All posts by webster@kennedyinfo.com

Ammonium Sulfate

Eastern Cornbelt: Granular ammonium sulfate was unchanged at $365-$375/st FOB Eastern Cornbelt terminals.

Western Cornbelt: Granular ammonium sulfate was steady at $365-$375/st FOB in the Western Cornbelt region.

California:
Ammonium sulfate pricing remained at $350-$385/st FOB in California.

Pacific Northwest: The ammonium sulfate market was steady at $360-$380/st FOB and $370-$390/st DEL in the Pacific Northwest, depending on grade and location.

Western Canada: Granular ammonium sulfate was quoted at $450-$455/mt DEL in Western Canada.

Phosphates

Central Florida: The Central Florida phosphate market was in the grip of the holiday schedule last week, and little or nothing was sold on a prompt basis on the spot market. Many in the industry took the entire week off, and vacations may continue until the first of the year.

Mosaic’s announcement that it will cut production by 250,000 tons during the first quarter was not completely unexpected. Domestic sales of phosphate have been well below normal, even for this time of year. However, most of the reduction will take place at the company’s production facility at Donaldsonville, where the company uses imported rock for manufacturing. Although Mosaic’s plants at Central Florida will see somewhat less production, the reduction will not be significant because of the need to produce product for export.

The Central Florida DAP price range was unchanged last week at $540-$575/st FOB, but that could easily change when people return to work. CF’s price was set at $570/st FOB, and Mosaic also was posted at $570/st FOB. MAP was listed at a $20/st premium to DAP by Mosaic in Central Florida, 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: With domestic phosphate sales down significantly for most of the fall season, rumors persisted that Mosaic would cut production. Just in time for the new year, the company announced that it will cut production 250,000 tons during the first quarter of the year.

Most of the reduction will be made at Mosaic’s plant at Donaldsonville on the river, where business has been especially lackadaisical. A source said Mosaic had been attempting to sell the ammonia it produces for the facility to manufacture phosphate. However, none of the company’s processing plants will be completely shuttered.

Earlier in December, the company was buying NOLA DAP barges, which it hoped would have the effect of bolstering the sagging market and providing additional supplies. At the time, the market had slipped $50/st FOB or more in a single week. Even that did not help.

The lackluster fall came as a surprise to many, because farmers fared well last season and had plenty of money to spend on fertilizer, equipment, and seed. Normally, they would have spent a portion of that on prepay for their fertilizer needs.

In some cases farmers did pay their dealers for prepay, but did not necessarily ask for any specific product. Dealers, in those cases, put the money in the bank and paid the farmers interest on what they received – generally around 5 percent per year. "That’s not a bad deal (for the farmers)," one trader said, "not with interest rates down."

Corn prices were up last week compared to two weeks earlier, moving to $5.80/bushel for December 2012 and $5.62/bushel for December. Soybeans for November 2012 were also higher at $11.9675/bushel, while beans for November 2013 were $11.83/bushel, up from $11.2625/bushel two weeks earlier. Wheat for July 2012 was also higher at $6.765 from $6.185/bushel previously. Wheat for July 2013 was listed at $7.295/bushel last week, up from $6.6775/bushel two weeks earlier.

Hours after Mosaic’s curtailment announcement, prices on the river began to rise and were up $25/st from their low point at the beginning of the reporting period. One trader speculated that the price could return to $500/st FOB or better within the next week or two.

Based on actual sales of prompt barges, the NOLA DAP barge price range fell last week to $425-$450/st FOB, compared with $450-$475/st FOB two weeks earlier. The lowest prices were for transactions early in the reporting period. MAP sales were quoted at $450-$455/st FOB.

Expect to pay more this week for DAP and MAP.

Eastern Cornbelt:

Potash

U.S. Gulf: Barges continued to be called $510-$520/st FOB, with the lower numbers being attributed to Israeli product. There was some suggestion that even lower prices could be found, but there was no confirmation.

Eastern Cornbelt: Potash out of Eastern Cornbelt warehouses was quoted in the $560-$570/st FOB range to the dealer in late December.

Western Cornbelt: Potash remained in the $550-$570/st range FOB regional warehouses in late December.

California: Potash continued to be quoted in the $590-$610/st range FOB warehouses in California, depending on grade and location. The sulfate of potash (SOP) market was steady at $695-$705/st FOB in the state, and potassium nitrate was unchanged at $1,020/st FOB for bulk tons and $1,090/st FOB for bags.

Pacific Northwest: Potash pricing had reportedly slipped to $595-$610/st rail-DEL in the Pacific Northwest, 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 Western Canada warehouses, depending on grade and location. The market to Canadian customers FOB Saskatchewan mines was pegged in the $592-$601/mt FOB range.

India: Contractually, prices paid by Indian buyers are supposed to go up $60/mt for the first quarter of 2012 per the agreement with Canpotex Ltd. struck last summer (GM Aug. 8, 2011). The fourth-quarter price was $470/mt CFR; the first-quarter 2012 is $530/mt CFR. In the meantime, Indian buyers, citing currency woes, have tried to get sellers to lower prices on phosphate and potash. So far, potash producers have turned a deaf ear to those requests, though they have not been able to garner further price increases.

Sulfur

Tampa: Negotiations officially started three weeks ago for first-quarter sulfur prices for molten deliveries to Tampa. However, since virtually everybody took the previous week off, nothing happened.

For the phosphate side, that was probably beneficial. Supply had been a little ahead of demand when the talks started, but late last week Mosaic announced it was cutting back production by 250,000 tons, which means it will not need as much sulfur and its bargaining position for sulfur prices became stronger.

Before the cutback announcement, speculation was that the price would fall $15-$20/lt. That will probably come up a bit short of the final result, however.
Refinery capacity operating rates were not available late last week.

The Andersons Inc. – Management Briefs

The Andersons Inc. has named Harold Reed to the new post of chief operating officer, effective Jan. 1, 2012. He has been with the company since 1980, most recently serving as the president of the Grain & Ethanol Group since 2001. Reed currently also serves as the chairman of the National Grain & Feed Association (NGFA). He received his undergraduate degree in accounting from Miami University, Oxford, Ohio, and earned his master’s degree in finance from The University of Toledo. In 2005 Reed completed the University of Michigan’s Executive Program.

With his new position, Reed will be responsible for the Grain, Ethanol, Plant Nutrients, Rail and Turf & Specialty groups. The Retail Group will continue to report to CEO Mike Anderson.

With Reed’s appointment, the company will also separate its Grain and Ethanol operations into individual business units, prompting the following moves:

Dennis Addis will now serve as the president of the Grain Group

Neill McKinstray will now serve as the president of the Ethanol Group

William Wolf will now serve as the president of the Plant Nutrients Group

Addis, who joined The Andersons in 1971, most recently served as the president of the Plant Nutrients Group since 2001. He currently serves on the board of directors and the executive committee of The Fertilizer Institute (TFI). He earned his undergraduate degree in business administration from The University of Toledo and also attended the Stanford Executive Program for Growing Companies in 2008.

McKinstray, who has been with The Andersons since 1976, most recently served as the vice president and general manager of the Ethanol Division since 2005. He currently serves as the vice-chairman of the Renewable Fuels Association (RFA). He earned his undergraduate degree in business administration from the University of Illinois, Urbana-Champaign, and has also participated in post-graduate seminars and executive course work at a number of universities.

Wolf, who joined The Andersons in 1994, has most recently served as the vice president of Supply & Merchandising in the Plant Nutrients Group since 2008. He currently serves on several committees with TFI. He earned his undergraduate degree in agriculture economics from The Ohio State University, Columbus, and has taken post-graduate courses at Rockhurst College, Kansas City, Kansas, and the University of Michigan, Ann Arbor.

Additionally, Anne Rex has been named vice president & corporate controller for The Andersons. Rex, who has been with The Andersons since 1994, most recently served as the assistant corporate controller since 2002. She earned her undergraduate degree in business administration from Adrian College, Adrian, Mich., and completed the Advanced Executive Program with the Kellogg School of Management in 2007. She is a Certified Public Accountant and a Certified Management Accountant.

Lastly, Joseph Needham has been named director, Corporate Business Development & Public Policy, reporting to Reed.

CHS Inc. – Management Briefs

CHS Inc. has made some major promotions, effective Jan. 1, 2012. Brian Schouvieller has been named senior vice president of Grain Marketing, North America. In his new role, Schouvieller will be responsible for overseeing all aspects of CHS grain marketing and crop nutrients operations in North America. He began his CHS career as an intern and joined the company following his graduation from the University of Minnesota in 1991. Throughout his career, he has held a variety of merchandising and management positions within Grain Marketing, including a one-year assignment in Mexico. In his current role, he will manage operations in the Asia-Pacific region and Mexico. Additionally, he led the recent expansion effort associated with the Asia-Pac region. Schouvieller represents CHS on the TEMCO board of directors.

Rick Browne, senior vice president, Grain Marketing, assumes responsibility for leading the expansion and growth of CHS Asia Pacific business platform and will be based in the CHS Singapore office. In early 2011, he had assumed management responsibility of CHS Crop Nutrients. He began his career with CHS as a grain merchandiser in 1979 after graduating from the University of California – Davis. He has held a variety of Grain Marketing merchandising and management positions in St. Paul, as well as in Portland, Ore. He was named a senior vice president in 2001, and has led the CHS North American Grain Marketing platform since that time. Browne currently represents CHS on the board of directors for TEMCO, Horizon Milling, LLC, and the National Grain and Feed Association.

Land O’Lakes Inc. – Management Briefs

Land O’Lakes Inc. has announced several executive leadership changes, including some to its ag business unit. Effective Jan. 1, 2012, Jim Fife will become executive vice president and group executive of Ag Businesses. He will report to LOL President and CEO Chris Policinski. Reporting to Fife will be Rod Schroeder, executive vice president (EVP) and chief operating officer (COO), Winfield Solutions-Crop Protection Products; Mike Vande Logt, EVP and COO, Winfield Solutions-Seed; Dave Hoogmoed, EVP and COO-Feed; and Karen Grabow, senior vice president, Business Development Services for the cooperative system.