Central Florida: Wet weather in regions served by the Central Florida phosphate market had not let up as of last week, dampening both fields and phosphate demand. Sources remained optimistic for November sales, however. “(Farmers) have such big equipment nowadays, all we need is a week or 10 days of good weather to really get things moving,” one trader said.
Sources called the market $430/st FOB for rail-loaded DAP, while truck sales into the Southeast were called $435/st FOB. MAP was thought to maintain its $20/st FOB premium. Mosaic’s posted prices were unchanged at $435/st FOB for DAP and $455/st FOB for MAP.
Speculation continued to mount that price decreases could accompany future business. A dearth of concluded transactions was the only things keeping prices afloat, one source said. “Pricewise, I think if you had an order, Florida phosphate would slip another $5 or $10,” he said.
Despite recent rallies in the price of corn futures, some observers speculated that the market could fall based on the grain price. “If somebody bid 1,000 tons, a price cut would happen,” one trader said. “But there’s no reason to lower it if no one’s buying.”
The Central Florida DAP market was quoted at $430-$435/st FOB. MAP was called $450-$455/st FOB.
U.S. Gulf: Mississippi Phosphates Corp. filed for Chapter 11 bankruptcy protection last week, citing a need for debt relief and fresh sources of credit.
The Pascagoula-based company curtailed phosphate production late in the week of Oct. 20 as funds reportedly ran lean, but operations were expected to resume as renewed financing was made possible by the filing.
The cash infusion will permit Miss Phos to continue production at least through the end of the quarter, industry sources believed. But what happens next is anyone’s guess.
Speculation ran the gamut, from the company eventually emerging from bankruptcy and continuing production indefinitely – as Miss Phos did when former parent corporation Mississippi Chemical Corp. filed Chapter 11 papers in 2003 – to a hasty shutdown once quarterly contractual obligations are fulfilled.
“(Miss Phos) found another lender to keep them alive to chew through their remaining inputs onsite,” said one industry observer, “but my feeling is that Chapter 11 will come back and be a Chapter 7 by the end of the year.”
Most agreed the filing would have little or no direct impact on the market. Miss Phos’ 850,000 st/y DAP production capacity represents just a small part of the larger NOLA barge market, sources said.
Others, however, said the filing could have ancillary effects. “It’s true (Miss Phos) was just a drop in the pond, but all of their product was sold domestically – none was exported,” one observer noted. “I don’t know if it will do anything to raise prices, but if nothing else it should send some positive vibes to the market. More than actual supply, I think the news story itself will have the most impact.”
Activity on the barge market remained muted. Warehouse and terminal operators reported growing demand as the corn harvest slogged on, to the point that barge market activity primarily served to supply warehouses, sources said.
Despite continuing to trail the five-year average by double-digit percentage points, progress in the corn harvest was steady enough to give many industry players hope for a more or less “normal” November, with “strong” warehouse demand expected through the next four weeks.
The unpredictable cost of noncontract barge freight was reported to be on the wane, which could go a long way toward establishing firmer price agreement in the market.
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