All posts by thoughton8@bloomberg.net

Crops/Weather

Crops/Weather, Eastern Canada, Eastern Cornbelt, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt:

US Drought Monitor

The remains of Hurricane Beryl moved through the Eastern Cornbelt on July 9-10, pouring several inches of rain on the region and spawning at least six tornadoes in Indiana and northern Kentucky. High heat and humidity was expected to return to the region later in the week, with heat index values climbing to the triple digits.

Parts of eastern Illinois registered more than four inches of rain from Beryl, while Indiana was hit with an EF-3 tornado packing 140 mph winds near Mount Vernon, and EF-2 with 120 mph winds near Poseyville, and two EF-1 tornadoes with 100 mph winds near Springfield and Patoka.

Ohio and Michigan also received heavy rain from the storm, with multiple locations in southern Michigan reporting more than four inches on July 9-10, and a few isolated areas posting 6-7 inches of rain.

Good or excellent ratings were assigned to 73-74% of the corn and soybeans in Ohio on July 7, compared with 66-67% in Illinois and Indiana. Michigan’s corn crop was 73% good or excellent, with 60% of the state’s soybean crop falling into those two categories.

Western Cornbelt:

While the Eastern Cornbelt, Great Lakes, and Northeast received heavy rain from the remnants of Hurricane Beryl, Iowa was finally able to enjoy mostly dry weather during the week after heavy and frequent showers in recent weeks. Hot, humid weather was on tap for the coming weekend, however, with heat indices expected to reach the lower triple digits.

Nebraska and western Missouri were also bracing for high heat by the weekend, with forecasts calling for highs in the mid- to upper-90s and heat indices climbing to 100-110 degrees.

USDA rated 76-80% of the corn and 75-76% of the soybeans as good or excellent in the region on July 7. Good or excellent ratings were also assigned to 59% of Missouri’s cotton and 77% of the state’s rice crop, along with 84% of Nebraska’s sorghum crop.

Northern Plains:

A line of thunderstorms moved through parts of central and southern Minnesota at midweek, with reports of localized power outages from strong winds and hail.

Temperatures steadily increased throughout the week. Highs in the Dakotas were reported in the mid-80s at midweek but were expected to reach the upper-80s and low-90s by the weekend. Highs in the upper-90s were in the forecast for July 14.

Corn and soybeans in South Dakota were rated as 68-72% good or excellent on July 6, compared with 58-70% in North Dakota and 59-60% in Minnesota. The region’s small grains crops were in excellent condition, with 78-81% of North Dakota’s spring wheat, barley, and oats rated as good or excellent, along with 75-82% of the acreage in South Dakota and 76-88% in Minnesota. Fully 81% of South Dakota’s sorghum was also rated as good or excellent.

Northeast:

The remnants of Hurricane Beryl brought heavy rain to the Northeast and New England, triggering flash flooding across the region and tornado activity in New York.

While most of the heavy rain had subsided by July 11, flash flood warnings remained in effect across the region. Many areas in northern New York, Vermont, and New Hampshire picked up 3-5 inches of rain, with some areas seeing more than six inches.

“As many of you know, last night’s rainfall across several counties resulted in power outages, several closed roads and bridges, many evacuations due to rushing water, damage to homes and property, and regrettably, the loss of one life at this point,” Vermont Gov. Phil Scott said during a July 11 news conference.

The region endured a heat wave prior to Beryl’s arrival, with heat indices nearing triple digits in many locations on July 8-9. The heat and moisture have benefited corn crops in the region, with fully 81% of Pennsylvania’s crop rated as good or excellent on July 7.

Eastern Canada:

Heavy rain hit much of Eastern Canada as the remnants of Hurricane Beryl moved through the region on July 10-11. Special weather statements and rainfall warnings were in effect in southern Ontario, Quebec, and the Maritimes during the week, with the hardest hit areas expecting up to 75-100 mm of rain and other locations looking at 30-50 mm.

Montreal was bracing for 50-75 mm of rain at midweek. In the Maritimes, forecasts warned of 40-70 mm of rain in New Brunswick and 40-60 mm in Prince Edward Island, though up to 100 mm was possible in some areas by July 11.

Transportation

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

US Gulf:

Travel will be unavailable through Port Allen Lock from July 30 to Aug. 3 and again on Aug. 12-15 for miter gate repair. Port Allen Lock was closed to navigation for most of April following a miter gate hinge anchorage failure on March 28.

The Louisiana Highway 1 Bridge will shut to marine traffic from 8 p.m. on July 20 through 4 a.m. on July 21. Bayou Boeuf Lock repairs were scheduled to end on July 10. The work was reported to limit Monday-Friday travel between 7 a.m. and 6 p.m.

Guidewall repairs at Bayou Sorrel Lock scheduled through Oct. 30 blocked weekday travel from 7 a.m. to 4 p.m. Wait times were quoted up to 30 hours at midweek, down from 37 hours at last report.

Ongoing work at Brazos Lock limited weekday travel between 7 a.m. and 7 p.m. Most delays topped out around the 12-hour mark, according to Corps data. The project is expected to run through October.

Repairs and maintenance underway at the San Jacinto River Bridge in the Houston area were anticipated to continue through July. Traffic is limited to single-wide tows through the western side of the channel. The channel’s eastern side is completely shut to navigation, sources said.

Port Allen Lock delays were reported up to 13 hours at midweek, while tows waited 24-48 hours to pass Industrial Lock. Intermittent nine-hour waits were noted at Algiers Lock.

Mississippi River:

National weather service (NWS) data showed falling water levels at St. Paul and Savage, Minn., during the week. Vessel traffic at St. Paul had effectively returned to normal on July 11 after area levels moved below the 14-foot minor-flood stage on July 7, allowing navigation to resume for the first time since high-water stoppages began on June 23.

The Savage area remained above the 702-foot minor-flood stage at 704.6 feet, however. The gauge was projected to recede into action-stage territory on July 16, and a flood warning in place on July 11 was slated to expire on July 16.

With the floodwaters continuing to work their way downriver, shutdowns remained in effect at Locks 11-13, Locks 16-18, and Lock 20 on July 9, sources said.

Additionally, river levels were reported at a minor-flood 31.1 feet at St. Louis on July 11, triggering significant delays and a 20% reduction in tow lengths through the area. Southbound tows larger than 20 barges were restricted to daytime-only travel through Miles 43-46 until the St. Louis gauge falls below the 29-foot mark.

St. Louis was forecast to fall below the 28-foot action stage on July 13. A flood warning was in effect through July 12.

On the lower river, work began on July 10 at Mile 759, forcing a halt to southbound travel between 7 a.m. and 7 p.m. daily. Work underway at Miles 755 and 769 was not expected to impact navigation. The Fort Madison Bridge was scheduled to shut to marine travel from 9 a.m. to 2 p.m. on July 14, 28, and Aug. 1.

Lock 21 will close to daytime travel on Aug. 13, sources said. On the Cumberland River, Old Hickory Lock will be completely offline from July 8 to Aug. 1 for hydraulic line replacement. The lock was previously closed to daytime travel on June 10-27.

Illinois River:

Maximum loading drafts on the Illinois River continued to be reported at 9.5 feet for Miles 1-231 and 9.0 feet above Mile 231. Miter gate gear box repairs triggered four-hour closures at Dresden Island Lock on July 9 and Brandon Road Lock on July 10, sources said. Navigation was unavailable from 8 a.m. to 12 p.m. on both days.

Delays were noted in the 4-11 hour range at Dresden Island Lock during the week. Vessels waited up to six hours to pass Marseilles Lock, and staggered nine-hour waits were reported at Peoria Lock.

Ohio River:

Loading drafts continued to be reduced on the Ohio River due to low water levels, sources said. Drafts were capped at 10-10.5 feet, depending on location and direction of travel – a 5-10% reduction – while tow lengths were permitted up to 15 barges everywhere on the river.

On July 8, McAlpine Lock closed to downriver lockages between 7 a.m. and 7 p.m. through Nov. 30. Minimal delays were reported at midweek. The main chamber at Markland Lock is offline for 19 hours daily between July 8 and Aug. 2, prompting detours through the auxiliary chamber. The outage is scheduled to repeat between Aug. 12 and Sept. 6.

The Hannibal Lock main chamber is closed for miter gate repairs through Nov. 8, prompting scattered delays up to 24 hours, down from 42 hours at last report. Machinery work at Racine Lock was scheduled to wrap up on July 11.

The primary chamber at John T. Myers Lock is anticipated to close on Aug. 21 through Nov. 9. A similar outage in October 2023 resulted in delays up to four days in length. Belleville Lock will see 30-day main and auxiliary chamber closures before the end of the year.

Intermittent shutdowns for miter gate fender replacement, reported from 6 a.m. to 6 p.m. at the Tennessee River’s Kentucky Lock, were slated to run through Aug. 1. Delays were quoted up to 21 hours. Wait times ran up to 18 hours at Wilson Lock, down from 40 hours at last check.

Arkansas River:

The Van Buren Bridge, located at Mile 300.8 of the Arkansas River, will shut for repairs on Aug. 16-Sept. 8. Queued vessels will be allowed to pass following the ninth day of work, sources said.

Ammonium Thiosulfate

Amthio, Eastern Canada, Eastern Cornbelt, Western Cornbelt

Eastern Cornbelt:

The ammonium thiosulfate market remained at $300-$315/st FOB in the Eastern Cornbelt, with the low in Indiana and the high at Cincinnati.

Western Cornbelt:

Ammonium thiosulfate pricing was steady at $280-$305/st FOB in the Western Cornbelt, depending on location.

Eastern Canada:

Ammonium thiosulfate was quoted in a broad range at C$460-$545/mt FOB for the last confirmed offers in Eastern Canada.

CAN

CAN, CAN-17, Germany

Germany:

No major developments for CAN were seen in Germany, where demand is seasonally muted. Ample availability was reported from both domestic and foreign producers, with Russian product reportedly offered in the €265-€270/mt CIF range and domestic producers offering at €275/mt CIF.

With €280/mt CIF reportedly no longer achievable, the regional range slipped to €265-€275/mt CIF.

Potassium Sulfate

Eastern Canada, Potassium Sulfate, U.S. Exports, U.S. Imports

US Imports:

SOP imports fell 16.8% in May, to 18,875 st from 22,699 st in May 2023. Imports moved 24.8% lower in July-May, to 87,932 st from the previous year’s 116,928 st. Canada regained the top import spot for July-May with 37,706 st, narrowly beating 37,411 st from Germany. Belgium added 7,338 st. 

US Exports:

May SOP exports fell 3.8%, to 1,085 st from the year-ago 1,128 st. July-May exports moved down 48.3%, to 22,545 st from 43,572 st in the prior year. Mexico purchased 10,923 st of US product in July-May, followed by Canada with 7,345 st. Exports to Singapore continued at 2,142 st.

Eastern Canada:

SOP remained in a broad range at C$1,085-$1,200/mt FOB in Eastern Canada, depending on grade and location.

LSB Second-Quarter Result Off on Lower Prices

Ammonia, Asia, Europe, Featured, News, UAN, Uncategorized

LSB Industries Inc. reported second-quarter net income of $25 million on net sales of $166 million, down from the year-ago $103 million and $285 million, respectively. Adjusted EBITDA was $47 million, down from $158 million.

LSB reported adjusted EPS of $0.25 per share for the second quarter, down from last year’s $1.22 but a 6.84% positive surprise compared to Bloomberg’s Consensus Estimate.

Net sales declined during the quarter driven by lower pricing for all products, partially offset by higher sales volumes for ammonia, LSB reported. LSB said the year-over-year decline in operating income and adjusted EBITDA primarily resulted from lower selling prices, partially offset by higher sales volumes and lower natural gas prices.

“For the second consecutive quarter we experienced a significant year-over-year decline in selling prices, reflecting the impact of lower natural gas prices in Europe and weaker industrial activity in Asia,” said LSB President and CEO Mark Behrman. “Additionally, UAN demand was below expectations as farmers opted to apply more urea due to what had been comparatively attractive pricing early this year versus UAN.”

Behrman noted that prices for nitrogen products have begun to improve, however, and the company expects this trend to continue “at a measured pace through the second half of this year,” with further improvement likely building into the 2024 spring planting season.

In addition to improved pricing, LSB said it expects favorable US corn market dynamics to provide support for stronger fertilizer pricing later this year and into next year. Corn prices remain above 10-year averages, the company said, which should incentivize farmers to optimize fertilizer applications in the fourth quarter of 2023 and spring 2024.

The company has no turnarounds planned this year, but LSB said the NuStar pipeline will be down for six weeks during 3Q, so ammonia sales volumes are expected to soften.

Despite the second-quarter headwinds, LSB continued to generate solid free cash flow in the quarter. “As a result, we not only implemented and repurchased stock under our $150 million buyback plan, but we also bought back $125 million of our bonds at a discount to their issuance price,” Behrman said. “Even with this return of capital to our shareholders, we maintained a substantial cash balance that will support our growth initiatives in the coming years.”

Behrman said LSB continues to evaluate projects to increase production capacity and expand its product mix. LSB submitted a capacity expansion project at its El Dorado, Ark., plant to the USDA for funding under its Fertilizer Production Expansion Program. LSB said it was selected for consideration and the company expects the total project expense at $400 million, of which the USDA would fund up to 25%.

Behrman said LSB plans to commence more detailed engineering in the coming weeks, including FEED, on the projects that have the most attractive return profiles. “We would expect to move forward with financial investment decisions on one or more of those projects at some point in the second half of 2024,” he said.

Behrman also highlighted LSB’s recent MOU with Amogy Inc. (GM May 26, p. 29) for the development of ammonia marine fuel.

“Through these projects, and the other projects we are exploring, we are well positioned to benefit from attractive government incentives that are currently in place,” he said. “Additionally, we believe these projects will benefit from anticipated growth in end-market demand, particularly for clean ammonia for power generation and marine locomotion.”

Product (Gross Sales in $000s) 2Q-23 2Q-22 % Change
AN & Nitric Acid 69,561 96,142 (28)
UAN 40,905 76,986 (47)
Ammonia        39,612 89,444 (56)
Other 15,767 22,231 (29)
Total 165,845 284,803 (42)
Sales Volumes st 2Q-23 2Q-22 % Change
AN & Nitric Acid 161,987 162,014 (0)
UAN 126,010 130,561 (3)
Ammonia        102,047 75,526 35
Total 390,044 368,101 6
Avg Selling Price $/st 2Q-23 2Q-22 % Change
AN & Nitric Acid 381 525 (27)
UAN 285 553 (48)
Ammonia        367 1,164 (68)
Other Factors 2Q-23 2Q-22 % Change
Avg Nat Gas ($/mmBtu) 3.39 7.15 (53)
Tampa NH3 $/mt 370 1,257 (71)
NOLA UAN $/st 251 584 (57)

International Chemical Co. – Management Brief

Management Briefs

Tulsa-based International Chemical Co. (Inter-Chem) has announced several senior leadership changes. Brad Thomas, who has been with the company for 35 years and served as President and CEO for the last 16 years, retired as of June 30. Aaron Choquette, former Senior Vice President, has stepped into the role of President and CEO.

Inter-Chem said Thomas was instrumental in guiding the company through its Employee Ownership structure and growing Inter-Chem and its associated subsidiaries through a variety of expansions and acquisitions. Choquette has been with Inter-Chem for 33 years, serving in a variety of roles including accounting, operations, commercial trading, and business development.

John Mayfield continues in his roles as Senior Vice President and Chief Financial Officer. Mayfield has 36 years of tenure with Inter-Chem having served in a variety of financial roles. Doug Wells, who has been with the company for 35 years, is serving as Senior Vice President in Fertilizer Dealer Sales.

Mark Coolidge, who has been with Inter-Chem for 19 years, is now serving as Vice President, Sulfur. Steven Groce has been named Vice President, Southeast Fertilizer Sales, and has 15 years of experience with the company.