Eastern Cornbelt:
Potassium thiosulfate pricing was pegged at a firm $700/st FOB Terre Haute for new offers.
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Crops/Weather
Eastern Cornbelt:
Unseasonably warm weather helped advance the corn and soybean harvest in many areas of the Eastern Cornbelt, but showers during the week limited field activities in other locations.
A line of strong thunderstorms tracked through central Illinois and central Indiana on Oct. 11, with an EF-2 tornado confirmed near Wrights, Ill. Highs reached the upper-70s by midweek, but spotty showers returned as the week progressed. Forecasts called for a cool, wet weekend in both states.
Highs in central and northern Ohio were also expected to drop from the upper-70s to the low-60s by the coming weekend, with a strong chance of rain on Oct. 15-16.
The corn harvest as of Oct. 10 had progressed to 55 percent complete in Illinois, 36 percent in Indiana, and 19 percent in Ohio, with good or excellent ratings assigned to 70-76 percent of the regional crop. The soybean harvest was trailing the average pace slightly at 43 percent complete in Illinois, 38 percent in Indiana, and 33 percent in Ohio, with 68-71 percent of the acreage rated as good or excellent.
Western Cornbelt:
Stormy weather hit Nebraska on Oct. 12-13, with reports of rain, wind, and much cooler temperatures. Heavy rain and small hail also hit parts of central and eastern Iowa at midweek, along with 35-45 mph wind gusts. The moisture helped east drought conditions across both states.
Over the previous weekend, fast-moving storms brought severe weather, including lightning and heavy rain, to parts of Missouri. Two tornadoes were confirmed early on Oct. 11 in southwestern Missouri. As the week progressed, scattered rainfall was expected across northern Missouri as well.
Missouri growers had 64 percent of the corn in the bin by Oct. 10, compared with 29-30 percent in Iowa and Nebraska, while the soybean harvest had progressed to 60 percent complete in Nebraska, 56 percent complete in Iowa, and 22 percent in Missouri. The harvest of both crops was tracking ahead of the average pace in all three states, with good or excellent ratings assigned to 70-75 percent of the acreage in Nebraska and 60-65 percent in Iowa and Missouri.
Missouri’s rice harvest was 68 percent complete by Oct. 10, while cotton growers in the state had just 10 percent of the crop picked with 66 percent of the acreage rated as good or excellent. Nebraska’s sorghum harvest was 38 percent complete, with 52 percent of the crop rated as good or excellent.
California:
A cold front brought howling winds to much of California early in the week, prompting red flag warnings and raising concerns about spreading wildfires. Winds up to 70 mph fanned the new Alisal Fire, which had scorched 8,000 acres in Santa Barbara County by Oct. 12 and was part of a complex of fires that has burned close to 2 million acres this year in California.
With extreme-to-exceptional drought conditions gripping virtually the entire state, weather forecasters were closely watching a building Pacific system that could bring moderate to heavy rain across northern and central California on Oct. 20-26.
California growers had 15 percent of the cotton and 65 percent of the rice harvested by Oct. 10, with both tracking ahead of their five-year averages. Fully 90 percent of California’s cotton was rated as good on that date.
Pacific Northwest:
A powerful storm brought 3-7 inches of wet, heavy snow to a large area of southwestern Montana as the week began, with winter storm warnings and winter weather advisories also in effect for most of eastern Idaho.
The winter precipitation was also accompanied by cold temperatures across the Pacific Northwest, with Seattle posting a record low average temperature of 43 degrees on Oct. 12. Rain and highs in the upper-50s were reported in western Oregon at midweek. High pressure was expected to move in from the west by the weekend, however, with highs climbing to the 60s and 70s across the region by Oct. 17.
Most of the region’s fall harvest was now complete, although Idaho growers were still working on sugar beets, with 42 percent of the crop harvested by Oct. 10. Winter wheat planting was also underway in the region, with progress estimated at 88-89 percent complete in Washington and Idaho, 66 percent in Montana, and 41 percent in Oregon.
Western Canada:
After a period of unseasonably warm weather across the Prairies in early October, a low pressure system on Oct. 13 brought up to 44 mm of rain to parts of Manitoba and a rain/snow mix to areas of southern and central Saskatchewan, along with near freezing temperatures.
Although chilly temperatures and potential snowfall were in the forecast for parts of western Alberta as well, much of the region was expecting a return to warm, dry conditions as the week progressed, with highs pushing into the upper teens by late in the week.
Alberta growers had fully 95 percent of the major crops harvested by the first week of October, well ahead of the five-year average. Harvest progress in Manitoba and Saskatchewan had progressed to 96 percent and 99 percent complete, respectively, with field activities now turning to fall tillage and fertilizer applications.
Transportation
U.S. Gulf and Atlantic:
Transport remained unavailable above Mile 20 in the West Canal due to shoaling brought on by Hurricane Ida in late August. Vessels traveling to Houston from the NOLA area were generally reported detouring through the Port Allen Route, adding 1-2 days of travel time in each direction. A Coast Guard safety bulletin named the stretch of canal running between Miles 21 and 33 as primarily responsible for the stoppage.
Dredging in the West Canal was projected to be completed by the end of the month. Multiple vessels blocking Bayou Lafourche reportedly closed that waterway from Lockport to the West Canal during the week. Lafourche remained open south of the West Canal.
Bayou Chene movements were available daily from 7:00 a.m. to 7:00 p.m. during ongoing floodgate construction, the Coast Guard reported. Tow lengths through the waterway remained capped at 600 feet, while boats with cargo configurations measuring greater than 54 feet in width were required to utilize an assist vessel. Intermittent total shutdowns were possible due to dive activities.
Shoaling extended travel restrictions at Miles 113-116 on the Atchafalaya River in the Morgan City area. Barge drafts were capped at 10 feet, while tows were limited to 600 feet of length and 70 feet of width. Tows running above 400 feet were “strongly advised” to travel with an assist tug.
Excess traffic stemming from the West Canal closure triggered ongoing backups at Port Allen Lock, with delays generally seen in a 2-3 day range. Corps data showed 39 tows queued to lock through the site on Oct. 12.
Restrictions at Algiers Lock limited unassisted tows to four standard barges or two 30,000 mt tankers, although full-length tows remained possible with the use of an assist vessel.
Construction operations at the Belle Chasse Bridge were noted triggering intermittent transit stoppages at Mile 3 in the West Canal. Work at the site was projected to affect navigation through late 2022, with delays expected up to 12 hours at a stretch.
Travel through Bayou Boeuf Lock was restricted to overnight hours only on Monday through Friday, the Coast Guard reported, limiting movements to between 7:00 p.m. and 7:00 a.m. The lock was noted reopening for 24-hour travel on Saturday and Sunday.
Bayou Sorrel Lock waits were noted in a general 7-15 hour range for the week, while most Industrial Lock movements were clocked below 11 hours. Intermittent 5-6 hour wait times were heard through Bayou Boeuf Lock.
The National Hurricane Center reported a tropical disturbance located northeast of the Greater Antilles on Oct. 14. The system was assigned a less than 40 percent chance of strengthening into a tropical cyclone prior to Oct. 16.
Mississippi River:
The Corps announced revised seasonal closing dates for locks located on the upper Mississippi River, pushing the annual winter shutdown into November for a number of locks.
Locks 5A, 8, and 10 were included in the change, leaving planned shutdowns beginning on Nov. 28, roughly one week ahead of the prior Dec. 6 closure schedule. As a result, the locks are now tentatively slated to reopen for spring 2022 on March 17, ahead of the previous March 24 plan.
In addition, Lock 4 will close from Dec. 6 through March 21, while Locks 5 and 7 are tentatively set to shut from Dec. 6 through March 11. Lock 15 will halt navigation for the season on Jan. 1 through March 3, preceded by an in-progress auxiliary chamber closure set to continue through Dec. 1. The Lock 24 winter shutdown is scheduled for Jan. 1-31.
The Dredge Hurley relocated to the lower river’s Mile 293 for the week, from the last reported worksite at Mile 742. No navigation closures were expected from the current round of dredging.
Intermittent Lock 15 delays were noted up to seven hours for the week. Mel Price Lock waits landed under five hours, while Corps data showed sporadic Lock 27 delays in the 6-11 hour range.
Illinois River:
Raised wickets continued to be reported at Peoria Lock and LaGrange Lock due to low water levels, prompting tows to lock through both locations.
Ohio River:
The primary chamber at Cannelton Lock is closed for repairs through Nov. 19, necessitating detours through the site’s auxiliary chamber. In addition, the Cannelton secondary chamber is slated to undergo maintenance on Nov. 1-19, triggering potential intermittent full-lock shutdowns during that time.
Montgomery Lock is scheduled to undergo a main chamber closure starting on Oct. 18, allowing for a round of maintenance and repairs planned to run through Dec. 17. Delays are expected.
The Hannibal Lock primary chamber was reported shut through Oct. 29, forcing tows to pass through the secondary chamber. Waits were heard up to five hours.
An underwater obstruction continued to block operation of the Dashields Lock secondary chamber during the week. The main chamber at Willow Island Lock was reported shut to navigation through Oct. 31, forcing tows to pass through the auxiliary chamber.
Markland Lock’s secondary chamber has remained closed to vessel traffic since first-half 2020 due to structural cracks in the miter gate. Repairs were tentatively slated to conclude on Oct. 29. Maintenance underway at Olmsted Lock pushed delays to an average 7-12 hours.
A main chamber breakdown reported at the Tennessee River’s Pickwick Landing Lock was noted precipitating minimal delays for the week. Repairs were scheduled on Oct. 12-23, during which tows were expected to pass through the secondary lock chamber.
Wilson Lock continued to run staggered one-way lockages due to site damage. Southbound tows were allowed to lock during daylight hours, followed by northbound movements overnight. Delays were clocked up to seven hours for the week.
Kentucky Lock is set to undergo a total shutdown on Nov. 1-24, followed by another from Nov. 29 to Dec. 10, due to planned miter gate repairs. Tows were expected to detour through the Barkley Canal during the operation. Waits were quoted up to 23 hours for the week.
Lock 2 on the Monongahela River was slated to end a period of repairs and maintenance on Oct. 15. Main chamber work in progress at the site since Sept. 13 has forced all vessels to pass via the smaller secondary chamber, triggering intermittent lengthy delays.
The Allegheny River’s Lock 6 was reportedly closed to navigation until further notice due to miter gate damage.
Arkansas River:
Work scheduled for Oct. 19-21 at Joe Hardin Lock is expected to trigger intermittent transit stoppages from 7:00 a.m. to 6:00 p.m. Sporadic daylight-hour shutdowns are likely at Emmett Sanders Lock on Oct. 26-28 due to planned maintenance.
USDA Gives Bearish Outlook on Corn Amid Soaring Fertilizer Costs
USDA’s Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports on Oct. 12 showed higher production and stocks for corn and soybeans, with analysts predicting a bearish outlook for crop prices amid soaring fertilizer costs. Sources in the field are sensing a significant acreage shift from corn to soybeans next year as a result.
Corn production was forecast at 15.0 billion bushels, up slightly from the previous forecast and up 6 percent from 2020. Based on conditions as of Oct. 1, yields are expected to average 176.5 bushels/acre, up 0.2 bushel from the previous forecast and up 5.1 bushels from last year.
Corn supplies are forecast up 72 million bushels from last month, on slightly higher production and increased beginning stocks based on the Sept. 30 Grain Stocks report. Projected feed and residual use was lowered 50 million bushels based on indicated disappearance during 2020/21. With supply rising and use falling, corn ending stocks for 2021/22 were raised 92 million bushels, while the season-average corn price was unchanged at $5.45 per bushel.
Bloomberg, citing ED&F Man Capital Markets Inc. analyst Charlie Sernatinger, suggested that December corn, fetching $5.24 a bushel currently, could fall below $5 per bushel based on the bearish outlook.
Soybean production was forecast at a record 4.45 billion bushels, up 2 percent from the previous forecast and up 5 percent from 2020. Soybean yields are expected to average 51.5 bushels/acre, up 0.9 bushel from the previous forecast and up 0.5 bushel from 2020.
Soybean supplies for 2021/22 are projected at 4.7 billion bushels, up 145 million on higher production and beginning stocks. With higher crush and unchanged exports, 2021/22 ending stocks are projected at 320 million bushels, up 135 million from last month. The U.S. season-average soybean price for 2021/22 is forecast at $12.35 per bushel, down 55 cents reflecting larger supplies.
The higher production and stocks estimates arrive as fertilizer prices continue climbing, driven by supply challenges and production outages in Europe due to high natural gas costs. The Green Markets North America Fertilizer Price Index hit a record $996.32/st on Oct. 8, up 7.9 percent on the year. Many analysts see the current pricing uptick continuing into 2022 as oil and natural gas prices are further buoyed by easing pandemic restrictions and a sustained global economic recovery.
With fertilizer costs accounting for 45 percent of the operating expenses for U.S. corn farmers, sources are telling Green Markets that a significant acreage shift from corn to soybeans is likely in 2022.
“The demand destruction is beginning,” said one Midwest contact this week. “My largest grower I spoke with today said he is planning on switching to 100 percent soybeans next year due to these input cost levels, has no interest in corn. You just cannot make them pencil out. It’s tough forecasting needs going forward. This business is not fun anymore.”
Not all were prepared to jump on the soybean bandwagon, however. “The acreage battle next year has turned sharply in corn’s favor,” countered Alexis Maxwell, Green Markets Director of Research. “After the report, the 2022 soy to corn ratio continued to fall and is at 2.33, a level that incentives more corn production next year. As recently as September, the ratio at 2.5 was a call for the opposite, more soybeans. Still, the ratio does not account for higher fertilizer costs, which will give many corn farmers pause as they pencil out next year’s budgets.”
Less-than-expected U.S. and global wheat supplies were one of the few bullish surprises in the WASDE report, and prices moved higher as a result. USDA lowered its estimate for wheat supplies by 10 million bushels, to 125 million bushels, due to lower production and reduced imports, while projected 2021/22 ending stocks were reduced 35 million bushels, to 580 million, which are the lowest U.S. ending stocks since 2007/08.
The projected 2021/22 season-average farm price for wheat was raised $0.10 per bushel to $6.70 per bushel, on reported National Agricultural Statistics Service (NASS) prices to date and price expectations for the remainder of 2021/22.
ICL Expands NOP Supply with Haldor Topsoe
ICL, Tel Aviv, announced on Oct. 14 its intention to expand its current commercial relationship with Haldor Topsoe. ICP said it is looking forward to entering into a long-term supply arrangement for potassium nitrate (NOP).
ICL expects to expand its NOP sourcing from Haldor Topsoe and begin marketing product in the first quarter of 2022, as it further integrates Topsoe material into its global supply offerings. ICL said it expects to maintain its other existing potassium nitrate supplier relationships.
“Haldor Topsoe has been a trusted supplier for the past several years, and this arrangement expands our existing relationship and allows both of us to advance our sustainability efforts,” said Heinrich Berger, ICL Vice President of Global Raw Materials procurement. “As a Together for Sustainability (TfS) supplier, Haldor Topsoe has demonstrated its commitment to integrating sustainability performance metrics into their business – just as ICL has – and we are proud to partner with them.”
“We want to help our customers in their renewable energy transition, by offering carbon emission reduction technologies,” said Lars Skyum, Haldor Topsoe Senior Vice President. “Since ICL is the expert in specialty fertilizers, we are very satisfied they will be offtaking our potassium nitrate, which will then be fully and efficiently used to fertilize much-needed crops on a global basis.”
Thousands Strike at John Deere, Raising Concerns about Access to Machinery, Parts
More than 10,000 production and warehouse workers at 14 John Deere plants in Iowa, Illinois, Kansas, Colorado, and Georgia walked off the job at midnight on Oct. 14 after the Moline, Ill.-based company failed to reach an agreement with United Auto Workers by the union’s midnight deadline.
The 10,000 unionized workers on Oct. 10 had rejected a tentative agreement by a 90 percent margin. Earlier, the workers, represented by nine locals with the United Auto Workers, voted 99 percent in favor of a strike authorization in September after receiving the initial six-year contract proposal from John Deere.
At issue are disputes over wage increases for employees after Deere & Co. posted a record $4.7 billion in profit this year and the company’s CEO compensation jumped, Bloomberg reported, creating a perception among its unionized workers that the company is holding out on wages and benefits. The rejected contract proposal would have given five percent wage hikes for some workers and a six percent boost to others.
“After weeks of negotiations, John Deere reached tentative agreements with the UAW that would have made the best wages and most comprehensive benefits in our industries significantly better for our employees,” said Brad Morris, Vice President of Labor Relations for Deere & Company, in an Oct. 10 statement. “John Deere remains fully committed to continuing the collective bargaining process in an effort to better understand our employees’ viewpoints. In the meantime, our operations will continue as normal.”
Thursday’s walkout marks the largest UAW strike since 49,000 General Motors workers walked off the job in September and October 2019, Bloomberg reported. The 10,000-worker estimate also makes it the ninth largest UAW strike since 1985, according to Bloomberg Law data.
The strike has raised concerns among farmers about whether they will have access to machinery and parts for the fall and into next year, the Des Moines Register reported. The strike also gained the attention of prominent politicians.
“Profits at John Deere have skyrocketed by some 61 percent in recent years, while its CEO’s salary has exploded by 160 percent since the start of the pandemic,” Sen. Bernie Sanders (I-Vt.) tweeted on Oct. 14. “Please do not tell me they cannot afford to pay their workers fairly.”
The jump in John Deere CEO John May’s earnings that Sanders referenced amounted to $15.6 million in 2020, compared with $6 million in 2019, Bloomberg reported. Nearly $7 million came from stock awards, according to Bloomberg data, with the company’s share price rising 39 percent over the last year.
John Deere executives in a statement pledged to maintain operations while negotiations continued. “We are determined to reach an agreement with the UAW that would put every employee in a better economic position and continue to make them the highest paid employees in the agriculture and construction industries,” said Morris.
“These are skilled, tedious jobs that UAW members take pride in every day,” Mitchell Smith, a regional director for the union, said in a notice announcing the strike. “Strikes are never easy on workers or their families, but John Deere workers believe they deserve a better share of the pie, a safer workplace, and adequate benefits.”
While Deere shares fell as much as 2.6 percent on Oct. 14, the company isn’t expected to see any meaningful headwinds to its profitability due to the strike, according to Jefferies analyst Stephen Volkmann, cited by Bloomberg. Volkmann said the impact of the strike could be moderated by the fact that Deere, along with the rest of the industrial economy, is experiencing supplier and logistics bottlenecks that can limit production.
Bloomberg reported that William Blair’s Nicholas Heymann also said that while there will be pressure on Deere to resolve the strike, from a commercial perspective, a shorter- to medium-term strike may not structurally impact its market share, because the overall market is so short of inventory that it is unlikely a competitor will be able to fill any void in the near term.
Edward Jones’ Matt Arnold also said he does not expect the strike or any resulting wage increase to impact the long-term outlook for profitability for the company, Bloomberg reported.
U.K. CO2 Industry to Keep CF Plant Up; Fertilizer Europe Warns of Permanent Closures
CF Industries Holdings, Inc., Deerfield, Ill., will continue to operate its Billingham, U.K., complex at Teeside through at least January 2022, after its U.K. subsidiary, CF Fertilisers, reached carbon dioxide (CO2) pricing and offtake agreements with its industrial gas customers in the country.
Last month, the U.K. government agreed to an exceptional three-week arrangement with CF Fertilisers that allowed the company to restart the ammonia plant at Billingham (GM Sept. 24, p. 1). On Sept. 15, CF announced that it was halting operations at both its Billingham and Ince, northeast England, plants in response to high natural gas prices (GM Sept. 17, p. 1). The plants produce ammonium nitrate as an end product. Ince also produces NPK fertilizer compounds.
The restart followed an interim agreement with the U.K. government reached on Sept. 21 providing “limited financial support” that allowed CF to continue operating while the CO2 industry moved towards a pricing deal.
CO2 is vital for many of the U.K.’s food processing and drink sectors, as well as the country’s hospitals and nuclear power industry, among others.
CF Fertilisers’ Billingham Complex is capable of producing 750 mt of CO2 per day for commercial use as a by-product of the ammonia production process. According to the U.K government statement on Oct. 11 that announced the CO2 pricing agreement, CF Fertilisers’ two U.K. plants produce around 60 percent of the country’s commercial CO2 requirements.
“The price agreed for CO2 reflects the vital importance of this material to the country’s national economy,” the U.K. government said.
U.K. Environment Secretary George Eustice told Sky News last month the U.K. food industry knows there is going to be “a sharp rise” in the cost of carbon dioxide, “probably going from £200 (approximately $273 at current exchange rates) per metric ton, eventually closer to £1,000,” he said (GM Sept. 24, p. 35).
The agreement will ensure that major CO2 supplier CF Fertilisers can remain operational while global gas prices remain high, and gives the company enough breathing space to agree to a longer-term, more sustainable solution, said the U.K. government.
“The deal reached with CF this week alleviates the U.K’s near-term CO2 supply concerns,” said CF President and CEO Tony Will in an Oct. 11 statement. “We look forward to working with the U.K. Secretary of State for Business, Energy, and Industrial Strategy Kwasi Kwarteng and the U.K. government in the future as it develops a longer-term solution for CO2 supply and to support sustainable and competitive U.K. ammonia and fertilizer production.”
CF said its Ince Complex will remain offline, however, and the company does not have an estimate when production will resume at the facility.
Ensus U.K. Ltd.’s Wilton plant on Teeside, which can produce up to 40 percent of the U.K.’s CO2 requirements, reopened last week following temporary closure for planned maintenance, further securing supplies.
Several other major nitrogen fertilizer producers have cut production in recent weeks in the face of soaring natural gas prices, including Yara International ASA, Borealis AG, Lithuania’s Achema, BASF, and Ukraine’s Odesky Pryportoyvi Zavod and Odessa Port Plant (OPP) (GM Oct. 1, p. 1).
Last week, German ammonia producer SKW Stickstoffwerke Piesteritz GmbH said it would cut production by 20 percent to offset rising gas prices (GM Oct. 8, p. 1) and Romania’s sole fertilizer producer, Azomures SA, and part of the Swiss crop trading group Ameropa AG, said it had cut production in half due to soaring natural gas prices (GM Oct. 8, p. 30).
On Oct. 11, Croatian fertilizer producer Petrokemija dd said its plants will remain shut down until further notice, “in order to optimize and align business operations to the conditions on the gas market and record-high prices of natural gas and CO2 in Europe.”
The producer said sufficient mineral fertilizer quantities have been secured to maintain the supply to domestic and regional markets during downtime.
Petrokemija had planned to restart its ammonia and urea plants at its main Kutina production site once repairs were completed following a technical problem that caused the plants to be shut down on Sept. 22 (GM Sept. 24, p. 7). It said at the time that its other fertilizer plants were continuing to operate normally.
The technical problem is now fixed, according to this week’s statement. The urea plant is understood to have production capacity of around 500,000 mt/y.
In July, the company had been targeting the restart of ammonium nitrate production at the end of September after suspending production for safety reasons at the end of February following a strong earthquake that hit central Croatia in late December last year (GM July 30, p. 33).
Fertilizers Europe, the Brussels-based organization that represents 17 fertilizer producers and eight national associations, is warning that temporary closures in the face of “sky-high” gas costs could become permanent.
“For the E.U. fertilizer industry, natural gas traditionally accounts for up to 80 percent of production costs,” Fertilizers Europe Director General Jacob Hansen said in a statement on Oct. 13. “The exceptionally high gas prices have made fertilizer production in Europe uneconomic, leading to significant temporary curtailments and plant closures across Europe.
“If this situation is not addressed urgently, there is a real risk that temporary closures will lead to permanent closures or relocation of our sector outside Europe,” he warned.
The energy price toolbox proposed by the European Commission to address the energy price shock, while “a step in the right direction,” Hansen said, “falls short” of providing immediate measures to significantly reduce the impact on industry and citizens.
He noted that the energy price toolbox is “very much a compendium of existing policy options available to E.U. member states.
“What the European industry needs is rapid and targeted measures minimizing the effects of the looming crisis,” said Hansen.
The E.U. fertilizer industry seeks, among others, “urgent corrective action” by the Commission and Member States, “including serious consideration for making emergency kick-start state aid permissible, commercial diplomatic pressure on the major gas suppliers to Europe, and support for E.U. farmers to deal with the volatile market environment,” he said.
In related news, European natural gas futures fell after Russia said on Oct. 15 that spot sales from Gazprom – Europe’s biggest gas supplier – could possibly resume at the company’s electronic platform in November-December, once domestic storage is filled, Bloomberg reported, citing Russian Deputy Prime Minister Alexander Novak.
The exact timing will be decided by Gazprom, based on requests, needs, and emerging balances, Novak said.
The U.K. front-month futures contract (November) had fallen 5 percent to 244.5 pence a therm as of 12.01 p.m. (GMT). The Dutch TTF gas futures front-month contract (November) was down 5 percent to €96.75 per megawatt hour at 12.12 p.m.
A warmer weather outlook for Europe is also weighing on gas prices, with forecasts of an autumn heat wave from London to Paris next week. This could provide an extra boost to the region’s gas storage levels, with data showing net withdrawals from inventories started this week, according to the Bloomberg report. Withdrawals from European storage typically begin in the second half of October.
The milder weather could provide some reprieve to the deepening energy crisis in Europe. European gas inventories will start this winter about 78 percent full, the lowest seasonal level since at least 2009, according to Bloomberg.
With additional gas flowing from Russia seen as critical to easing the supply crunch across Europe this winter, traders will focus on whether Gazprom will book additional transit capacity in auctions on Oct. 18.
Bloomberg cited Consultant Wood Mackenzie Ltd. last week warning that Europe still may face gas shortages this winter if cold weather depletes storage levels to zero, leaving the region entirely dependent on additional flows from Russia.
Energy consultancy Energy Aspects Ltd. warned in a note that low European withdrawal capacity could force heavy rationing of European gas in the industrial sector to preserve supply for higher-priority sectors.
Japan’s IHI Moves on Clean Ammonia
IHI Corp., Tokyo, which is spearheading the development of ammonia combustion technology, has announced three new initiatives so far this month. It plans to open an ammonia import terminal in Japan, start up a fuel ammonia project, and commence a feasibility study with two Malaysian partners.
IHI said it has begun developing a large ammonia receiving terminal to bolster ammonia and storage technologies and establish an infrastructure for imported ammonia. It hopes to complete the project by 2025. It has also begun developing large LNG-class ammonia storage tanks for the terminal.
IHI is one of Japan’s major LNG manufacturers. The company said it has engineered and constructed around a third of the nation’s LNG receiving terminals and half of its LNG storage tanks.
IHI has begun small-volume utilization of fuel ammonia at JERA’s Hekinan Thermal Station Unit 5. The purpose is to develop a co-firing burner to be used for large-volume (20 percent heating value) utilization at Unit 4. The project will run approximately four years to March 2025, and aims to achieve the 20 percent rate in fiscal 2024.
The Malaysian study runs through February 2022 and includes assessing technology for co-firing ammonia at coal power stations in Malaysia and evaluating technologies and economics across the entire supply chain, including to produce green ammonia from renewable energy sources and blue ammonia from natural gas.
Malaysian partners include PETRONAS Gas & New Energy Sdn. Bhd., a unit of Petroliam Nasional Bhd (PETRONAS), which is both an energy and an ammonia producer; and TNB Power Generation Sdn Bhd (TNB Genco), which owns and operates several power plants in Peninsular Malaysia. TNB is a wholly owned subsidiary of Tenaga Nasional Berhad (TNB), Malaysia’s biggest electricity utility.
IHI said Japan’s Ministry of Economy, Trade, and Industry (METI) has approved a grant for the Malaysian project under its program for feasibility studies on overseas deployment of high-quality infrastructure.
Anuvia, Novozymes Partner on Bio-Based Nutrients; Initial Focus on Phosphates
Anuvia Plant Nutrients, Winter Garden, Fla., and biological solutions company Novozymes, Raleigh, N.C., announced on Oct. 5 that they have joined forces to develop a range of combined biotechnologies that will reduce the need for synthetic fertilizers in commercial agriculture. They said the resulting products could be available as soon as next year.
The parties expect their products to achieve equivalent or better crop performance than synthetic fertilizers and reduce environmental impact through lower nutrient loss and greenhouse gas emissions. They added that there will be no incremental cost to the grower, nor will they require changes to current farming practices.
“By pairing Anuvia’s sustainable products with Novozymes’ advanced biotechnologies, we are changing the paradigm of plant nutrition by making bio-nutrients a standard tool in commercial agriculture,” said Anuvia CEO Amy Yoder. “Through this partnership, we aim to double the nutritional value of Anuvia’s products without adding a single unit of synthetic nutrient or increasing the volume used.”
“Novozymes and Anuvia share a vision of providing innovative and sustainable solutions to farmers by using biologicals derived from naturally-occurring materials,” said Thomas Stenfeldt Batchelor, Novozymes’ Vice President for Agriculture Marketing & Strategy. “This partnership will allow for rapid development and deployment of advanced nutrient technology to promote sustainable and efficient commercial agriculture for the benefit of farmers, consumers and the environment.”
As a first step, the partnership will combine Novozymes’ phosphate solubilizing microbial solutions with Anuvia’s sustainable bio-based fertilizer products to enhance macro-nutrient efficiency with a focus on phosphate. The partnership envisions several generations of the new technology. The first generation is anticipated to add up to 10 units of phosphorous. Subsequent generations will target the replacement of additional units of macro and micronutrients, such as N, P, and K.
The companies will also work together to identify additional microbes and enzymes that could improve the nutritional efficiency and health of crops.
Anuvia already manufactures sustainable bio-based fertilizers for the agriculture, turf, and lawn care industries. The Mosaic Co., Tampa, licensed Anuvia’s technology for Susterra ™, its first bio-based phosphate product (GM Sept. 25, 2020).
Major St. Paul Terminal Expansion to Include 40,000 st Fertilizer Warehouse
Germany-based Alter Logistics Company and Alter River Terminal, St. Paul, Minn., have started construction on a $24 million expansion at their Barge Channel Road facility in St. Paul. The project includes a new 40,000 st fertilizer warehouse, a stormwater retention installation, and an extensive rail track expansion, Alter said in a press release.
Alter’s current tenant, ADM Fertilizer of Minneapolis, Minn., will use the new warehouse under a long-term contract. The warehouse will have seven large storage bins for bulk products and three micro bins, plus a high-capacity blending/loadout system, according to company officials. The project is expected to be completed in 2022.
Marcus Construction of Willmar, Minn., designed the new building and is the primary and general contractor for the new facility. Alter has also partnered with Sackett-Waconia for mechanical system design and equipment, as well as the existing terminal upgrade.
The facility will receive product from a new 800 st/hour barge unloading system and a 400 st/hour rail unloading system, and will feature storage bays for macro products as well as micro bins for specialty products. The company said the new barge receiving system will feed both the new facility and Alter’s existing facility on the site. Railcars will also be able to discharge into either building.
The new building’s loadout equipment reportedly utilizes dual in-floor conditioner/drag conveyors feeding bucket elevators, which in turn feeds direct to trucks or rail. The facility also incorporates Sackett-Waconia’s high speed “Precision Blending” system, with 250 st of overhead storage.
Alter is also in the process of finalizing plans for an extensive addition to their rail service capacity with about 4,400 feet of new track at the site. The St. Paul Port Authority helped secure funding from the Minnesota Department of Transportation to assist in the project. TKDA Engineering, an engineering firm in St. Paul, has also been involved in all aspects of the project and is serving in a supervisory role for the new building construction.
According to its website, Alter Logistics operates facilities in Rock Island, Ill., and Davenport, Iowa, in addition to the St. Paul site. The company said it works with all major barge lines, trucking companies, heavy lift crane vendors, and container lines serving barge, truck, and rail modes of transportation at its intermodal terminals.
Earlier this year, Alter Logistics announced that it was planning a major investment in its St. Paul dock facility, which the company said would allow hundreds of additional barges to the site during shipping season.