All posts by webster@kennedyinfo.com

Potash

U.S. Gulf: Potash barges were generally called $505/st FOB last week. Observers said that overall, potash continues to be a very slow mover. One said that producer curtailments signal to buyers that there is plenty of material around, so why rush to buy.

Eastern Cornbelt: Potash out of regional warehouses was quoted at $545-$567/st FOB to the dealer, depending on grade and location, with the upper end reported by northern Illinois sources for white granular tons.

Western Cornbelt:
Potash remained at $545-$560/st FOB regional warehouses, depending on grade and location. An Iowa source pegged the red granular potash market commonly at the $550/st FOB level last week.

Southern Plains: Potash was quoted at $530-$550/st FOB regional warehouses, depending on grade and location. The potash market FOB Carlsbad, N.M., was pegged in the $530-$540/st range, depending on grade.

Intrepid announced a $15/st increase to its Trio® postings, raising prices FOB Carlsbad to $330/st for standard and $340/st for granular.

South Central: Potash out of regional warehouses had reportedly slipped to $535-$545/st FOB, depending on location and supplier. Potash out of the Memphis market was tagged at $540/st FOB or lower at midweek. “There is a lot of product in producer warehouses,” said one contact.

Southeast: Potash pricing in the Southeast region was down slightly from last report. Sources quoted the warehouse market at $560/st FOB on the low end. Delivered tons were tagged at $560-$585/st in the region, with the low for import tons and the upper end from North American producers.

Sulfur

Tampa: On Wednesday, PotashCorp reached final agreements with its sulfur suppliers. It joined Mosaic, which settled several days earlier, in agreeing to pay $48/lt less than during the previous quarter for molten sulfur delivered to Tampa for the first three months of this year. The new Tampa molten price was set at $172/lt, down from $220/lt for the fourth quarter of 2011.

Negotiations actually began earlier than normal before the end of last year, but dragged on as both sides watched the world sulfur market retreat in January.

Sulfur supplies in the U.S. were outpacing demand during the beginning of the first quarter, which was part of the reason the price fell. World prices were also on the decline.

Vancouver: After Tampa molten sulfur prices for the first quarter fell sharply, the Vancouver sulfur market was expected to make a similar move downward when new contracts are finalized. One source said the new price could be as low as $150/mt FOB, but a higher price was more likely.

West Coast: Prices on the West Coast were expected to follow the Vancouver market, as the two generally remain very close.

Market Notes – Pakistan

Pakistan: Imports of urea, DAP, and other fertilizers into the country during the first six months of the current financial year July-December 2011/12 recorded an increase of 62.56 percent.

According to data released by the government, during July-December 2011/12 Pakistan imported 978,156 mt of fertilizer at a cost of $503.3 million, compared to 714,498 mt at $309.6 million in the corresponding period last year, showing an increase of 36.90 percent and 62.56 percent in terms of quantity and value in dollar, respectively, compared with the same period last year.

BioNitrogen reports deal with United Suppliers

Miami — BioNitrogen Corp., which is developing a patent-pending technology for converting renewable biomass waste into urea (GM Jan. 30, 2012) said Feb. 2 that it has entered into a letter of intent with United Suppliers Inc., Eldora, Iowa, for the purchase of up to 300,000 st of urea annually in granular or prill form. It said the binding agreement to be entered into will be for an initial term of three years. "As agricultural retailers who do business throughout the United States we are challenged to keep up with the dramatic changes that are happening in the agriculture industry," said Matt Carstens, United Suppliers vice president of Crop Nutrients. "We are committed to creating long-term relationships with both our agricultural retail dealer owners and our suppliers. We are constantly developing innovative products, programs, and services and see a close and longstanding relationship with Dr. Collins and his team at BioNitrogen." BioNitrogen said the final agreement is expected to close in the coming months and will detail, among other mutually agreed upon particulars, product specifications, method of delivery, pricing, and payment. The projected start date is currently set as 3rd to 4th quarter 2013, and will be defined in the final agreement. Further, BioNitrogen said it is understood that there will be no penalties for any delays in start-up, and both parties further agree that the number of plants constructed, and timing of such plants, may determine the initial ramp-up period. BioNitrogen says its small, modular urea plants can produce up to 124,200 st/y and be located in agricultural areas where they can easily source biomass from farmers, and in turn supply them with urea.

The Week in Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 82.20 80.15 92.45
CF Industries CF 182.30 174.05 144.99
Intrepid Potash IPI 24.79 24.98 37.36
Mosaic MOS 57.11 55.37 83.21
PotashCorp* POT 47.26 45.81 60.64
Terra Nitrogen TNH 195.96 190.00 99.79
CVR Partners UAN 30.92 28.06 N/A
Distribution/Retail
Andersons Inc. ANDE 42.75 44.32 40.93
Deere & Co. DE 87.42 87.66 92.23
Scotts SMG 47.91 47.83 51.86
* represents three-for-one stock split

Andersons completes purchase of New Eezy Gro

The Andersons Inc. said today it has completed the purchase of New Eezy Gro Inc. a manufacturer and wholesale marketer of specialty agricultural nutrients and industrial products, with operations in Carey and Sycamore, Ohio.

“The opportunity is a continuation of The Andersons’ strategy of investing in logical business, operational and geographic adjacencies," says CEO Mike Anderson. "We will extend the same value system of providing exceptional customer service and enjoying lasting relationships to customers in this specialty agriculture arena."

New Eezy Gro., including its Golden Eagle Product line, will be part of The Andersons Plant Nutrient Group.

"The addition of New Eezy Gro supports our strategy of growing our business through an expanded product offering to serve more customers," says Bill Wolf, president, Plant Nutrient Group. "We are pleased to add this new business to our group as it significantly expands our total specialty and industrial product offerings to key customer groups in important markets."

Jerry Taylor, founder and president of New Eezy Gro, adds: "As part of The Andersons, our staff is pleased to offer our products and services with the assurance of quality solutions."

New Eezy Gro was founded in 1984 and supplies liquid calcium nitrate and other specialty products to the specialty agriculture and industrial markets primarily in Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Kentucky and Pennsylvania.

Yara acquires control of Burrup

Yara International ASA reports that it has acquired 16 percent of Burrup Holdings Limited (BHL) for USD 143 million, increasing its ownership share in the company to 51 percent. Concurrently, Apache Energy has acquired the remaining 49 percent of the shares in BHL, and signed a new shareholders’ agreement with Yara.

"We are pleased to secure majority ownership in our Burrup activity and enter a closer cooperation with Apache Energy, representing another important step in Yara’s strategic growth ambitions. Today marks the end of a challenging period for what we have always regarded as a world-class asset, and we look forward to integrating Burrup fully into Yara’s global production system. Furthermore, today’s agreement allows us to intensify work on the planned technical ammonium nitrate (TAN) project in the Burrup peninsula together with Apache," said President and CEO Jørgen Ole Haslestad.

The wholly-owned BHL subsidiary, Burrup Fertilisers Pty Ltd (BFPL), operates an ammonia plant completed in 2006 and located at the Burrup Peninsula in Western Australia, with an annual production capability of approximately 850,000 mt. BFPL entered into a revised long-term natural gas supply contract with Apache Energy in November 2011.

The Burrup Nitrates project will now proceed with 75.5 percent Yara ownership and 24.5 percent Apache ownership, to construct a TAN plant with annual nameplate capacity of 330,000 mt in close proximity to the existing Burrup ammonia plant. Yara said the proposed TAN plant’s close proximity to the Pilbara mining industry together with adjacent ammonia supply gives it a distinct advantage over other ammonium nitrate suppliers. Yara has an agreement to market the entire output from the plant.

"We will re-name our Burrup activity to Yara Pilbara, marking a more active role for Yara in the region as we move swiftly to establish Yara standards of corporate governance. We now look forward to working with public and private stakeholders to shape and strengthen the long-term future of the Pilbara region," said Haslestad.

Major players conclude 1Q Tampa sulfur business

Major players have now concluded their first quarter sulfur contracts for Tampa. As a result, Tampa contract business for the quarter dropped some $48/lt to $172/lt from the fourth quarter 2011. Sources cited the cut in DAP production in the U.S. as one major factor as well as falling DAP prices. The falling prices follow an $83/mt drop in Tampa ammonia prices just last week.

For more information see the web-edition of Green Markets to be posted Feb. 3, 2012.

Richardson to acquire Great Northern terminal in Alberta

Richardson International Limited, based in Winnipeg, Manitoba, announced on Jan. 25 that it has entered into an agreement to purchase Great Northern Grain’s (GNG) grain handling and crop input retail facility in Nampa, Alberta. The sale is expected to close by Feb. 9, and current GNG employees at the Nampa facility will be offered the opportunity to join the Richardson team.

“We are excited to add the Nampa facility to our Richardson Pioneer network,” said Darwin Sobkow, Richardson’s vice president, Agribusiness Operations. “The Nampa facility will now give us a presence in both the eastern and western parts of the region, and we look forward to providing greater service to customers.”

The Nampa grain facility currently has 17,300 mt of storage capacity, a full cleaning line for wheat and canola, and a 52-car spot on the Canadian National rail line. The facility also has an 8,400-square-foot crop protection and seed warehouse for retailing crop input products. GNG recently completed the construction of 2,500 mt of new storage at the Nampa site, including a new cleaners building and new cleaning equipment.

Given current terminal capacity and the size of the existing rail siding, GNG says the Nampa terminal is able to load 50 car units – or 4,000 mt of grain – within a 24-hour period, and is capable of processing up to 200,000 mt on an annual basis.

This spring, Richardson will add an additional 14,000 mt of grain storage and increase the facility’s rail car spot to handle 104-car unit trains. The company will also add 1,200 mt of dry fertilizer storage and a 200-mt-per-hour blending system. These improvements, which will increase grain handling efficiencies and offer retail fertilizer services, are expected to be complete by fall.

The Nampa acquisition is Richardson’s fourth in the Peace River region in the last two years. In 2010, Richardson purchased crop input centers in Falher, Fairview, and Manning, and is also nearing completion of a 20,000 mt fertilizer storage shed with rail receiving at its Dunvegan facility in Rycroft, Alberta. With its 200-mt-per-hour blending capability and 300-mt-per-hour distribution rate, the new Dunvegan shed will be a distribution center for Richardson’s other Peace River sites.

“The Peace River area is a key production area in Western Canada,” Sobkow said. “Since 2007, Richardson has invested over $80 million in the Peace River region and we are committed to continuing to invest in this area to meet the growing needs of producers.”

Richardson is Canada’s largest privately owned agribusiness, and has served farmers across the country for 155 years. The company has more than 1,700 employees and is a worldwide handler and merchandiser of all major Canadian-grown grains and oilseeds. Named one of Canada’s 50 Best Managed Companies, Richardson is recognized as a global leader in agriculture and food processing.

Established in 1986, Great Northern Grain Terminals Ltd. is an independently owned and operated grain company that offers grain handling, drying, cleaning, and merchandising services to producers in Alberta’s Peace River and Killam regions. In addition to the Nampa terminal, Great Northern also operates a 7,920 mt terminal in Killam, Alberta, as well as a producer and dealer car network throughout Western Canada.