All posts by webster@kennedyinfo.com

Phosphates

California, Central Florida, Di-Ammonium Phosphate, Eastern Cornbelt, India, Market Watch, Mono-Ammonium Phosphate, Pacific N.W., U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida: With winter firmly gripping most of the country – not really a surprise in January – phosphate sales out of Central Florida were rare last week.

Producers were still asking $480/st FOB for DAP, but unlike the previous week, traders were bench warming and nearly out of the game due to the lack of activity and the reduction in possible profits. Some were still buying on the river system and using trucks to meet customer needs in the East.

The price of phosphate in Florida continued to be way out of the norm in relation to the NOLA DAP barge market. NOLA values were as much as $40/st FOB lower than Central Florida, which should be about $25/st FOB lower than the river.

One source noted that there has been a fall-off of interest from growers, so dealers were holding off on their orders. “They will need fertilizer (with 96 million acres of corn to be planted this year), and it’s going to be a real mess trying to get it to them when they start,” he said.

The Central Florida DAP market continued level last week at a flat $480/st FOB. Very large buyers may be about to get additional discounts, although that amount was not clear. Both Mosaic and CF Industries were posted at the $480/st FOB mark. MAP was at a $20/st premium to DAP by Mosaic in Central Florida, which was about the same difference as from traders. MAP continued to be in short supply.

PCS Sales was selling at comparable prices to the market.

U.S. Gulf: After the market yo-yoed following the Christmas Holiday, prices began to level off last week. With little in the way of new transactions, the price of a NOLA DAP barge drifted south.

Mosaic, which cut production on the river and somewhat in Central Florida, was not participating in the NOLA DAP barge market last week due to low prices. Mosaic was sticking to its posted price of $480/st FOB Central Florida. That level was not likely to attract buyers, who could get the product for as much as $40/st FOB less.

Terminals were also seeing less activity last week, as dealers were waiting for farmers to come in and place some orders. Most dealers still had product in their bins and didn’t want to buy if the price might go down even more.

Corn future prices went down last week compared to the previous week, drifting from $5.6175/bushel to $5.53/bushel for December 2012. The corn price for December 2013 was $5.466/bushel, down from $5.50/bushel the previous reporting period. Soybeans for November 2012 were a little higher as well, at $11.91/bushel from $11.8825/bushel the previous week, while beans for November 2013 were $11.815/bushel, up from $11.61/bushel the previous week. Wheat for July 2012 fell to $6.3925 from $6.455/bushel previously. Wheat for July 2013 was listed at $7.0775/bushel last week, up from $7.0375/bushel a week earlier.

The NOLA DAP barge price settled to $440-$450/st FOB last week, down from the previous week’s range of $450-$490/st FOB. MAP was fetching a better price and was more than $35/st FOB over the price of DAP. The market may remain depressed for the next few weeks, but prices should begin to rise in February when farmers start to empty dealers’ warehouses. Then, the problem may shift to logistics and how to get that much product to dealers in a short span of time.

Eastern Cornbelt: DAP remained at $510-$530/st FOB regional warehouses, with MAP pegged in the $530-$550/st FOB range. The 10-34-0 market was pegged at $740-$750/st FOB in the Eastern Cornbelt region.

Western Cornbelt: DAP was pegged at $515-$530/st FOB warehouse in the Western Cornbelt, with the low reported in the Iowa market. MAP was quoted at $535-$555/st FOB, and was in tight supply in some locations. “We can’t keep it in, and guys won’t switch

Potash

California, Eastern Cornbelt, Market Watch, Pacific N.W., Potash Muriate, Russia, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf: Potash barges were called around the $510/st FOB mark last week.

Consistent with PotashCorp’s practice of matching supply with demand, it said on Jan. 19 that its Rocanville potash operation will remain temporarily closed through March 3, an additional four weeks from earlier estimates. As previously announced Dec. 8, Rocanville began a six-week shutdown Dec. 25 that was due to end Feb. 4.

U.S. potash imports were off 22 percent in November, to 849,196 st from the year-ago 1.1 million st. However, they were off only 7 percent for the July-November period, to 3.92 million st from 4.21 million st.

Russia: Uralkali reports that combined Uralkali and Silvinit production was up 6 percent in 2011 over combined production in 2010, to 10.83 million mt.

Eastern Cornbelt: Potash out of regional warehouses was quoted at $545-$560/st FOB to the dealer, depending on grade and location.

Western Cornbelt: Potash was tagged at $545-$557/st FOB regional warehouses, with the upper end quoted for white granular tons on a spot basis. An Iowa contact pegged the red granular potash market commonly at the $550/st FOB level at mid-month.

California: The potash market remained flat at $590-$610/st FOB California warehouses, depending on grade and location. Sulfate of potash (SOP) was unchanged at $695-$705/st FOB, and potassium nitrate was steady at $1,020/st FOB for bulk tons and $1,090/st FOB for bags.

Pacific Northwest: Potash was pegged at $595-$610/st rail-DEL in the region, depending on grade and location. Potash pricing at Utah mine locations ranged from $535-$545/st FOB.

Western Canada: Potash pricing remained at $607-$632/mt FOB regional warehouses, depending on grade and location. The market to Canadian customers FOB Saskatchewan mines was pegged in the $592-$601/mt FOB range.

Sulfur

Market Watch, Sulfur, Tampa, U.S. Imports, Vancouver, West Coast

Tampa: Sulfur prices for molten delivery to Tampa had not been settled as of late last week, but that could happen sometime this week. There were no new rumors on whether either side was softening on the amount of the decrease for the new quarter. Sulfur providers sought to hold the price at $20/lt down, while phosphate producers were said to be seeking a decrease of closer to $60/lt.

Refinery capacity operating rates last week decreased 1.9 percent, from 85.6 percent to 83.7 percent.

Vancouver: Faced with what some said was a faulty business plan, Prism Sulphur announced it would sever its supply agreements at the end of 2012 at the direction of its members. The 14 members agreed to the transition and to support Prism’s conversion to a private company and become more flexible.

Prism relied on sulfur supplies from sour gas, which are diminishing, and was not allowed to sell molten sulfur in the country. It is not allowed to sell into the U.S. because it is considered a syndicate. A source said Prism had high overhead costs.

China will probably not make any changes in its sulfur buying until after Tet, the Chinese New Year.

Spot prices from Vancouver have been in the same range as new contracts, $170-$175/mt FOB.

West Coast: Spot prices were tracking the Vancouver market in the $170-$175/mt FOB range.

U.S. Imports: November imports were up 8 percent, to 188,736 st from the year-ago 174,176 st. July-November imports were 988,167 st, about even with the year-ago 983,289 st.

Nitrates in Illinois town wells prompt warning

Midwest, News, News Briefs

Maeystown, Ill. — The warning remained in effect late last week against infants six months or younger not drinking the water, while local and state authorities search for the source of high levels of nitrates in this village’s two wells, located in the middle of agricultural areas. Randy Rudloff, well operator, told Green Markets that levels are still rising – but not as fast as earlier readings, when samples showed contamination at 10.77 mg/l. “It’s been up only few tenths of a milligram in a week or so,” Rudloff reported. “We have suspended the bulk water sales to local people who don’t have city tie-ins because we can’t notify people of the possible hazards. We have our engineer working on it trying to find a solution, and they have several options we’re looking at.” He added that there hasn’t been a lot of support from state agencies “probably because their finances aren’t in good shape at this point.” Maeystown officials held a meeting at the local church to try to ease the fear that some residents may have about the nitrate contamination. The entire village of Maeystown, a small historic village in Monroe County in the metro area east of St. Louis, was placed on the National Register of Historic Places in 1978. Since that time, the small community of approximately 150 residents has become a popular site for visitors to the area.

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 79.75 74.29 91.13
CF Industries CF 171.18 166.29 140.17
Intrepid Potash IPI 25.18 24.49 35.55
Mosaic MOS 53.85 54.59 76.15
PotashCorp* POT 45.54 43.45 55.30
Terra Nitrogen TNH 191.00 179.50 99.27
CVR Partners UAN 27.98 26.22 N/A
Distribution/Retail
Andersons Inc. ANDE 42.62 42.30 39.29
Deere & Co. DE 86.94 84.44 87.63
Scotts SMG 47.73 48.72 51.79
* represents three-for-one stock split

TCP awards rest of urea needs

Breaking Industry News

The Trading Corp. of Pakistan has concluded talks with four companies to complete its urea buying needs for the remainder of the current applications season. All told, TCP will take 250,000 mt at $431.45/mt CFR based on offers made in the Jan. 19 tender.

CHS Europe provided the lowest offer at $431.45/mt CFR and set the price level for subsequent TCP bids. Under the new rules allowed by the government, the TCP team bid the CHS price to the other companies that participated in the tender. Three companies responded. Dreymoor was awarded 100,000 mt and Incitec Pivot and Global Energy were each awarded 50,000 mt. These tons, in addition to the 50,000 mt awarded to CHS fulfill the urea buying needs for Pakistan.

CPR announces major deal with Canpotex

Breaking Industry News

Canadian Pacific Railway Ltd., Calgary, on Jan. 23, announced a 10-year agreement with Canpotex Ltd. Under the agreement, CP will be Canpotex’s principal Canadian railway, transporting a large majority of potash shipments to Canpotex’s main terminal in Vancouver, B.C. In addition, in conjunction with Union Pacific, CP will transport all Canpotex potash shipments to Portland, Ore.

To move Canpotex’s potash more efficiently and reliably, CP said it has enhanced the infrastructure of its north main line and western corridor, which handle potash service originating from 10 Saskatchewan mines. Improvements made under CP’s Multi-Year Plan are reducing average route miles and improving the capacity and responsiveness of the CP network. CP’s infrastructure enhancements are part of its four-year capital investment program, approved by the board of directors in the fall of 2010.

"Selection of CP to move the majority of our product to port is a reflection of the strength of our partnership and CP’s ongoing commitment to efficiency in the supply chain and in helping to realize our growth objectives," said Steve Dechka, Canpotex’s President and CEO.

"By upgrading our network, and through the ongoing implementation of our long train strategy, CP is continuing to strengthen our world class potash supply chain," said CP’s President and CEO Fred Green. "We are now running potash trains up to 170 railcars in length, further improving service, capacity and efficiency."

"CP is pleased to provide the resource and infrastructure commitments necessary to support Canpotex’s continued growth," added Green. "To better serve key customers like Canpotex, CP recently announced a $1.1 billion to $1.2 billion capital program for 2012 that includes the second phase of our $250 million north main line project. These value-enhancing investments position Canadian Pacific for long-term growth with strategic customers."

The 10-year agreement between CP and Canpotex commences July 1, 2012. Terms and conditions of the agreement are confidential. The agreement improves unit revenues for CP, including a fully responsive fuel mechanism, to support investments for continued excellence in service execution and capacity for further growth. The agreement also reflects increased efficiencies and cycle time benefits realized from the fewer miles to port and a new "hook and haul" arrangement.