Charleston, W. Va.-Two workers were taken to the hospital for observation early Friday Dec. 3 after a release of monomethylamine at DuPont’s Belle plant. One of the two was released that evening, and the second midday on Saturday. “Neither of the two employees has shown any signs of respiratory symptoms since the incident and neither currently has any medical restrictions,” according to DuPont spokesman David Hastings. Hastings said the plant fume alarm sounded and the emergency response team was immediately on the scene, while the Belle fire department stood by at the plant gate as a precaution. “Everything was under control a few minutes later. Our preliminary estimate is that the amount released was well under the reportable threshold quantity of 100 pounds,” Hastings reported. “Appropriate state and local officials have been notified, and the plant is conducting an investigation to determine the cause of the incident and confirm the amount released.” Methylamines are used to make intermediates for a wide range of agricultural chemicals, including herbicides, fungicides, insecticides, biocides, and miticides. They are a combination of ammonia and methanol, and are sold in an anhydrous form.
All posts by traceybg@gmail.com
Ryder full service locations to offer DEF
Miami, Fla.-Ryder System Inc. will soon be offering diesel exhaust fluid (DEF) at every full service Ryder location in North America supporting contractual full service lease and maintenance customers operating vehicles that use Selective Catalytic Reduction technology to meet EPA’s 2010 emission standards. Ryder’s full service lease and maintenance customers will be able to purchase DEF in 2.5 gallon portable containers at a competitive price. Ryder will establish an initial inventory of DEF at each of its 600-plus service locations in North America and will increase that inventory as demand for DEF grows. A limited inventory of DEF will also be available at non-fueling locations for emergency roadside service needs, as well as to support EPA 2010 compliant vehicles that are part of Ryder’s commercial rental fleet. “As more EPA 2010 compliant vehicles are introduced into our customers’ fleets, we are prepared to ensure that customers will have DEF availability across Ryder’s network,” stated Robert Sanchez, president of global fleet management solutions for Ryder. “Over the long-term, we will continue to evolve our DEF storage and dispensing infrastructure to meet the needs of the marketplace.” In 2011 as DEF demand increases, Ryder will add bulk storage and DEF pumps at its largest shop facilities throughout North America.
Management Briefs
The Scotts Miracle-Gro Co., Marysville, Ohio, announces that Stephen Johnson, former administrator of the U.S. Environmental Protection Agency (EPA), has been named to its board of directors, effective immediately. He began working at EPA in 1979 and held multiple roles during his tenure until being named administrator by President George W. Bush in 2005. He was the first career employee and scientist to lead EPA.
“We are committed to a culture of regulatory compliance and to protecting our environment, and Steve’s appointment to our board reinforces that point,” said Jim Hagedorn, chairman and CEO. “We have known Steve for years and deeply respect his technical expertise and understanding of key regulatory and environmental issues. I have total confidence in saying that Steve’s appointment to our board will make us a better company.”
In addition to his years with EPA, Johnson held a number of positions with various laboratory and biotechnology companies. He received a B.A. in biology from Taylor University and a master’s degree in pathology from George Washington University. He has been awarded honorary Doctor of Science degrees from Taylor University and Wesleyan University.
Johnson fills the term formerly held by Mark Baker, who recently resigned from the board. The term expires in 2013.
Rentech Inc., Los Angeles, reports that retired U.S. Army General Wesley Clark has joined the company’s board of directors. Clark rose to the rank of four-star general and held the position of NATO Supreme Allied Commander and Commander in Chief of the U.S.-European Command.
Clark, a former U.S. presidential candidate, also served a stint on the board of CVR Energy Inc., Sugar Land, Texas (GM Oct. 2, 2006), which owns a nitrogen plant in Coffeyville, Kan.
Rentech owns Rentech Energy Midwest Corp., which owns a nitrogen plant in East Dubuque, Ill.
“I am committed to helping our nation find alternatives to our reliance on imported oil in an environmentally responsible way. I am excited to join Rentech’s board because its technologies and fuels present the opportunity to lessen our dependence on foreign oil while creating green jobs here at home,” said Clark.
He serves as chairman and CEO of Wesley K. Clark & Associates, a strategic consulting firm he founded in March 2003, and as chairman of investment bank Rodman & Renshaw. Clark has focused much of his time and efforts in recent years on the energy business, and he has served as an advisor to and a board member of numerous domestic and international energy companies, including Bankers Petroleum Ltd., a Canadian-based oil and gas exploration and production company, and Juhl Energy Inc., a wind energy provider. Clark also serves as chairman of Clean Terra, a firm he co-founded that is dedicated to financing, developing, and managing scalable clean energy/fuel projects and implementing smart Clean Technology public policy. He is a member of the Clinton Global Initiative’s Energy & Climate Change Advisory Board and the American Council on Renewable Energy’s Advisory Board.
CHS Inc. has elected six agricultural producers to the cooperative’s board of directors. Elected for a three-year term was C.J. Blew, a Castleton, Kan., farmer who is currently chairman of the Mid Kansas Co-op board of directors. He assumes a position on the 17-member board, which was recently shifted from Minnesota to the company’s south central U.S. region. Re-elected for three-year terms were Michael Toelle, Browns Valley, Minn.; Dennis Carlson, Mandan, N.D.; Randy Knecht, Houghton, S.D.; Robert Bass, Reedsburg, Wis.; and Steve Riegel, Ford, Kan. The elections took place Dec. 3 at the CHS annual meeting held in Minneapolis.
Following the annual meeting, the 17 directors re-elected Toelle to his ninth one-year term as chairman of the board for the nation’s largest cooperative. Other officers elected include Bass as first vice chairman; Jerry Hasnedl of St. Hilaire, Minn., as secretary-treasurer; Curt Eischens of Minneota, Minn., as second vice chairman; and Knecht as assistant secretary-treasurer.
MBAC Fertilizer Corp., Toronto, has named Roberto Busato Belger as senior vice president and chief operating officer, effective Dec. 16, 2010. He brings over 32 years of experience in fertilizer operations and mine management, primarily in Brazil. He is a mining engineer, and most recently was COO of Fosfertil Fertilizantes SA. He has held various roles within the Bunge Group, including the position of CEO of Bunge’s fertilizer business in Argentina.
MBAC is focused on becoming a significant integrated producer of phosphate and potash fertilizers in the Brazilian and Latin American markets. In October 2008, MBAC acquired Itafós Mineração Ltda, which consisted of a phosphate mine, a mill, and plant and related infrastructure, all located in central Brazil. MBAC’s exploration portfolio includes a number of additional phosphate and potash projects, also located in Brazil.
Market Watch
AMMONIA
U.S. Gulf/Tampa: The Tampa market remained quiet last week. Nothing new was reported at NOLA despite a flurry of speculation during the prior week.
Eastern Cornbelt: Eastern Cornbelt sources said dry tons continued to move to the field in certain areas of the region last week, but the fall ammonia season was over. Sources quoted the ammonia market at $670-$685/st FOB regional terminals last week, down some $20/st from last report, with the low for prompt tons out of spot Illinois shipping points and the upper end for spring prepay.
Western Cornbelt: Cold temperatures and snowfall put a halt to fall ammonia applications in the region in early December, although sources said dry spreaders were still running in some locations. One Iowa contact said fields in his location froze on Dec. 6.
Ammonia pricing slipped in the region as fall demand ebbed. Sources quoted the dealer market at $645-$670/st FOB regional terminals for prompt tons, with the low in Iowa and the upper end in the Missouri market. One source said spring prepay and/or winter fill offers were on the table for as low as $630-$640/st FOB some locations last week.
One contact noted that fall ammonia volumes were up 25 percent from average in his territory. As a result of that brisk business, he said spring ammonia usage could be off 15-20 percent from normal.
Northern Plains: With fall movement over in the region, sources quoted cash market ammonia at $650/st FOB Minnesota terminals and $655-$665/st DEL in North Dakota. Spring prepay ammonia was reportedly being offered at $715/st DEL in North Dakota for very limited tons.
Effective Nov. 24, Agrium’s ammonia postings in the Leal/Beulah sales area in North Dakota firmed to $695/st FOB and $715/st DEL, up $25/st from the company’s Nov. 2 postings.
Great Lakes: Anhydrous ammonia was quoted at $680-$700/st FOB for spring prepay in the Great Lakes region, with the low end of the range quoted by Wisconsin sources.
Black Sea: As winter approaches, sources say the amount of ammonia coming out of the Black Sea is expected to slow. Part of the decline in output will be due to the diversion of natural gas for domestic consumption. Seasonal drops in demand will also prompt some plants to take turnarounds. In addition, sources point out that the shipping restrictions in the Bosporus Strait will also reduce how much ammonia can get out of the Black Sea.
Turkey restricts the passage of loaded ammonia and natural gas vessels to one at a time and only during daylight hours. With days becoming shorter, the opportunities for ships to transit the Bosporus Strait are reduced.
Asian sources say the price out of Yuzhnyy has not changed and remains in the $390s/mt FOB.
Middle East: Previous business done by a Japanese trader at $430/mt FOB is now being seen as an attempt to jack up the price. Even Arab producers now say that if a spot deal were to be done, it would not be higher than $385/mt FOB.
In the past few weeks the only business coming out of the Arab Gulf has been tied to contracts. Sources peg the market at $375-$385/mt FOB.
UREA
U.S. Gulf: While most folks were putting the granular urea barge market in the $370s/st FOB last week, there were some that said it bottomed out at the beginning of the week as low as $367/st FOB before working its way back up. Sources said sub-$370/st prices drew buyers back into the market. Reacting to this demand, sellers moved quotes upward. Many cited new trades in the $372-$375/st FOB range, with $376-$378/st FOB being achieved by the end of the week. By late Thursday, quotes for the next round of business were $378-$380/st FOB for late December/early January.
Sources said buyers are picking off freshly imported tons and that higher prices will be necessary to assure that any more come in, as U.S. prices have not been that attractive on the world stage. With most expecting 90 million acres of corn or more, they say a steady flow of imports will be necessary to meet demand. Sources also expect end-of-year buying to beat the taxman, and this impetus may also serve to boost seller price ideas as the industry heads toward the New Year.
Prills were reported to be running near granular levels, if not higher, with $380-$385/st FOB being quoted for new business.
In addition, news out of Venezuela’s FertiNitro has been sketchy. However, most reports are that the ammonia and urea plants are down, thereby shrinking available supplies.
Eastern Cornbelt: Granular urea pricing had slipped slightly. Sources quoted the dealer market at $420-$440/st FOB in the region last week, with the low in Illinois and the higher numbers in the Ohio market for prompt tons. One contact also reported spring prepay urea offered at the $420/st FOB level in his trade area.
Western Cornbelt: Although list prices for granular urea remained as high as $440/st FOB in the region, most sources quoted the dealer market more commonly in the $415-$420/st FOB range last week, with the low in Missouri and the upper end in Iowa.
Northern Plains: The granular urea market was quoted at $415/st FOB the Twin Cities and $445/st FOB Jamestown, N.D., for prompt tons, with spring prepay reportedly being offered in the $420-$430/st range FOB Minnesota terminals. Delivered urea in North Dakota covered a wide range at $465-$495/st last week, depending on supplier and point of origin, with the upper end quoted for tons shipped from Brandon, Manitoba.
Effective Nov. 24, Agrium’s granular urea postings firmed to $465/st FOB North Dakota terminals at Alton, Carrington, Colfax, Scranton, and Grand Forks, and $470/st rail-DEL in Minnesota, Wisconsin, and the Dakotas. Those postings reflected a $20/st increase from Agrium’s Nov. 2 list prices, and a $40/st increase from Oct. 14 postings.
Great Lakes: Granular urea was quoted at $420-$440/st FOB in the region, with the low reported by Wisconsin sources and the upper end in the Michigan market.
Northeast: Sources quoted the granular urea market at $410/st FOB Lancaster, Pa., and $415-$417/st FOB Philadelphia, with one regional source pegging rail-delivered urea tons in the $440-$450/st range, depending on location.
Middle East: Sources report the usual cargoes of contracted tons are moving out without a problem. Those shipments, however, are not enough to compensate for production.
Industry watchers say the price of material coming out of the region has been softening. Producers and some traders argue that the price hovers in the $380s/mt FOB. A few other traders, however, say a firm bid under $380/mt FOB would rapidly be accepted. Because of the perception by many at this time that producers might be willing to accept a $380/mt FOB deal, buyers and traders are hesitant to book a cargo at this time. Sources say global demand for urea is soft enough to encourage buyers to wait until the last minute.
Arab producers say they are getting positive responses from buyers in Australia and New Zealand. Reportedly the weather has been just good enough in these two countries to encourage more purchases into the summer.
For now, prices are pegged at $380-$390/mt FOB for both prills and granular.
Black Sea: Sources report that no major new purchases are on the horizon from the area. Sales to India and Turkey in the past month are now being loaded, leaving sellers looking for more buyers.
Reportedly, the price has begun to slip, with traders confirming sales at $375/mt FOB. Some traders have talked of a couple $370/mt FOB deals, but could not point to any specific sales to back up the reports.
This time of year is traditionally slow in Yuzhnyy, so few are concerned about the dip in prices from the region.
For now, the best estimates for material out of Yuzhnyy are pegged at $370-$380/mt FOB.
India: Despite some optimistic comments late last month, sources say Indian buying is pretty much shut down until March or April.
Sources say buying won’t start until April, when the new fiscal year starts.
Discussions within the government about changes in the urea import and subsidy programs have everyone involved with Indian business watching and waiting.
If the various government agencies can come to an agreement on new urea policies, sources figure nothing will take effect until the new fiscal year.
Sources say everything is on the table for discussion, including removal of restrictions on urea imports and drastic changes in the urea subsidy program.
Few seem to think the subsidies will be removed. The massive fluctuations in urea prices – if passed on to the farmers – would cause political problems for the government.
The most likely scenario, said one source, is for a modified subsidy system that allows for some increases in prices.
At the same time, the government is looking at removing the import monopoly from STC, MMTC, and IPL. The issue will be ensuring there is no short-term disruption in urea supply or costs.
Pakistan: Sources say that TCP has not yet received the necessary paperwork to begin importing the 250,000 mt the government says it needs for the current application season.
Asian sources say tenders for the needed tonnage will most likely be called by mid-January.
Government sources tell local media there is still hope that the governments of Pakistan and Saudi Arabia might reach an accord for another loan that will allow TCP to buy urea from Sabic without having to draw funds from the national treasury.
Sources are skeptical that even Sabic will be able to satisfy the short-term needs of Pakistan. They point to large contracts around the world that Sabic needs to fulfill. Any new commitment might force other buyers to wait for delivery.
Pakistan’s private sector – Engro Corp. Ltd., the parent company of Engro Fertilizers Ltd. (EFL) – says that mechanical installation at their new 1.2-million-mt urea plant was successfully completed at Dharki, in Sindh Province, in November. Mr. Asad Umar, Engro president, told Green Markets on the sidelines of a company event in Karachi that production from the new urea plant would start in two to three weeks to meet the country’s requirements. He requested that the government stop the gas curtailment program on urea manufacturing in order to honor the gas supply agreement with industry. He was of the view that government should have imported 200,000 mt of urea before December 2010 to meet the shortfall in the Rabi season. However, it may be imported early next year in view of the upcoming Christmas and New Year holidays. He said the private sector would not import urea due to price differences in imported and locally produced urea.
Indonesia: While the conventional wisdom is that there will be no more sales from Indonesia until April or so, some Asian traders are speculating that some tons might come on the market in the next couple of weeks.
Sources say that some of the winners in previous urea tenders may try to walk away from the deals. The price for the urea when purchased is now too high for the regional market.
Sources say if the buyers do forfeit their bid bonds and walk away, the producers will have no choice but to call a selling tender.
One trader said that even though Indonesia is entering its own domestic season, the producers do not want to be in the situation of having to explain to the government why they did not use their full export quotas.
A source said that the thinking seems to be that the government might reduce the 2011 export quota if the producers have tons left over.
NITROGEN SOLUTIONS
U.S.Gulf: Barges continue to be called a very flat and very quiet $285-$290/st FOB ($8.91-$9.06/unit).
Eastern Cornbelt: The UAN-32 market was tagged in the $325-$340/st ($10.16-$10.63/unt) FOB range out of regional terminals, also reflecting a drop from recent reports. Sources quoted the lower end of the range for prompt tons, with spring prepay offers in the $335-$340/st ($10.47-$10.63/unit) FOB range.
Western Cornbelt: UAN-32 remained in the $325-$340.80/st ($10.16-$10.65/unit) range FOB regional terminals for prompt or prepay tons.
Northern Plains: Minnesota sources quoted UAN-32 at $325-$340/st ($10.16-$10.63/unit) FOB, with the low for prompt tons and the upper end for spring prepay. Delivered UAN-28 in the North Dakota market was reported at $325-$330/st ($11.61-$11.79/unit) from Canadian shipping points, with the low for prompt tons and the upper end for prepay.
Great Lakes: The UAN market was pegged at $10.63-$10.89/unit FOB regional terminals for spring prepay.
Northeast: Sources continued to quote the low end of the UAN-30 market at the $295/st ($9.83/unit) level out of Baltimore, Md., for prompt tons. There were reports of spring prepay being offered at higher levels, with one source quoting a $305/st ($10.17/unit) FOB level for UAN-30 and another quoting UAN-32 spring prepay at $325/st ($10.16/unit) FOB Baltimore for tons delivered by June 2011.
Rail-delivered UAN-32 tons were quoted in the $330-$335/st ($10.31-$10.47/unit) range in the Northeast last week. Out of terminals in upstate New York, the UAN-32 market was pegged at $10.75/unit FOB to dealers.
UAN vessel tons were pegged at the $315/mt CFR level for inbound tons. One source said tank space on the East Coast is fairly full or committed.
AMMONIUM NITRATE
U.S. Gulf: The last done trades were called $320/st FOB. However, some sellers, citing higher inland numbers, were predicting the next round of sales could be as high as $330-$350/st FOB. Others were doubters at the $350/st FOB level, but said $330/st FOB might be doable in the near term.
Western Cornbelt: Ammonium nitrate was reported at $350-$385/st FOB in the region, with the low again in Missouri and the upper end in the Iowa market.
AMMONIUM SULFATE
Eastern Cornbelt: Ammonium sulfate was in extremely tight supply, and sources reported higher prices for any available tons. Illinois sources put the granular market at $280-$290/st FOB, up $20/st from the previous week, with the low also quoted for mid-grade tons on a spot basis. “It is an availability issue,” said one contact. “The price is high, but you can’t get any anyway.” Another source said rumors were circulating that new granular ammonium sulfate pricing would come out at the $325/st FOB or rail-DEL level in the Midwest in the near term.
Western Cornbelt: The granular ammonium sulfate market remained in a broad range at $250-$290/st FOB, with the low reported in Missouri on a spot basis and the upper end in Iowa for very limited tons.
Northern Plains: Delivered ammonium sulfate was pegged at $270-$275/st in North Dakota for limited tons, while Minnesota sources quoted granular ammonium sulfate firmly at the $280/st mark FOB terminals. Effective Nov. 24, Agrium’s granular ammonium sulfate posting moved to $275/st railDEL in North Dakota and Minnesota.
Great Lakes: Granular ammonium sulfate was pegged as high as $300-$305/st FOB or rail-DEL in the region last week for limited tons. Effective Nov. 24, Agrium’s granular ammonium sulfate posting moved to $275/st rail-DEL in Wisconsin.
Northeast: Granular ammonium sulfate pricing had reportedly firmed to $255-$265/st DEL in the region for very limited tons, up roughly $25/st from last report. Pennsylvania sources quoted granular ammonium sulfate tons FOB Hopewell, Va., at the $235/st level for the most recent pricing quotes, although no tons were available last week.
PHOSPHATES
Central Florida: Prompt sales out of Central Florida were slim last week, but producers and traders were eagerly awaiting the beginning of the prepay season later this month. The advantage to customers for making prepay deals is the savings they would get on their taxes if they are done before year’s end.
The industry will take a break between the Christmas and New Year holidays, then gear up for more prepay until the real spring season gets underway in February. Generally, prices are expected to increase as the spring season approaches, mainly because of low inventories.
Within the next couple of weeks, Mosaic’s inventories are expected to reach all-time lows – not just for the time of year, but ever. Loading product for the big PhosChem contracts for India will account for the biggest chunk of the drawdown. That will have the effect of driving up prices, as people will be just getting started buying for spring once more.
Agrifos switched from producing DAP for the market to MAP, and the move was paying off. Last week, it sold unit trains at solid prices. The company expected to have enough room left on its phosphogypsum stack to be able to continue production at least through the first quarter of next year.
Well-below-average temperatures were threatening strawberry and citrus crops in Central Florida last week, but no damage estimates had been released as of late in the week. Temperatures were expected to return to normal by week’s end, but will take another tumble by the middle of this week.
With no new prompt sales last week, the Central Florida DAP price range was unchanged from the previous week at $540-$550/st FOB. Smaller lots from traders could cost $5-$10/st FOB more. CF’s price was $540/st FOB. Mosaic’s price was $550/st FOB. MAP was listed at a premium of $10/st FOB in comparison to DAP. PCS Sales was making sales at comparable prices to the market. Agrifos’ price for truck sales was $580/st FOB for DAP and $595/st FOB for MAP, but $5/st FOB less for rail.
U.S. Gulf: After a lull during the past couple of weeks, NOLA phosphate barges began to move again last week, after the few cheap barges that had been available were snapped up.
Russian DAP was having a hard time finding a home, although the opposite was true for Russian MAP barges. Many dealers don’t want to take the DAP because of the difference in color and the lack of bin space to store a different product, according to some sources. The same was true for some farmers, although the more savvy growers don’t have a problem with the Russian variety.
Russian DAP is a high-quality product and it has been only the color that chased buyers away, said sources. Still, as a couple of sources pointed out, a small fortune could be made blending Russian with domestic DAP. To get Russian DAP sales moving, customers were being asked to take DAP in addition to their MAP buys, according to several sources.
Even though most in the industry shied away from Russian DAP, almost everyone wants to see it sold out so they will be able to sell the domestic product they have at higher prices. It was not known whether more phosphate was being shipped from the former Soviet Union, but what has already arrived should not put a serious dent in the inventory shortage expected this month and leading into the spring season.
Warehouse operations were still doing well last week, with farmers able to put phosphate on frozen ground. Prices ranged from as low as $595/st FOB in the southern areas to $605/st FOB in the north.
Crop prices were still positive late last week on the futures board. Corn for December 2011 improved from $5.245/bushel to $5.33/bushel, but December 2012 drifted south from $5.0125/bushel to $4.975/bushel. Soybeans for November 2011 were up from $11.995/bushel to $12.04/bushel, while November 2012 soybeans were running $11.51/bushel. Wheat for July 2011 increased from $7.9075/bushel the previous week to $8.50/bushel late last week, and July 2012 was $8.02/bushel.
The somewhat brighter picture for phosphates last week was reflective of the mood of the industry and the view of the upcoming spring season. Most of the transactions done last week were for in-house warehouse operations and not for resale.
Prices last week depended on two factors – when the product was purchased and what the product’s origin was. Russian phosphate bought last week was generally done in the low $530/st range, while domestic DAP was sold in the mid-$530s/st FOB to mid-to-high $540s/st FOB range.
The NOLA DAP barge market started to march northward from $525-$530/st FOB the previous week to $531-$547/st FOB last week, based on prompt sales. MAP was bringing a premium of $10/st FOB for NOLA barges and $10-$20/st FOB higher at terminals, although the premium will likely increase. Prices appeared to be firm or higher for the next month or so.
Eastern Cornbelt: Although phosphate inventories remained tight in the region, warehouse prices were slipping as fall demand slowed. “We’re still running off the floor on dries,” said one Illinois contact last week. The DAP market was quoted at $595-$605/st FOB river terminals, with MAP tagged at $605-$620/st FOB in the region. The MAP range was down from a high of $650/st FOB for sales at some locations during the heavy fall run.
10-34-0 pricing, by contrast, continued to ratchet up on the basis of firming acid prices and extremely tight supply. Sources quoted the 10-34-0 market in the region at $550-$570/st FOB “if you can find it.” That range was up some $30-$35/st from last report.
Western Cornbelt: DAP pricing slipped to $590-$600/st FOB regional warehouses, with most dealer quotes at the upper end of that range. MAP was pegged at $610-$620/st FOB river terminals, with delivered MAP in the $630-$640/st range in western Iowa, depending on time of delivery.
The 10-34-0 market, provided any spot tons could be had, was quoted at $530-$560/st FOB in the region last week, reflecting a sizable jump again from the previous week. One Iowa source said spring prepay 10-34-0 was being quoted at the $550/st FOB level in his area for “very limited” tons.
Northern Plains: Sources quoted the MAP market in a broad range at $615-$655/st FOB, with the low reported in Minnesota for prompt tons. North Dakota sources quoted MAP FOB Jamestown at $645/st for prompt and $655/st for prepay. DAP out of the Twin Cities market was pegged in the $590-$600/st FOB range last week.
One Minnesota source said spot 10-34-0 tons could still be had for as low as $500/st FOB last week, but others put the spring prepay market at $560-$570/st FOB, with the upper end of that range also quoted for some 10-50-0 prepay tons out of the Twin Cities market. Delivered 10-34-0 in North Dakota was quoted at $550/st for prompt tons last week.
Effective Dec. 1, Agrium’s phosphoric acid postings firmed to $1,100/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Minnesota and the Dakotas.
Great Lakes: DAP was pegged at $605-$620/st FOB in the region, with the low in Wisconsin and the upper end in the Michigan market. MAP was tagged at $620-$640/st FOB, where available. Sources said phosphate inventories remained very tight in the region.
Regional sources pegged the 10-34-0 market firmly in the $560-$570/st FOB range for spot or prepay, with very limited tons available.
Northeast: Phosphate inventories remained tight in the Northeast region. Sources quoted MAP at $645/st FOB Lancaster and E. Liverpool, Ohio, and $650/st FOB Philadelphia. DAP was reported at the $625-$630/st FOB level for any available tons last week.
10-34-0 was quoted solidly at the $520/st FOB mark out of terminals in upstate New York. Pennsylvania sources quoted delivered 10-34-0 at $525/st from Mount Jackson, Va., where the FOB market was quoted at $500/st.
U.S. Export: PhosChem made a relatively small sale into Central America last week of 4,000 mt at the same price it has the past few shipments, $600/mt.
The export market has still fallen short of the prices paid in the major domestic markets, and there will be no major push to increase exports as long as that situation continues.
From this week until at least the first of the year, the main activity for the export market will be loading and shipping vessels to India.
The export DAP price range was unchanged last week at a flat $600/mt, despite the most recent sale into Central America, which was at the same price as the current flat range.
Pakistan: The country consumed about 1.052 million mt of DAP between January and October 2010 compared to the year-ago 1.233 million mt, thus registering a drop of 14.7 percent. A report of Invest Finance Securities Ltd. says besides the flood factor, a 31 percent year-over-year surge in DAP prices during the first ten months of 2010 also contributed to the fall in DAP consumption. According to Mr. Asad Umar, Engro president, farmers usually apply DAP in the month of October, which has passed, so there is no need for the immediate import of DAP.
In the meantime, during January-December 2010, Pakistan so far booked orders for the import of 571,249 mt of DAP/MAP from Russia, the U.S., China, Australia, Tunisia, Morocco, and CIS at prices ranging from $358 to $605 per mt CFR. It includes Engro at 269,060 mt; Fauji Fertilizer 55,000 mt; United Agro 128,589 mt; Jafar Bros 33,000 mt; Dawood Hercules 30,000 mt; and Chawla Int’l 55,600 mt. The DAP was supplied by Dreymoor, Transammonia, Ameropa, Quantum, Multicommerce, Valency Int’l, ICEC, Morocco, Seatrade/Wengfu, and IPL. The last contract was awarded by Engro to Dreymoor for 30,000 mt of DAP at $605 CFR for Nov./Dec. shipment.
POTASH
Eastern Cornbelt: The potash market was pegged in a broad range at $500-$525/st FOB regional warehouses, depending on grade, supplier, and location. Sources continued to report delays on fill shipments.
Western Cornbelt: The potash market was tagged at $500-$521/st FOB, depending on grade, location, and time of delivery. The upper end was quoted in Missouri for white granular tons, with red granular commonly at the $515/st FOB mark. Iowa sources pegged 60 percent red potash for spring delivery in the $500-$515/st range.
Northern Plains: Minnesota sources pegged the potash market at $505-$515/st FOB warehouses and $525/st rail DEL. Granular potash FOB Saskatchewan mines ranged from $475-$480/st FOB.
Great Lakes: Potash was quoted at $515-$525/st FOB regional warehouses, depending on grade and location.
Northeast: Delivered potash was quoted in the $530-$542/st range in the region, with the upper end for white granular tons. On an FOB basis, sources quoted the potash market at $510-$525/st at regional warehouses.
SULFUR
Tampa: Last week, the Tampa spot market – buys that were based on the Tampa price – was running about $30/lt higher than the current Tampa contract market, a spot price of $190/lt.
Meanwhile, the world price remained steady after ADNOC dropped its price by $10/mt two weeks ago. The lack of sales into India and China was said to be responsible for depressing the world market.
If the world market price does not improve in January, the Tampa molten price will either remain the same or increase only slightly.
Nevertheless, the domestic sulfur market remained much tighter than the world market, and that, too, will figure into the upcoming negotiations for the first quarter.
Oil refineries were operating at higher capacity levels last week, at 87.5 percent compared to 82.6 percent the previous week, an increase of 4.9 percent of capacity.
Vancouver: Spot prices out of Vancouver declined $5-$10/mt last week as uncertainty grew about what China will do about the production of phosphate now that it imposed a 110 percent tariff on phosphate exports. If production continues at the same pace, it will need roughly the same amount of sulfur.
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 81.15 | 83.38 | 64.28 |
| CF Industries | CF | 121.71 | 123.75 | 86.62 |
| Intrepid Potash | IPI | 31.87 | 31.60 | 30.69 |
| Mosaic | MOS | 68.32 | 66.96 | 59.63 |
| PotashCorp | POT | 138.91 | 143.54 | 122.97 |
| Terra Nitrogen | TNH | 99.36 | 98.00 | 101.52 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 35.59 | 34.84 | 26.81 |
| Deere & Co. | DE | 80.55 | 78.30 | 52.64 |
| Scotts | SMG | 50.77 | 51.36 | 39.24 |
SPOT BARGE PRICES
ARA conference draws big crowd; highlights regulatory challenges, sustainability
Nearly 600 registrants were on hand in Palm Springs, Calif., for the 2010 Agricultural Retailers Association (ARA) Conference and Expo Nov. 30 through Dec. 2. The second-day attendance figure of 596 was well ahead of last year and second only to 2008’s record of 630, but conference organizers noted that a record 73 exhibitors made the trip to the Westin Mission Hills Resort in Palm Springs last week.
Attendees heard a variety of speakers, ranging from agribusiness CEOs to government policy experts and business strategists. The event also gave ARA an opportunity to present awards to key members and update conference-goers on the major policy issues facing the ag retail industry.
CF Industries Holdings Inc. President and CEO Steve Wilson outlined the factors influencing global and domestic fertilizer markets, as well as the most challenging regulatory issues facing the industry. Wilson noted that high natural gas costs earlier in the decade saw U.S. nitrogen production fall by more than 40 percent from 1999 to the 2005/06 fertilizer year. “The U.S. is now by necessity the world’s largest importer of nitrogen,” he said, but the remaining U.S. nitrogen producers are “strong and healthy.”
Wilson said demand for each of the three major nutrients will be up this year, approaching 2007 levels. The largest factor outside of the industry’s control, however, is government regulation. Wilson spotlighted efforts at greenhouse gas regulations, saying the cap and trade policies advocated by the current administration “had the potential to weaken the domestic nitrogen producers significantly.”
Wilson cautioned that “regulation by litigation” is now a bigger threat than regulation through legislation, citing EPA’s recent numeric nutrient limits for waters in Florida and the successful efforts by environmental groups to block phosphate mine permits. “The precedent of revoking or impairing previously issued permits is distressing,” he said, noting that these and other issues such as hypoxia and inherently safer technologies are areas where U.S. fertilizer producers and retailers can work together to influence policy.
Wilson noted that antidumping duties on urea imports from Russia and Ukraine have been “a point of disagreement” between CF and ARA. “We welcome fair competition from any source,” he said, but stressed that CF would not allow its business, customers, and shareholders “to be hurt by unfair trade practices.”
Wilson also talked about CF’s acquisition of Terra Industries, which was completed in April. “Retailers are now a very important group for us,” he said in reference to a customer segmentation graph of the company. “Our sales to retailers now represent as big a piece of the pie as our sales to wholesale customers.”
Asked if CF will continue its offer forward pricing to retailers, Wilson said CF’s forward pricing program “will continue to be an important tool in our tool kit.” Wilson was also queried about the factors causing fertilizer pricing volatility, answering that the wild price fluctuations of recent years are the result of “the commodity nature of the business we’re in.”
Wilson was also asked if North America would see new nitrogen capacity given the favorable market fundamentals and natural gas prices. “Economically it is reasonable to think that new production is justified,” he said. The big hurdle, however, is the regulatory climate with respect to climate legislation. Without clarity on this issue, Wilson said it is unlikely that new nitrogen production will be launched in the U.S. He also said it is unlikely that any previously idled capacity could be returned to production. “If it isn’t running now, I think it is not available to come back,” he said.
The conference also featured a post-midterm election analysis by Randy Russell, president of the agricultural policy consulting firm Russell & Barron Inc. Russell said the midterms resulted in 94 new House members and 16 new Senators, with Republicans gaining at least 64 House seats, six Senate seats, and six governorships. At the state level, Russell said Republicans now hold 57 of the 99 state legislative chambers, their largest majority since 1952. As a result, he expects a much tighter Electoral College vote in 2012.
Russell said 15 of the 28 Democrats on the House Agriculture Committee were defeated. Looking ahead to 2012, he said seven Democrats and one Republican on the Senate Agriculture Committee are up for reelection. New committee chairs and members will “complicate” the 2012 Farm Bill process, he noted, as will spending cuts related to the deficit reduction package. He added, however, that agriculture “will not likely be cut disproportionally.”
Russell said Social Security, defense, Medicare, and Medicaid make up 71 percent of the Federal budget, and these have to be addressed if federal spending is to be cut. He said USDA’s budget has doubled since 2002 due to huge increases in nutrition assistance programs, with 70 percent of the agency’s budget now funneled to these programs and only 17 percent to commodity programs.
Like Wilson, Russell said President Obama’s legislative agenda is largely dead as a result of the midterm election results, but cautioned that the administration will now rely on the regulatory, rulemaking process to advance public policy objectives. He said the major challenges to commercial agriculture include animal welfare, antibiotic use in livestock, EPA regulation, biotech approvals, competition, and the organic/local production movement.
The biggest challenge for commercial agriculture, Russell said, is one of food production. By 2050, food production must be doubled with no increase in arable land and 70 percent less water to feed a world population that will increase by 2.3 billion, with 80 percent of that growth in developing countries. “All of us in commercial agriculture … need to work together collectively to meet this challenge,” he said.
Vern Hawkins, president of the Syngenta North American Crop Production business, noted the company’s strategic focus on innovation in crop protection products and seed traits, environmental stewardship, and partnership with retailers. Hawkins highlighted what he called the “atrazine challenge,” saying it was really about more than atrazine and its continued availability as a herbicide to growers. “It is about defending a science-based regulatory approach,” he said.
The conference also featured presentations by Chamila Tissera of Deutz Corporation, Dan Burrus of Burrus Research, John Covington of Bank of the West Agribusiness, and sales management consultant Jim Pancero. In addition, Darren Coppock, ARA president and CEO, highlighted the priority policy issues for ARA.
ARA presented numerous awards at the conference, including the Distinguished Service Award to Kim Bohlander of Dow AgroSciences; the Legislator of the Year award to Reps. Blaine Luetkemeyer (R-Mo.) and Sam Graves (R-Mo.); and the Jack Eberspacher Lifetime Achievement Award to Bill Griffith, formerly of American Cyanamid and a key figure in ARA’s inception. Outgoing ARA Board Chairman Scott Ramsdell also introduced the new board chairman, Doyle Pearl.
In addition, the conference highlighted the 2010 Ag Retailer of the Year award, sponsored by Monsanto, to Central Valley Ag of O’Neill. Neb.; and the 2010 Environmental Respect Awards, presented by DuPont Crop Protection and the CropLife Media Group, with the national winner being Willard Agri-Service of Greenwood, Del. The AGCO Operator of the year award and a new Harley Davidson motorcycle went to Mike Pluimer of Ceres Solutions in Templeton, Ind.
Sunset Review begins for urea imports from Russia and Ukraine
The U.S. International Trade Commission (ITC) and the U.S. Department of Commerce’s (DOC) International Trade Administration each filed Federal Register notices Dec. 1, 2010, pertaining to the five-year Sunset Review of solid urea imports from Russia and Ukraine.
The last Sunset Review in 2005 was contentious, pitting producer-interveners Agrium Inc., CF Industries Holdings Inc., and Potash Corp. of Saskatchewan Inc. against the Agricultural Retailers Association (ARA) and other buying groups (GM Dec. 3, 2007) that sought an end to the dumping duties. The battle did not end until December 2007 after much litigation, with the ITC finally upholding the existing antidumping orders against Russia and Ukraine.
Indications are that another battle may be brewing again this year. CF Industries Holdings Inc. Chairman and CEO Stephen Wilson mentioned antidumping duty orders Dec. 1 when he spoke before the ARA in Palm Springs, saying they have been “a point of disagreement” between CF and ARA. Wilson said at times the very existence of U.S. producers has been threatened by imports from Russia and the Ukraine. “We welcome fair competition from any source,” he said, but stressed that CF would not allow its business, customers, and shareholders “to be hurt by unfair trade practices.”
The stances of Agrium, PotashCorp, and ARA were not immediately available at press time. According to the DOC filing, interested domestic parties wishing to participate in the Sunset Review must respond no later than 15 days after the date of the publication in the Federal Register. All parties must file complete substantive responses not later than 30 days after the publication date (see http://edocket.access.gpo.gov/2010/pdf/2010-30237.pdf). The ITC filing and guidelines are at http://edocket.access.gpo.gov/2010/pdf/2010-29948.pdf.
Sources note that conditions have changed quite a bit since 2005. The U.S. industry has continued to consolidate and is currently profitable, enjoying lower natural gas prices and good demand. By contrast, Ukraine now suffers from higher natural gas prices and has become a swing producer.
DOC issued antidumping duty orders on imports of solid urea from the Union of Soviet Socialist Republics (USSR) on July 14, 1987. After the USSR divided in December 1991, DOC split the orders into 15 orders applicable to each independent state. In 1999, the orders were continued only as to Russia and Ukraine, and those have continued except for an exemption of MCC Eurochem, which in 2008 successfully achieved “new-shipper” status, and thereby avoided the 64.93 percent tariff placed on other Russian and Ukrainian producers (GM May 26, 2008).
Dealer killed in farm supply accident
Cromwell, Ind.-His family, friends, and associates will remember 87-year-old Nellis D. Kunce, who was tragically killed Nov. 29 in an accident while helping unload a tractor-trailer at his farm supply business, as someone who never wanted to quit working. The founder and owner of Kunce Brothers, a fertilizer, farming, truck, and grain elevator business, he apparently got too close to the rear wheels of the truck while it was moving and was run over by the wheels. Kunce died instantly, according to the Noble County Sheriff’s Department. His son Rodger described Kunce as one of the “old-timers who was all work and no play. He was involved in the business right up to the end. He worked all his life. That’s all he knew.” In fact, his son said, Kunce drove a rig for the business up until about two years ago. The morning he died, Kunce had a spreader full of fertilizer attached to a pickup truck, all ready for his son to drive to a customer. Kunce is also survived by another son, Doug Kunce, and his wife, Rosetta Kunce, 84.
Farm income shown to be leading rebound
Washington-America’s farmers and ranchers are helping to lead the country’s economic recovery, as shown in the USDA farm income report issued last week, Agriculture Secretary Tom Vilsack declared. “All three measures of farm sector earnings have experienced a rapid rebound in 2010, and other indicators such as farm asset values ?Çô point to a sustainable recovery,” Vilsack reported. According to the numbers, farmers are earning 31 percent more for their products than they made last year. At the same time, the report shows, it’s making a real difference for America’s farm families, as indicated in predictions for household income rising 7.8 percent in 2010 from 2009. “That’s good economic news for rural America as our national economy continues to gain strength,” Vilsack asserted. “A combination of factors has made these numbers possible, including the successful implementation of the 2008 Farm Bill, the Obama Administration’s Recovery Act, and increased exports in the agricultural sector which was already one of the only major sectors of the economy with a trade surplus.” Vilsack also praised the dedication of U.S. farmers and ranchers as second to none, saying, “They have worked hard to keep their debt low and to capitalize on a broader economic recovery. And their willingness to adapt, innovate, and embrace new research and technologies has ensured their success for decades and ensures they will remain resilient in the years to come.”