Central Florida: Inventories continued to be extremely tight last week, and phosphate producers were not cutting any deals on phosphates as a result.
Last week, CF Industries matched the price rise Mosaic made the previous week, and a large trader set his price at $10/st FOB lower. Still, it’s the summer lull and very little was moving except for a few trucks within the current price range.
The current Central Florida price was on a par with the export DAP price range, after doing the math and adding for the freight cost to the port. However, a trader said it would have to be at least $20/st FOB lower to have any chance of actually selling.
The Central Florida DAP price was quoted at $490-$500/st FOB, up from the previous week’s range of $480-$500/st FOB. CF’s posted price was at the $500/st FOB mark, and Mosaic was also at $500/st FOB. MAP continued to sell at a $20/st premium to DAP, about the same difference as from traders. PCS Sales, which produces MAP at its White Springs facility in North Florida, was selling at prices comparable to the market.
U.S. Gulf: Mississippi Phosphate should be back online by the beginning of this week, or if not, then shortly thereafter. The plant was shuttered by the Occupational Health and Safety Administration (OSHA) after two deaths were caused by two separate explosions in its acid plant (GM June 11, p. 1). The OHSA investigation could take up to six months to complete.
Now that sales into Latin America have slowed, the industry was waiting for the domestic market to take off, which most believe will happen earlier this fall due to the early spring planting of corn and other crops. Assuming the harvest happens early as well, farmers will get an earlier start to fall field preparation. That’s the plan, anyway.
If dreams really do come true, phosphate sellers believe the price will rise and overtake the export market as the focus of the industry. Currently, prices for all three markets were about the same, after adjustments. Perhaps the slack period will allow inventories to rise and act as a form of price restraint by that time.
Expanding drought conditions in the Midwest could create problems for fertilizer sales, as well as for farmers, however. The flip side of the damaging drought was higher crop prices. By late last week, corn, soybean, and wheat prices were all up.
Prices for 2012 corn futures rose from $5.15/bushel the previous week to $5.5925/bushel for December. The corn price for December 2013 was $5.30/bushel, increasing from $5.2275/bushel the previous reporting period. For November 2012, soybeans moved up to $13.8025/bushel from $13.1275/bushel the previous week, and soybeans for November 2013 increased to $12.35/bushel from $11.835/bushel a week earlier. Wheat for July 2012 rose to $6.6775/bushel from $6.2175/bushel the week before, and wheat for July 2013 was listed at $7.32/bushel last week, up from $6.9975/bushel the previous week. Wheat for July 2014 was posted at $7.49/bushel.
Many in the industry believe phosphate pricing will begin to take off again during or soon after the Southwestern Fertilizer Conference in San Antonio in mid-July, but some may make moves before that time. Considering the lack of inventory and demand from the export market, prices may move much higher than anticipated, and possibly sooner. Prices have been gradually rising during June.
The prompt NOLA DAP barge price range for the week moved to $505-$510/st FOB, up from the previous week’s $500-$508/st FOB range, based on bids and offers. MAP was running $20-$30/st FOB higher than DAP. Last week, a MAP barge was sold at $525/st FOB, which was in the price range, as was another done at $530/st FOB.
Eastern Cornbelt: The DAP market had reportedly firmed to $535-$545/st FOB most warehouses in t