All Posts from November 10, 2014

Nitrogen Solutions

Eastern Cornbelt, Market Watch, Southeast, Southern Plains, U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf: Most continued to put UAN barges in the $235-$245/st ($7.34-$7.66/unit) FOB range. Sellers are reportedly eyeing $245/st FOB and above, with buyers honing in on sub-$235/st FOB.

In the meantime, East Coast vessel business was a tad weaker at $265-$268/mt CFR, with buyers trying to pull that number below $265/mt.

September was light on imports at 113,591 st, which was down 44 percent from the year-ago 202,630 st; July-September was actually up 40 percent, to 782,950 st from 561,247 st.

Eastern Cornbelt: Illinois sources quoted the UAN-32 market at $281-$290/st ($8.78-$9.06/unit) FOB for prompt tons, depending on location, with spring prepay offers reported in the $290-$300/st ($9.06-$9.38/unit) FOB range.

UAN-28 pricing in Ohio and Indiana remained at $254-$265/st ($9.07-$9.46/unit) FOB, with the low reported at Cincinnati and the upper end FOB Burns Harbor, Ind.

Western Cornbelt: The UAN-32 market was pegged at $280-$290/st ($8.75-$9.06/unit) FOB in the Western Cornbelt, depending on location. Sources reported little new business to test the market, however.

Southern Plains: UAN-32 was reported in a narrower range at $270-$280/st ($8.44-$8.75/unit) FOB regional production points in the Southern Plains, with the low end also quoted out of Gulf Coast terminals.

South Central: Sources quoted the UAN-32 market at $280-$285/st ($8.75-$8.91/unit) FOB terminals in the South Central region.

Southeast: The UAN-32 market remained at $253-$255/st ($7.91-$7.97/unit) FOB port terminals in the Southeast.

LOL YTD Crop Inputs results best record

News, News Briefs

Arden Hills, Minn. — Lake O’Lakes Inc. (LOL) said its Crop Inputs segment, including its WinField brand, slightly exceeded the record results for 2013 for the nine months ending Sept. 30, 2014. LOL said strong results for soybean seed and STAMPS (seed treatment, adjuvants, micronutrients, and plant nutrition) partly offset lower volumes of other crop protection products and corn seed. LOL also touted its Dairy Foods and Animal Nutrition segments, but said its Layers, or egg business, is no longer being reported as a separate segment as the Western and Midwestern assets have been sold and it continues to evaluate options for the Eastern assets. Company-wide, LOL reported nine-month net earnings of $227.9 million on sales of $11.46 billion, up from the year-ago $197.8 million and $10.81 billion, respectively. Third-quarter earnings were down, at $5.8 million on sales of $3.13 billion from the year-ago $49.4 million and $2.98 billion. LOL cited lower results primarily due to cyclical market devaluations that were anticipated following an exceptionally strong first-half.

Ethanol drives The Andersons 3Q

News, News Briefs

Maumee, Ohio — The Andersons Inc. reported third-quarter net income of $16.8 million ($0.59 per diluted share) on revenues of $952.93 million, compared with $17.2 million ($0.61 per diluted share) on revenues of $1.18 billion in the 2013 third quarter. Volumes for the Plant Nutrient Group were up almost 25 percent during the quarter, but were partially offset by lower gross profit per ton. The group posted an operating loss of $129,000 for the quarter, compared with a loss of $1.64 million in last year’s third quarter. The Ethanol Group realized solid margins due to strong export demand and lower crop prices, with third-quarter operating income rising to $21.3 million from last year’s $10.9 million. Third-quarter revenues were down in both the Grain and Ethanol groups, however, due to lower commodity prices. Most of the decrease was within the Grain Group, where the average price per bushel sold dropped by 36 percent, which more than offset an 11 percent increase in bushels sold. Income from the Rail Group was down for the quarter as well. “It should be noted that poor railroad service could impact the company in the fourth quarter,” The Andersons said. “Both the Grain and Ethanol groups rely on outbound rail service to turn their inventory, which enables them to effectively serve their customers. Further, the Plant Nutrient Group relies on inbound rail to ensure nutrients are available to meet customer needs.” The Andersons reported that it has authorized the repurchase of up to $50 million of its common stock, primarily to counter a dilution of its stock that occurred as part of its October acquisition of Auburn Bean and Grain of Auburn, Mich.

PotashCorp to pay penalty, upgrade plants

News, News Briefs, Sulfuric Acid

Washington, D.C. — Potash Corp. of Saskatchewan Inc. has reached an agreement with the U.S. Environmental Protection Agency and Department of Justice to resolve claims under the Clean Air Act. PotashCorp subsidiaries PCS Nitrogen Fertilizer, AA Sulfuric Inc., and White Springs Agricultural Chemicals Inc. are required to install, upgrade, and operate state-of-the-art pollution reduction measures, as well as install emissions monitors at eight sulfuric acid plants across facilities in Geismar, La. (one plant), White Springs, Fla. (four plants), and Aurora, N.C. (three plants). The three companies will spend an estimated $50 million on these measures, and will pay a $1.3 million civil penalty. The settlement also includes a “supplemental environmental project,” estimated to cost between $2.5-$4 million, to protect the community around a PCS Nitrogen nitric acid plant in Geismar, and requires PCS Nitrogen to install and operate equipment to reduce emissions of nitrogen oxide and ammonia. The settlement is the 10th reached under EPA’s National Acid Manufacturing Plant Initiative, and the 7th settlement addressing pollution from sulfuric acid plants. EPA said the PotashCorp settlement covers more sulfuric acid production capacity – roughly 24,000 tons per day, or approximately 14 percent of total U.S. capacity – than all previous sulfuric acid settlements under this initiative combined. The settlement also resolves alleged violations based on Louisiana law at Geismar, and the Louisiana Department of Environmental Quality will receive $350,000 of the $1.3 million penalty. PotashCorp said it chose to cooperate with authorities rather than litigate, and noted that other major producers have gone through this same process.

ConAgra appeals Magnida decision

News, News Briefs

Boise, Idaho — The Idaho Board of Environmental Quality agreed Nov. 3 to ConAgra Foods Lamb Weston’s request to submit a reply to briefs filed by Magnolia Nitrogen Idaho (Magnida) and the Idaho Department of Environmental Quality (IDEQ). As a result, ConAgra will be allowed to appeal a Sept. 19 order granting summary judgment against ConAgra’s appeal of an air quality permit given to Magnida’s $2.3 billion nitrogen complex in American Falls, Idaho. ConAgra can present oral arguments at the board’s Nov. 20 meeting and thereby continue its efforts to block Magnida’s construction next to ConAgra’s potato processing plant. The board will decide Nov. 20 whether to confirm the Sept. 19 order denying ConAgra’s appeal of the air quality permit.

Fire may cause local fertilizer/feed shortage

News, News Briefs

Caledonia, N.Y. — Fertilizer has been ruled out as the cause of a fire early this month that destroyed the main building of major agriculture supplier Commodity Resource Corp., but the result could be a shortage in parts of western New York. According to industry officials, the fire could cause farmers to drive farther to get the fertilizer and grain they need. Dean Norton, president of New York Farm Bureau, told Green Markets that the fire at the Land O’ Lakes plant is a significant loss to the agricultural community in western New York. “It will likely cause sourcing issues for our farmers who need feed and fertilizer, and may ultimately drive up transportation costs in the short term for growers who must travel farther for supplies. However, consumers should not see any increase in prices at the store because of the fire. We hope that the company can quickly assess the damage and get on with rebuilding this important facility.” The fire occurred on the Nov. 1-2 weekend. Two dozen fire companies from surrounding communities responded. Authorities reported the cause as spontaneous combustion in a grain bin, which turned out to be an asset as the grain absorbed the water from the firefighters.

Synagro Technologies – Management Brief

Management Briefs

Synagro Technologies, Baltimore, has announced that Stephen Cole has been named president and CEO. “Steve brings Synagro a proven track record of driving growth along with a great mix of leadership, inspiration, operational experience, and passion for customer care,” said Synagro Chairman Geoffrey Roberts.

Previously, Cole served as an industrial advisor for EQT Holdings/EQT Partners. He was also president and CEO of SVM Inc., a $400 million chemicals company with 800 employees.

Cole holds a B.S. in chemical engineering from Oregon State University and attended Columbia University’s Executive Education Programs in Finance and Marketing.

CF Industries Holdings Inc. – Management Brief

Management Briefs

CF Industries Holdings Inc. has announced the following appointments. Alexis Maxwell has been promoted to the role of ammonium nitrate/urea liquor product manager, reporting to David Fritzsche, director, product management, urea/ammonium nitrate. Maxwell joined CF in 2013 and previously served as an agri-business analyst within corporate planning.

Brad Weaver has joined CF as senior account manager responsible for plant nutrient sales on the West Coast (Pacific Northwest, California, and Arizona), along with Montana and Wyoming. Prior to joining CF, Weaver was a specialty sales representative with J.R. Simplot Co.

Jeremy Filer has joined the company as account manager responsible for sales of CF’s products in Minnesota and North Dakota. He previously served as an account manager with CHS Inc.

Weaver and Filer will report to Dwayne Sharun, manager, sales (West).

Zach Kutch has been appointed senior account manager, industrial sales, reporting to David Hopkins, director, sales. Kutch is responsible for sales of CF products to industrial customers throughout the U.S. He previously served as fertilizer marketing manager – U.S. Northern division with Archer Daniels Midland.

Also reporting to Hopkins is Susan Karnuth, who has been appointed to the new role of customer support manager. She joins CF from W.W. Grainger, where she served as senior manager, sales support operations. Karnuth will be responsible for developing and implementing CF’s overall customer support strategy, plans and objectives.

In other CF news, the CF board of directors has elected Theresa Wagler as an independent director of the company. Wagler, 44, is CFO and executive vice president of Steel Dynamics Inc. Her election brings CF board membership to nine.

Prior to joining Steel Dynamics in 1998, she served as assistant corporate controller for Fort Wayne National Bank and as a certified public accountant with Ernst & Young LLP.

In 2009, Wagler was listed among Treasury & Risk magazine’s picks of corporate America’s outstanding financial executives under the age of 40, and in 2012, she was included in CFO Magazine’s inaugural listing of honorees for female CFOs in the Fortune 500.

She earned her B.S. in accounting and systems analysis from Taylor University.

Ammonium Nitrate

Ammonium Nitrate, Market Watch, Southeast, Southern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf: The NOLA barge market remained quiet at $305/st FOB.

Nitrate imports have been trending lower in recent months. September imports were off 58 percent, to 34,709 st from the year-ago 81,926 st. July-September were down 21 percent, to 111,386 st from 141,151 st.

Western Cornbelt: Ammonium nitrate was $355-$365/st FOB in the Western Cornbelt.

Southern Plains: The Tulsa ammonium nitrate market was quoted at $350/st FOB for limited tons.

South Central: Ammonium nitrate was quoted in a broad range at $345-$370/st FOB in the South Central region, with the low at Memphis and the upper end in the Arkansas market on a spot basis.

Southeast: The Tampa ammonium nitrate market was pegged at $365-$370/st FOB. Sources said a large vessel is due into Tampa within the next week.

Martin sees fert sales moving from 4Q to 1Q

News, News Briefs

Kilgore, Texas — Martin Midstream Partners LP’s (MMLP) Sulfur Services segment, which includes both fertilizer and sulfur, reported operating earnings of $3.36 million on sales of $50 million for the third quarter ending Sept. 30, 2014, up from the year-ago $753,000 and $42.1 million, respectively. Sulfur volumes were up 19 percent, to 251,000 lt from 211,800 lt, while fertilizer volumes were up 16 percent, to 52,100 lt from 44,800 lt. Despite these results, MMLP told analysts that fertilizer cash flow was a negative $600,000 in the third quarter, compared to a positive $7.2 million in the second quarter. Citing a bumper corn crop and a delayed harvest, MMLP said farmers are likely to push purchase decisions into first-quarter 2015, and that spring margins may be less than those in 2014. As a result, it believes in the fourth quarter fertilizer will underperform its earlier forecast and be in line with the third quarter. Nine-month Sulfur Services operating income was up 11 percent, to $21.7 million on sales of $166.8 million from the year-ago $19.6 million and $173.4 million. Sulfur volumes were up at 645,500 lt from 614,900 lt, while fertilizer was up as well at 233,100 lt from 219,800 lt. Company-wide, MMLP reported a third-quarter net loss of $26.9 million ($0.82 per diluted limited lp unit) on revenues of $390 million, down from the year-ago $192,000 ($0.01 per unit) and $359.6 million. MMLP attributed the loss to a $30.1 million non-cash reduction in the carrying value of its 42.2 percent investment in Cardinal Gas Storage Partners LLC. The reduction occurred as a result of MMLP’s purchase of a 57.8 percent controlling interest in Cardinal in August. MMLP reported a nine-month net loss of $16.1 million ($0.54 per unit) on sales of $1.3 billion, compared to a year-ago income of $25.9 million ($0.95 per unit) and $1.15 billion, respectively.

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