All Posts from February 10, 2014

Phosphates

Central Florida, Eastern Cornbelt, Jordan, Market Watch, Middle East, Oceania, Phosphate Rock, Southeast, Southern Plains, Triple Superphosphate, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: It was business as usual in Central Florida last week – which at this time of year meant there was hardly any business at all.

Sources said available phosphate was next to nonexistent through March, though some were gearing up to bring in April shipments at a $450/st FOB price point for DAP, with MAP commanding an extra $10/st FOB. Even those were expected to be severely restricted, possibly limited to as few as four railcars of DAP and MAP combined.

Actual transactions for the week were limited to a handful of reported truck sales into the state carrying a $460/st FOB price tag.

Mosaic raised its posted price for Central Florida DAP to $430/st FOB.

The parched Northeast received a mixed blessing as Winter Storm Nika swept through the region, bringing a mix of snow, sleet, and freezing rain.

Mostly light snow was reported as a rumored super storm failed to materialize, but locally heavy snowfall was seen in parts of New York and Massachusetts. Freezing rain shut down areas of eastern Pennsylvania, and a state of emergency was called in New Jersey due to a winter mixture.

Heavy rain in the South wiped out much of the region’s pre-drought conditions, and a reported 2-4 inches of rain in south-central Florida all but erased a large zone of abnormal dryness that had lingered for months.

Planting season in Florida is expected to kick off as early as late February.

The price of DAP in Central Florida rose to a range of $430-$460/st FOB, up from the previous spread of $415-$450/st FOB, based on most recent sales and Mosaic’s posted price. Sources expected MAP to bring a $15-$20/st FOB premium, but no transactions were reported.

U.S. Gulf: Trading remained relatively thin on the NOLA barge market, though prices moved closer toward the high end of the previous reporting period’s range. Prompt sales were disclosed at $438-$452/st FOB for the week. The low numbers were achieved early in the week. Late-week trading shot to $452/st FOB however, and rumors circulated that a transaction had concluded at $455/st FOB.

A confirmed MAP transaction with a late-February loading date was valued at $470/st FOB.

Sources pointed to slow terminal sales as one explanation for the overall limited volume of transactions, but expected trading to pick up as the weather warms and end-users come out to play. Supply was also said to be tight, and PotashCorp announced they were sold out through the first quarter.

Terminal prices were quoted in a range of $460-$470/st FOB, with the bulk of sales coming from those located in warmer climes.

Conditions on the Mississippi River were mostly unchanged from the previous week. Lock closures were reported in Wisconsin, Illinois, and Missouri. Rock removal at Thebes, Mo. was still underway, and passage was expected to be limited to nighttime hours for about a week.

Ice prompted tow restrictions on the Illinois River, and Gulf activity was delayed when a 10-mile stretch of the Mississippi above Head of Passes was closed while the U.S. Coast Guard searched for a sunken 48-foot tugboat that posed a potential hazard.

A 4 p.m., Feb. 6 check on the commodities market found corn, soybeans, and wheat considerably elevated after unofficial reports indicated international supplies were lower than analysts’ expectations.

For March 2014, corn was $4.43/bushel, an increase from the $4.335/bushel for the previous reporting period. Corn for May 2014 was posted at $4.485/bushel, higher in comparison to $4.395/bushel the week before. December 2014 corn contracts checked in at $4.5825/bushel, an increase from the previous week’s $4.5025/bushel.

The soybean price for March 2014 rose to $13.2575/bushel last week from $12.75/bushel a week earlier. Beans for May 2014 were posted at $13.1175/

Greenway approves merger with CHS

Breaking Industry News

Voting members of Greenway Cooperative, a diversified ag retailer based in Rochester, Minn., have approved a merger with CHS Inc. The proposal passed with a 79 percent approval and will become effective April 1, 2014, pending appropriate due diligence by both organizations and final approval by the CHS board of directors.

“Our vision and purpose lines up well with CHS and our members recognized that,” said Gary Hoffman, board chairman, Greenway Cooperative. “This is the right thing for us to do for our customers and our employees.”

“This is a good match for both companies,” said Rick Jahn, board chairman, CHS Ostrander-Grand Meadow, which is slated to combine operations with Greenway Cooperative to form a new business unit for CHS.

“This is a strategic decision that will bring enhanced services and market opportunities to area producers,” said John McEnroe, executive vice president, CHS. “It’s one more way we demonstrate our commitment to helping our owners grow their businesses.”

CHS said patrons of Greenway should expect a smooth transition, including continuity of staffing at its locations. Tim Clemens will serve as general manager for the new business unit of the CHS Country Operations Division.

CHS acquires Terral RiverService

Breaking Industry News

CHS Inc. announced it has acquired the fertilizer business and related fertilizer assets of Terral RiverService, Lake Providence, La. Terral RiverService is a river transportation service company specializing in the bulk storage and handling of dry and liquid materials along the Mississippi River system, the Gulf Intracoastal Waterway and inland waterways of Louisiana and southern Arkansas.

CHS will integrate nine Terral RiverService locations, including eight river terminals, into its existing crop nutrients business. CHS is a leading wholesale distributor of crop nutrients to locally-owned cooperatives and independent farm supply retailers across the U.S.

"This acquisition aligns with CHS growth plans for strategic business and infrastructure expansion into the lower Mississippi River region," said Cheryl Schmura, CHS vice president, crop nutrients. "CHS will serve agricultural supply dealers throughout the region with a full range of dry and liquid N-P-K and specialty fertilizers, backed by global fertilizer supply and logistics expertise."

Thirty-six employees of Terral RiverService will become CHS employees. Former Terral RiverService fertilizer customers are being personally notified of the ownership change.

"CHS was the right fit as we considered companies that could take this part of our business to the next level," said Tom Gattle, Terral RiverService co-founder, president and CEO. "We are so proud of how our employees helped us grow the fertilizer business over the past 22 years. We are confident that CHS will further improve operations and services, creating an overall positive impact on our communities."

Terral RiverService will retain ownership of its port and marine operations, aggregates and cottonseed businesses.

NH3 leak reported at Pryor; one injured

News, News Briefs

Pryor, Okla. — An anhydrous ammonia line broke loose Feb. 6, injuring a maintenance worker at the Pryor Chemical Co. facility. The release hit him in the face and caused first- and second-degree burns, but no eye injury, according to Pryor parent LSB Industries Inc. The worker was taken to a hospital in Tulsa and was expected to be released Feb. 7, according to LSB Vice President of Safety and Environmental Compliance John Carpenter. He said the estimated 1,000 pound release was reported to the U.S. Environmental Protection Agency. The leak was quickly contained and the facility was not evacuated, though a neighboring company did initially shelter-in-place.

Uralkali, BPC talk

News, News Briefs

Moscow — OAO Uralkali CEO Dmitry Osipov and Belarusian Potash Co. CEO Elena Kudryavets met in Moscow Jan. 31, according to Bloomberg, which cited BPC’s spokesperson. She said they discussed “current issues of cooperation not related to the market.” Sources saw this as another step toward the two potash giants ironing out their differences after Uralkali’s July 30, 2013, exit from their joint marketing efforts.

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks


Producer Symbol Price Week Ago Year Ago
Agrium AGU 86.39 87.57 114.16
CF Industries CF 229.93 232.58 225.92
CVR Partners UAN 17.59 17.74 26.98
Intrepid Potash IPI 15.47 15.01 23.32
Mosaic MOS 46.21 44.93 61.26
PotashCorp POT 33.26 31.24 42.03
Rentech Nitrogen RNF 17.52 18.41 47.80
Terra Nitrogen TNH 158.99 154.38 242.50
Distribution/Retail
Andersons Inc. ANDE 84.98 83.68 47.53
Deere & Co. DE 85.43 86.58 92.69
Scotts SMG 56.40 60.86 44.17

Mosaic shifts operations to Big Bend

News, News Briefs

Tampa — The Mosaic Co. has shifted operations away from Kinder Morgan-owned terminals at Port Manatee and Port of Tampa to the company’s own Big Bend Marine Terminal, Mosaic announced late last month. Pam Baylor, Mosaic director of planning and warehouse services, said the move was a cost-cutting measure and had been in the works for over two years. Consolidation of the terminals to a single facility will expedite order fulfillment, according to Big Bend terminal manager Ron Kobosky. The 1.5 million st/y capacity terminal is expected to serve both the Gulf export and NOLA barge markets. Mosaic’s contracts for the Kinder Morgan terminals expired in 2013.

Agrium denies union claims

News, News Briefs

Calgary — Agrium Inc. denies that it has made a decision about laying off former Viterra Inc. employees in Canada. A union representing the employees claims Agrium is preparing to lay off as many as 100 of 116 employees of Agrium’s Crop Production Services (CPS) Canada operations in Regina. Agrium says many of the former Viterra employees will be offered jobs elsewhere within CPS. Agrium spokesman Richard Downey called the union’s assertion “bunk,” and said the union sent a letter with unsubstantiated claims to the local press. Agrium finalized its purchase of major Viterra assets last fall.

U.S. Nitrogen faces water/wastewater woes; rural infrastructure not ready for new plant

Featured, News

While U.S. Nitrogen LLC’s construction of a new $220 million liquid ammonium nitrate plant is well underway near rural Mosheim, Tenn., having broken ground nearly two years ago, the local water district and wastewater treatment plant will not be sufficient to meet its needs. Initial plans had called for the company to get all of its water from the local district and send it all to the local wastewater treatment plant.

U.S. Nitrogen, a unit of Austin Powder, Cleveland, Ohio, is now seeking permits to build a 10-mile pipeline from the Nolichucky River from which to source its water for its manufacturing process. The line would be built along Greene County existing roadway right-of-ways. Once obtained, the river water would have to undergo the company’s own treatment process before being used. Once used, the water would again need to be treated before going back to the river. When it does, it would add about 20 pounds of ammonia per day to the stream. U.S. Nitrogen says this is within U.S. Environmental Protection Agency standards. Environmentalists, however, are concerned as the Nolichucky already has an “impaired” river designation from the EPA. In total, the company now says it will need 1.45 million gallons per day and will pipe 570 gallons back to the river, according to the local Greeneville Sun.

U.S. Nitrogen would still source some potable water from the local water district for its offices. This wastewater from this would go to the treatment plant.

The Sun reported that the local wastewater treatment plant in July 2013 received a notification of violation and the Town of Mosheim was fined $20,000. Reportedly, the facility had not used appropriate sand filters for four years. The small town, population 2,362, was riveted four years ago when two treatment plant employees were killed in a plant accident.

U.S. Nitrogen still has the option of sending its treated river water for disposal in Lick Creek, piggy-backing on water disposed from the local treatment plant. However, the company is concerned about the prospects for the treatment plant’s permit renewal in 2015, as well as the extent of its permit limits.

Actress and environmental activist Park Overall is keeping close tabs on the project and complains that the $20,000 fine essentially shows that the local treatment plant has had no oversight by the Tennessee Department of Environment and Conservation and EPA for four years. Overall is also troubled that by late 2013 permit filings for two new plants at the site, one by Yara North America to make calcium nitrate, and another to by an unnamed company to make liquefied carbon dioxide (GM Dec. 16, p. 1). She argues that U.S. Nitrogen should have made its expansion plans known when it made its original filing in 2011.

In the meantime, citizens who were unhappy about the speedy 2011 rezoning and approval of the project by the Greene County Planning Commission and Greene County Commission will soon have their day in court. The citizens say they were not given proper notice of the rezoning. According to the Sun, the case is slated to go to trial March 17. However, in a county with sustained unemployment of over 10 percent, there would be a lot of pressure to continue with the project, which has been under construction since February 2012. It is due to being production this year. The initial project promised some 80 full-time jobs, and the two new plants proposed for the project in late 2013 should add more.

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