Central Florida: With farmers looking for phosphate for their spring crops, traders were going to terminals to make buys to meet the needs of the dealers to whom they sell, rather than getting railcars from Central Florida last week.
Producers – mainly Mosaic – were using railcars to move product to their own warehouses and terminals, or were using their production for export sales. Export prices have been moving up during the past couple of weeks, and that was a much more attractive market than the domestic. It appeared that trend will continue.
Meanwhile, phosphate producers were in the process of negotiating new molten sulfur prices for the second quarter, which may move up just a little due to slightly higher world prices.
The Central Florida DAP price range continued unchanged last week at $460-$465/st FOB. One source said he had heard some DAP may be available as low as $450/st FOB, but that could not be confirmed.
CF Industries was posted at the $460/st FOB mark, and Mosaic was also at around $460/st FOB. MAP was listed at a $20/st premium to DAP by Mosaic in Central Florida, about the same difference as from traders. However, MAP was virtually unavailable in Central Florida.
A source said PCS Sales was selling MAP produced at White Springs at $505/st FOB, while prices at Aurora in North Carolina were $525/st FOB for MAP and $520/st FOB for DAP. The company, however, would not confirm those prices and said only that it was selling at prices comparable to the market.
U.S. Gulf: Dealers held off on buying until their bins began to hit the bottom, even though it was an early spring and the USDA estimated about 96 million acres of corn would be planted this year. Many traders reacted and held off on their buys as a result.
Last week, a strange situation resulted. NOLA DAP barges that were already on the water were bringing as much as $30/st FOB more than a barge to be loaded within the next couple of weeks.
Normally, NOLA phosphate barges that load within two weeks are considered prompt, but that was not really the case last week – and may not be for the balance of the season. Fear that the later product will not be sold before the end of the season, and that prices will decline, was driving the situation. And as a result, that may happen.
Depending on where the barge was at the time of sale, a NOLA barge could take as long as four weeks to reach its destination, and phosphate needs to be on the ground before planting begins. Farmers in some areas will be faced with the decision of waiting to get phosphate or planting without it. If they go without, their yields will suffer.
Although terminals were doing fairly well in terms of activity, they had still not hit the kind of stride that would be expected under the current scenario. Most terminal operators had raised prices somewhat, but not to the level they will within the next few weeks when the fertilizer hits the fan. Terminal prices for DAP will have to rise to meet the higher price for NOLA DAP barges.
The big differential for MAP over DAP, which had been as much as $35/st FOB, basically evaporated by late last week – even for domestic product. MAP prices at the top of the two ranges were even and only $7/st FOB different at the bottom. A lack of demand was cited as the reason for the lower price.
Crop prices began drifting a little south last week, moving down across the board. Prices for corn futures were lower compared to the previous week, falling from $5.4725/bushel to $5.465/bushel for December 2012. The corn price for December 2013 was $5.4625/bushel, decreasing from $5.4875/bushel the previous reporting period. Soybeans for November 2012 moved down to $13.7475/bushel from $13.78/bushel the previous week, and beans for November 2013 decreased to $12.5375/bushel fr