All posts by webster@kennedyinfo.com

Phosphates

Central Florida: Weather in the eastern U.S. continued to be near perfect last week, and the harvest was underway, but farmers still had a long way to go. Dealers continued to hold off making buys, hoping prices will go down. However, that was not the case on the river last week, where they did both.

Several traders said they believed sales would remain slow and dealers may wait until spring to make a move.

The Central Florida market price range last week continued unchanged at a flat $410/st FOB. Large customers should get better prices. Although no new spot sales were found, sources indicated prices would continue to be weak and may decline more, as they have on the NOLA river system. MAP continued to bring a premium of $20/st FOB over DAP at Central Florida.

U.S. Gulf:
NOLA DAP prices moved up a couple of dollars from the bottom of the previous week’s price range, but also retreated the same amount from the top of the range last week.

Because the water levels on the Mississippi River were still lower than normal last week, the chances of the upriver freezing earlier than normal were higher.

The usual closing date for the upriver has been about Oct. 15, but cold weather could shut it down sooner this year.

Docks at Memphis and Blytheville were benefitting from recent rains and hoped to be open for at least a few days late last week and early this week.

However, unless areas that feed the river get another heavy dose of rain, the river south of St. Louis could also be no better off than the upriver by mid-October.

The U.S. Drought Monitor’s map showed overall improvement with the nation’s dry ground situation last week. Almost all of Kansas was no longer in the "extreme drought," which has plagued it since early 2012. Colorado’s drought condition improved greatly, but the devastating floods that destroyed more than a thousand homes and killed a number of people and livestock were not a welcome change.

As of last week, about 7 percent of the nation’s corn crop had been harvested, along with around 3 percent of soybeans. Those were both below the average for that time of year, when 16 percent of corn and 5 percent of soybeans would already have been harvested.

On the futures market, prices for corn and soybeans were down compared to the snapshot from the previous week, but prices for wheat were on the rise. For December 2013, corn was $4.57/bushel, a decrease from the $4.605/bushel for the previous reporting period. Corn for December 2014 was posted at $4.9675/bushel, $0.02 lower in comparison to $4.9875/bushel the previous week. The soybean price for November 2013 was $13.1725/bushel, less than the $13.5825 bushel a week earlier. Beans for November 2014 were posted at $11.7925/bushel, lower than the $11.91/bushel the previous reporting period.

Wheat for December 2013 improved to $7.275/bushel, which was stronger than the $7.0125/bushel the previous week. Meanwhile, wheat for July 2015 was posted at $7.16/bushel, higher than $6.9775/bushel from the last report.

Warehouse and terminal DAP prices remained flat to weak, and MAP was running $25-$30/st FOB higher than DAP. The price gap between the two will likely shrink with the arrival of OCP product. Although the first of those vessels had already unloaded, most of that product was sold prior to arrival, but that was not believed to be the case for the next vessels. MAP activity ranged from slow to moderate last week.

Sources said phosphate prices will likely fall somewhat after the fall season ends, unless the export market kicks into gear. Now that the Indian rupee has stopped its free fall, the export market could begin to stabili

Potash

U.S. Gulf: Most continued to call recent business within the $345-$350/st FOB range, with some speculating that if you really wanted to buy product you could pull it in the $330s/st FOB.

Eastern Cornbelt:
The potash market was steady at $390-$400/st FOB regional warehouses in the Eastern Cornbelt.

Western Cornbelt:
Potash pricing continued to slide in the Western Cornbelt, with sources quoting the dealer market at $380-$395/st FOB in the region. The low end of the range was confirmed in Missouri on a spot basis, while an Iowa contact pegged the common dealer market at $390-$395/st FOB in his trade area last week.

Southern Plains:
Sources said potash prices had fallen to $385-$390/st FOB regional warehouses. Reference prices FOB Carlsbad, N.M., included $395/st FOB for 60 percent standard, $400/st FOB for 62 percent standard and 60 percent granular, and $407/st FOB for 62 percent granular.

South Central:
Potash pricing continued to slip in the South Central region, with sources quoting the regional warehouse market at $380-$385/st FOB last week, down another $10/st from last report.

Southeast:
The potash market was quoted at $390/st FOB and $400/st rail-DEL in the Southeast, down roughly $10/st from last report.

India:
MMTC called a tender for 155,000 mt of MOP to close Oct. 3. The tender calls for 55,000 mt on a firm basis with an option of another 100,000 mt in 25,000-30,000 mt lots. Shipment is to be spread out between October 2013 and March 2014.

Sources say this tender is like others MMTC has held for MOP in the past. The buying house is looking to see how the market reacts to the tender. In the past MMTC has not taken tons under the MOP tenders.

Sulfur

Tampa: The potential price for molten sulfur delivered to Tampa for the fourth quarter was a topic of discussion last week. The opinion of the buyers was that prices should fall $30-$40/lt, but sellers were of the opinion it would either rollover or fall somewhere between $5-$20/lt.

Buyers point to more sulfur available from the Gulf Coast, because prices there have fallen along with demand for prill for export. They also believe sulfur from Alberta will continue flowing south, even though at a loss for each ton. Those who can block do, but not all can.

Sellers said if the price did fall by $30-$40/lt, the export market would become much more attractive and sulfur would be diverted from Tampa to other destinations. That would matter more if phosphate was selling, and selling at a better price.

Technically, negotiations should begin this week.

Refinery operating capacity rates fell 2.2 percent last week, from 92.5 the previous week to 90.3. Last year for the same week, the rate was 87.4 percent, and the four-year average was 88.3 percent.

The third-quarter price for molten sulfur delivered to Tampa was $95/lt.

Vancouver:
Sulfur prices at Vancouver were not firm and were falling into the range of $50-$70/mt FOB last week.

West Coast: Prices on the West Coast for sulfur were following Vancouver and were in the $53-$73/mt FOB range.

U.S. Gulf:
The price range for Gulf prill moved down to a range of $60-$65/mt FOB, due to its export bias, but exports have fallen off during the past few months. Less was going to prillers, which was boosting supplies of molten sulfur to Tampa.

Benelux:
The Benelux price range for the third quarter was $140-$155/mt.

ADNOC:
The ADNOC price was set $80/mt FOB, down from the previous $90/mt FOB.

Industry looks for better days ahead

Montreal–In the lead up to the TFI World Conference in Montreal, some industry stalwarts predicted most participants would be slightly depressed over the state of the global fertilizer markets. Instead, the approximate 750 participants, while noting the current slump in prices, spent Sept. 22-24 in meetings and social gatherings to discuss better days ahead. At the first day’s breakfast session, new TFI President Chris Jahn called for a round of applause in appreciation of former TFI president Ford West, who was in attendance. Jahn came to TFI after heading up the National Association of Chemical Dealers and more than ten years in Washington. Throughout the conference Jahn took as many opportunities as possible to sit and talk with the attendees. Jahn told Green Markets how struck he was with the “global reach of the industry.” He promised the TFI participants that he would keep up the pressure on Washington over issues directly affecting the industry. The two breakfast sessions featured Jan Stanmeyer and the co-founders of Free the Children, Craig and Marc Kielburger. Stanmeyer, an award winning photo-journalist, presented pictures from his National Geographic photo essay End of Plenty about food insecurity. He noted the need for proper soil management and heaped praise on the fertilizer industry for making it possible for more food to be produced in the same acreage. The Kielburger brothers established their organization originally to fight child labor around the world. Since its inception, Free the Children has included education, health and food security in their global programs. The Kielburgers were introduced by Potash Corp. of Saskatchewan Inc. President and CEO Bill Doyle who noted that PotashCorp has given Free the Children a $9.6 million multi-year grant to help villages improve their agricultural output and learn better soil conservation methods.

New 14K-ton dry fertilizer facility opens

Jansen, Neb.—The Jansen Dry Fertilizer Facility held its dedication and open house last Tuesday, Sept. 24, marking the completion of a $5 million project that began with a ribbon cutting last October. The facility will house 14,000 tons of fertilizer in its eight bins and four micro bins. Several hundred people gathered at the Farmers Cooperative in Jansen to celebrate. “The company has invested a lot in this,” Jansen Branch Manager Rolan Knust said. “They definitely take a lot of pride in this area that they’re willing to spend the money. That says a lot about the farmers.” Fairbury Agronomy Branch Manager Mike McLain said there had been a need for several years for a facility with this capacity. The 43 co-ops in the region, which stretches from Hanover, Kan., to Dorchester to McCool Junction back to Beatrice, funded the project. “We expanded and our sales have been really good, so we just needed more capacity to handle our growth,” McLain said. In the past, the co-ops kept the fertilizer in smaller bins in various locations. The group chose the Jansen location because suppliers could deliver the fertilizer by rail, making it more cost-effective. Construction required 5,300 sheets of plywood and 1,870 cubic yards of concrete, with 140 tons of metal rebar. “It is a state-of-the-art facility,” McLain said. “It is a great asset for the area.” McLain said trucks will begin dumping fertilizer within the next couple of days. The fertilizer will arrive from the suppliers by rail and will be in one of the bins in less than 15 minutes. The totally automated machines that complete the order even have their own email address, enabling Eric Howard, the facility manager, to send orders directly to the machine. Howard said he is still in the process of learning how to properly control the machines.

Explosion reported at Agrium CPS location

Bangor, Iowa—An explosion was reported at an Agrium Inc. Crop Production Services location in Bangor, Iowa, in northwest Marshall County, around 4:30 a.m., Saturday, Sept. 21. An Agrium spokesman said the company was treating the incident as a heater explosion resulting in a structure fire that was extinguished quickly. There was no impact to the products on site. No injuries were reported and no one was at the facility at the time.

APC to cut K production, inks deal with China

Amman–Jordan’s Arab Potash Co. has reduced potash production due to uncertainties in the global market. The company informed the Amman Stock Exchange that operations will be approximately 20 percent of capacity. APC Acting General Manager William Flahr said the company will return to producing at full capacity “when potash markets can support such a decision.” APC added that it will continue to fulfill its commitments from inventories. APC had reported higher production levels in the first half of the year but this was more than offset by sharply lower prices. APC potash production totaled 976,000 mt in the first half of 2013 compared to 972,000 mt during the corresponding period last year. Production volume was 91 percent of the target of 1.069 million mt. Meanwhile, APC and Sinochem Group signed a three year potash supply agreement. Under the terms of the agreement Sinochem Macao was appointed the exclusive channel for all APC sales of MOP to China for the years 2014-2016. The volumes agreed to were around 600,000 mt/y. The agreement was signed in Beijing Sept. 18 during a visit to China by Jordan’s King Abdullah.

SAIC values LSB project at $118 M

McLean, Va.–Science Applications International Corp. (SAIC) recently valued its recent contract with LSB Industries Inc. (GM Aug. 19, p. 1) at $118 million. LSB puts the total cost of the project between $250-$300 million. SAIC will provide engineering, procurement, and construction (EPC) services, managing the design and construction of an ammonia plant and associated facilities at LSB’s El Dorado Chemical Co.’s facility in El Dorado, Ark. The single-award cost-plus fixed-fee contract has a two year period of performance. SAIC will provide EPC services, including foundations, structural steel, electrical, and instrumentation; cost control and scheduling; quality control; and overall project construction for the 1,350 st/d ammonia plant. This ammonia plant will provide feedstock for other units at the facility, with excess production used to supply an ammonia pipeline or other customers.

TFI aids paperless reporting project

Washington–The Fertilizer Institute has announced that its board of directors acted this week to approve a $25,000 contribution to be used in development of a web portal aimed at helping small businesses in the fertilizer industry achieve enhanced operational efficiency. It is anticipated that the funding from TFI will help companies with limited access to technology participate in the Paperless Tonnage Reporting Project, a larger effort to develop and implement a mechanism to facilitate reporting of fertilizer sales to state fertilizer control officials. Full implementation of a paperless system by 2016, will afford cost efficiencies while ensuring greater accuracy in reporting at both the state level and nationally, where the data is used to track the sales and use of fertilizer and to calculate the efficiency of fertilizer use. “Having timely and accurate fertilizer tonnage data is necessary to our advocacy efforts in the environmental arena,” said TFI President Chris Jahn. “Access to this information will greatly enhance our ability to communicate with policymakers and other stakeholders about farmers’ fertilizer stewardship.” Today, 47 states require fertilizer and feed tonnage reporting, registration, and payment of fees and taxes – with 47 different sets of rules and forms. In many states, reporting is still achieved using hard-copy, paper-submitted forms, creating an administrative burden for both companies and the state governments. The Paperless Tonnage Reporting Project aims to provide cost-savings to both the states and the industry by using an industry standardized format, streamlining the reporting process, and utilizing electronic communication technologies. After nationwide implementation, all industry companies and states will benefit from a uniform reporting system that is faster, less error prone, and more efficient both in terms of financial and human resources. The project is a collaborative effort between TFI, AgGateway, the Agricultural Retailers Association, and the Association of American Plant Food Control Officials.

Mixing plant permit request withdrawn

Greenville, Texas—An air permit request to construct a fertilizer mixing plant at a Martinek Grain location here (GM Sept. 23, p. 14) has been withdrawn. City officials had concerns about the downtown location for the plant, particularly the use of anhydrous ammonia, and were seeking a hearing prior to the issuance of a permit. Martinek hopes to eventually revise the project after educating city officials about its safety. Mears Fertilizer, El Dorado, Kan., was seeking to construct a portable polyphosphate blender on the property, with the liquid product to be stored in three silos on site.