG Ventures | Thrive is a global agrifood investment and innovation platform comprised of agriculture, food and technology corporations, universities, and investors. With a community of over 5,000 startups from 100 countries, the platform invests, accelerates, and creates access for entrepreneurs to scale globally to solve the biggest challenges facing the food and agriculture industries.
SVG’s global partners include Media Partner Forbes and government, agriculture, and technology corporations such as Alberta Government, Old’s College, Calgary Economic Development, Corteva, Driscoll’s, FCC, BASF, Kubota, Land O’Lakes, Trimble, Taylor Farms, Bayer, ICL, Nutrien, Intel, Valmont, UFA, Yamaha Motor Ventures, and Wilbur-Ellis.
CF Impacted by UP Rail Delays, Shipping Reductions
CF Industries Holdings Inc., Deerfield, Ill., on April 14 informed customers it serves by Union Pacific (UP) rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season, and that it would be unable to accept new rail sales involving UP for the foreseeable future. CF said it understands that it is one of only 30 companies to face these restrictions.
CF ships to customers via UP primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas, and California.
Products that will be affected include urea, UAN, and diesel exhaust fluid (DEF). CF is the largest producer of those three products in North America, and the Donaldsonville Complex is the largest single production facility for the products in North America.
“The timing of this action by Union Pacific could not come at a worse time for farmers,” said Tony Will, CF President and CEO. “Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers.”
CF said UP informed it on April 8 of this decision, without advance notice that it was mandating certain shippers to reduce the volume of private cars on its railroad effective immediately. CF said it was told to reduce its shipments by nearly 20 percent.
CF believes it will still be able to fulfill delivery of product already contracted for rail shipment to UP destinations, albeit with likely delays. However, because UP has told CF that noncompliance will result in the embargo of its facilities by the railroad, CF may not have available shipping capacity to take new rail orders involving UP rail lines to meet late season demand for fertilizer.
CF said it intends to engage directly with the federal government to ask that fertilizer shipments be prioritized so that spring planting is not adversely impacted.
“CF Industries’ North American manufacturing network continues to produce at a high rate to meet the needs of customers, farmers, and consumers,” said Will. “We urge the federal government to take action to remove these Union Pacific rail shipment restrictions to ensure this vital fertilizer will be able to reach U.S. farmers when and where they need it.”
Both of the impacted facilities have the ability to truck shipments and one of the facilities can do barge sales, so the company will have alternative options, though they might be less attractive, said Alexis Maxwell, Green Markets Director of Research.
“Assuming that 20 percent of CF’s capacity at the impacted facilities moves by rail and CF reduces rail shipments by 20 percent in the second quarter, this would impact less than 1 percent of the company’s overall net production capacity,” added Maxwell. “CF’s stock price was up marginally on the news.”
UP said in a letter to customers that it would begin metering traffic after April 18 if customers don’t voluntarily reduce their inventory before then, according to Bloomberg. UP also said it is removing 2-3 percent of its own railcars and has added 50 locomotives since January, with plans to bring on 100 more to help move cars along.
“The operating inventory levels continue to rise on a daily basis,” Kenny Rocker, UP Sales and Marketing Chief, said in the letter published on the UP website April 11. “We have already identified and notified those customers who can help us manage the current congestion by reducing their railcar inventories.”
The industry has struggled with soaring freight since the pandemic drove higher demand for goods, choking the nation’s supply chain. The situation prompted the U.S. Surface Transportation Board to call public hearings later this month to hear from all the major railroads on steps to improve network fluidity, citing a broad worker shortage and railroads’ “bare bones” cost cutting.
“The railroads simply do not have a sufficient number of employees,” Board Chairman Martin Oberman said in a statement last week.
UP said in its letter that it has transferred 80 crew members to help in congested areas and has 450 employees in training that will be ready for locomotives in the summer.
The moves come after UP took steps last July to ease a backup in Chicago, where trailers weren’t being unloaded fast enough amid a crush of traffic. The company halted all containers at the time from Los Angeles to Chicago for about a week.
In a new statement, UP said the latest attempt to meter railcars will help it work through the backlog, echoing the “approach we successfully applied last year with West Coast intermodal traffic.”
K+S Raises FY22 EBITDA Guidance
K+S Group, Kassel, has raised the outlook for expected EBITDA for the 2022 financial year to €2.3-€2.6 billion (between approximately ($2.5-$2.8 billion at current exchange rates), up from the previous outlook for FY22 of between €1.6-€1.9 billion. It is K+S’ second upgrade to its FY22 guidance.
The company attributed the increased guidance mainly to a further rise in average prices in the Agriculture customer segment, which, it said, will “significantly outweigh” expected cost increases, particularly in energy, logistics, and materials.
This EBITDA forecast tangibly exceeds current market expectations, the company said, noting the Vara 2022 EBITDA consensus as of April 6, 2020, was €2.16 billion.
K+S said the expected EBITDA increase assumes unrestricted production during the rest of 2022, and possible interruptions in production caused by potential disruptions to energy supply – i.e., a gas shortage situation – to the company’s German sites are not taken into account.
Germany relies on Russia for a sizeable volume of its natural gas supplies. In 2020, the country relied on Russian gas for about 46 percent of its natural gas requirements, according to the International Energy Agency.
FY21 EBITDA came in at €969 million, a 262 increase on the previous year (GM March 11, p. 25). The FY21 result included a one-off gain of €219 million from the completion in December of the REKS waste management joint venture transaction (GM Dec. 31, 2021).
K+S also has raised its adjusted free cash flow (FCF) expectations for full-year 2022 to €1.0-€1.2 billion, assuming capital expenditures of “a good €400 million.” This compares to the company’s previous FCF outlook of around €600-€800 million, and to the Vara consensus as of April 6, 2022, of €949 million.
K+S noted that a one-off effect of around €230 million is to be deducted from this operating cash flow forecast following the repayment of factoring in first-quarter 2022, as well as the purchase of CO2 certificates.
Following the disclosure on April 13, K+S’ shares rose to their highest since Sept. 2015, surging 8.8 percent to €35.26 per share on the profit outlook. On April 14, K+S shares touched a high of €35.49.
The company will release its first-quarter 2022 financial results, including its full outlook for FY22, on May 11.