All Posts from August 11, 2014

Urea

Bangladesh, China, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, Northeast, Northern Plains, U.S. Gulf, Urea, Vietnam, Western Cornbelt

U.S. Gulf: Prompt granular barges were stronger last week at $340-$365/st FOB, with the higher number for loaded barges. All August granular was called $335-$345/st FOB, with Chinese or open origin at $305-$310/st FOB. September was traded in the $330-$345/st FOB range, according to sources.

Both Agrium and CF offered analysts some insights on urea imports last week. Agrium said the Chinese supply/demand situation looks a lot tighter than it did a year ago, with prices increasing pretty rapidly. Agrium said China may now be oversold, and may not have produced enough for its own domestic season, which will get going in September. Obviously, a firmer situation in China may mean fewer imports to NOLA.

CF noted that North American urea prices continue to be above international levels. It expects that a large amount of urea imports in August and September may bring the North American price structure into parity with the world market, with prices as low as $310-$330/st FOB in the second half. With weaker natural gas prices in the U.S. – now under $4.00/mmBtu – CF says its urea costs are only about $150/st, so it will still make pretty healthy margins even if NOLA is under pressure.

And while Chinese imports were up in the first half, CF and Agrium said Chinese prices are moving up. CF also noted that lower international prices also caused high cost producers in Romania, Lithuania, Estonia, and China to take down production. The ongoing woes in Ukraine, as well as gas costs in Pakistan, Trinidad, Argentina, and Egypt, were cited as additional factors that can throttle back international supplies even more.

New prill business was reported to have been concluded again at $335/st FOB, though others said firm offers were still on the table for as low as $325/st FOB.

Eastern Cornbelt: Urea remained in tight supply in the Eastern Cornbelt, but terminal pricing levels had slipped somewhat. Sources quoted the market in a broad range at $395-$425/st FOB regional terminals, depending on location.

Western Cornbelt: The granular urea market was pegged in the $400-$425/st FOB range for any spot tons in the Western Cornbelt region, but availability was extremely limited.

Northern Plains: The granular urea market was tagged at $400-$415/st FOB in Minnesota and North Dakota for prompt pull, depending on location. North Dakota sources quoted delivered urea in the $395-$415/st range last week, with the low end for limited summer fill offers that were reportedly still on the table in early August.

Great Lakes: Sources pegged the granular urea market in a broad range in the Great Lakes region, from a low of $395/st FOB Courtright and spot Wisconsin terminals, to a high of $440/st FOB for prompt tons out of inland warehouses in Michigan.

Northeast: The granular urea market was quoted at $410-$420/st FOB for limited tons in the Northeast, down some $10/st from last report.

China: Prilled and granular urea prices keep moving up. Sources now report prills are going for $270-$275/mt FOB, while granular is edging past $320/mt FOB.

The big push on the prilled price seems to be driven by growing domestic demand coupled with the awards made to India in the last tender. The domestic side of the push is coming from what one trader called a “mini-season” start-up. Prilled urea is needed for wheat applications now instead of later in the year, say sources.

At the same time urea is needed for direct application, some is also being called for by NPK manufacturers to fulfill growing demand for their product.

All in all, say sources, demand is greater than planners had expected. The new demand has taken up the reserves built up before the export wi

Transportation

Market Watch

U.S. Gulf/River: Dredging operations to combat shoaling on the upper Mississippi River continued throughout the week at Mile 724-815. Dredges labored site-to-site to clear the navigation channel, which was estimated at just nine feet of depth, though sources pegged Mile 756.5-757.5 as the worst stretch. Workers planned to conclude operations and reopen the channel by Aug. 10.

Shipping operators warned of additional navigational concerns resulting from low water conditions, however. Without any additional rainfall, river levels at St. Louis, Mo., were predicted to drop to (+)2.9 feet by Aug. 19 from current levels of (+)7.5 feet. The stage at Memphis, Tenn., was predicted to fall to (-)0.2 feet by Aug. 8 from (+)1.5 feet, and sans rainfall could continue to trickle down to (-)1.0 feet by Aug. 20.

Also on the upper Mississippi, delays of 16-18 hours were reported at Melvin Price Lock, with an average of eight boats queued for the auxiliary lock throughout the week. Main chamber repairs were expected to wrap up Aug. 12.

Lock 53 on the Ohio River was projected to resume operation on or before Aug. 10, while main chamber maintenance at Lock 52 will commence on Aug. 18. Wait times of 8-12 hours were reported in advance of the closure, and transit delays were expected to increase for boats entering and exiting the Ohio, Tennessee, and Cumberland Rivers when work begins.

Auxiliary locks will be available during main chamber repairs to the Dashields and Montgomery Locks, slated to go offline Aug. 11 and Aug. 18, respectively, and tow limits continued for southbound transit through the Olmstead Locks and Dam Project.

Marseilles Lock on the Illinois River reported delays of 1-2 hours, while the Peoria and Lagrange Locks, said to have resumed locking as of Aug. 7, reported respective delays of 3-4 hours and 8-12 hours.

In the Gulf area, waits were observed at Industrial Lock (6-8 hours), Bayou Sorrel Lock (4-6 hours), Port Allen Lock (1-2 hours), and Algiers Lock (four hours).

Crops/Weather

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

As of 4 p.m. on Aug. 7, corn and wheat were rising on the futures market compared with the week before, but soybeans were on the decline.

Corn contracts for September 2014 clocked in at $3.595/bushel, a slight jump from the previous week’s $3.57/bushel. December 2014 corn was $3.7125/bushel, up from $3.67/bushel the week before, while corn for March 2015 firmed to $3.8425/bushel from the prior week’s $3.795/bushel.

The November 2014 soybean price fell to $10.78/bushel from $10.82/bushel a week earlier. Soybeans for January 2015 were put at $10.865/bushel, down from the previous week’s $10.9025/bushel, while soybeans for March 2015 were posted at $10.94/bushel.

Wheat for September 2014 was $5.615/bushel, up considerably from the previous week’s $5.3025/bushel. December 2014 wheat was also up, at $5.79/bushel from the prior week’s $5.5025/bushel. Contracts for July 2015 wheat were listed at $6.185/bushel, also above the $5.9575/bushel they traded at the week before.

Eastern Cornbelt: Abnormally cool temperatures in July helped push parts of the Eastern Cornbelt into the record books, with several locations postings their coolest July ever, including Urbana, Ill., Indianapolis Ind., and Decatur, Ill.
Temperatures statewide in Illinois also tied the record for cool July weather, with the monthly average coming in at 70.3 degrees, or five degrees below average.

The combination of cool temperatures and adequate rainfall benefited the region’s corn and soybean crops. USDA on Aug. 3 assigned good or excellent ratings to fully 77-81 percent of the corn and soybeans in Illinois, along with 70-76 percent of the acreage in Indiana and Ohio.

Western Cornbelt: Sources said heat and humidity returned to parts of the Western Cornbelt last week after an unseasonably cool July. Missouri posted its second coolest average temperature on record for the month of July, coming in at 72.8 degrees, or roughly 4.8 degrees below normal.

The combination of cool temperatures and a wet June did much to alleviate drought in the region, with only abnormally dry to moderate drought conditions persisting across southern Nebraska and western Missouri in early August.

The region’s crops benefited as a result, with good or excellent ratings assigned to 72-82 percent of the regional corn crop and 70-74 percent of the soybeans. Missouri’s rice crop was 59 percent headed and 65 percent good or excellent as of Aug. 3, while 60 percent of the state’s cotton crop registered as good or excellent.

Northern Plains: Crop development in the Northern Plains was catching up to the normal pace despite cool summer temperatures and a wet spring.

USDA placed fully 74-79 percent of North Dakota’s corn and soybeans in the good or excellent categories as of Aug. 3, along with 69-71 percent of the acreage in South Dakota and 65-69 percent in Minnesota. As for small grains, some 81-84 percent of North Dakota’s spring wheat and barley were rated as good or excellent last week, compared with 78 percent in South Dakota and 48-54 percent in Minnesota.

Great Lakes: The Great Lakes region finally got some heat in early August, but temperatures so far this summer have been noticeably cool, with one source describing weather conditions as “downright chilly” for most of June and July.

The cool weather has delayed corn development in the region, with one Michigan source reporting last week that “a lot of corn in the central part of the state and north is not tasseled yet.” Crop conditions were good overall, however, with fully 72-77 percent of the regional corn acreage rated as good or excellent last week, along with 65-71 percent of the soybeans.

N

Sulfur

Bangladesh, Market Watch, Sulfur, Tampa, U.S. Gulf, Vancouver, West Coast

Tampa: Mosaic’s planned solid sulfur melting facility, scheduled to go online at New Wales, Fla., remained a hot topic in the marketplace.

Recent claims of solid sulfur shipments secured and delivered ahead of the facility’s 2015 opening at a “substantial premium” to domestic levels were disputed by some in the industry, with sources stating that the internationally sourced cargoes were instead procured at price points on par with or below domestically sourced material.

The shipments were believed earmarked for pre-established commitments rather than to safeguard against potential supply irregularities.

Indeed, nearly all sectors report continued booming supply, and refinery outputs for the calendar year remained at record levels.

Refinery utilization for the week ending Aug. 1 fell to 92.4 percent, according to the U.S. Energy Information Administration, a drop of 1.1 percent from the week before. The rate represented the second consecutive week of falling outputs after having crested in the second week of July, the traditional operating peak of the U.S. refinery calendar.

The week’s 92.4 percent utilization of capacity beat the 90.9 percent posted for the same period in 2013, however, and outpaced the five-year average of 90.8 percent.

The price of molten sulfur delivered to Tampa was $136/lt DEL for the third quarter.

U.S. Gulf: Recent spot sales to Brazil carried reported netbacks of $145-$150/mt FOB, a bump up from the previous level of $140-$145/mt FOB.

Vancouver: Offshore sulfur sellers continued to assess the impact of the recent Chinese typhoon on the marketplace. As many as 260,000 mt of sulfur were reported to have been damaged or destroyed in the storms.

Sources reported the Chinese market to have stalled in the low $180s/mt CFR, and spot levels at Vancouver were believed to remain unchanged at $140-$170/mt FOB. Third-quarter contract prices were quoted in a range of $140-$160/mt FOB.

Sulfur sold from Alberta conceded netbacks of (-)$20-$80/mt.

West Coast: The price of West Coast sulfur was quoted in a range of $140-$145/mt FOB, an increase from the previous week’s $135-$145/mt.

Benelux: The third-quarter price of Benelux sulfur was $158-$172/mt.

ADNOC: The ADNOC price of sulfur climbed to $175/mt for the month of August, a $5/mt hike from the July price of $170/mt.

Bangladesh: BCIC has issued an international tender for 15,000 mt of rock sulfur/bright yellow sulfur/bright yellow sulfur crude CFR Chittagong Port. Bids are due on Sept. 22, 2014.

Potash

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Potash Muriate, Sulfate of Potash Magnesia, U.S. Gulf, Western Cornbelt

U.S. Gulf: Potash barge prices continued to firm. The last done business was now called $367-$368/st FOB, with new seller offers at $375/st FOB. Sources reported virtual panic at some inland locations, where buyers were afraid they would not be able to source potash in the near term.

Many said the higher price ideas were demand driven, and not due to higher producer postings. Some said major producers are behind on deliveries. In addition, Agrium has its Vanscoy mine down for unexpected repairs and a planned tie-in for its major upgrade (GM Aug. 4, p. 11). As a result, the company expects the total outage to take 3-4 weeks longer than the originally planned 14-week turnaround.

In the second half, Agrium expects gross profit from potash to be a negative $40 million, and it expects to have to purchase a significant amount of potash in the second half. Purchases will drop off in the first quarter as it adds new capacity. It is targeting full-year 2015 production of 2.1 million mt, and once that is achieved it does not expect any purchases.

Correction: The potash barge price for the Aug. 4 issue p. 5 Price Scan should have read $362-$367/st to reflect what was reported in the text.

Eastern Cornbelt: Potash pricing from producers was firm at $390-$400/st FOB regional warehouses in the Eastern Cornbelt, depending on grade and location, with inventories described as thin. As the week progressed, however, there were reports of some suppliers moving to the $410/st FOB level for red and $417/st FOB for white granular tons.

Western Cornbelt: Sources continued to report low inventories for potash, urea, and other products. “Logistics are still slowing things up,” said one contact. “A month ago it was high water. Now we’re fighting low water, plus slow rail service.”

Low potash inventories were of particular concern, with reports of firming prices at inland warehouses as concerns grow that replacement tons will simply not be positioned in time for fall demand. “We have seen significant uptake in orders this week,” said one source. “So demand has picked up, and with that prices seem to be moving up.”

While warehouse postings from potash producers remained at $390/st FOB for red and $397/st FOB for white granular, some secondary suppliers in the region moved their dealer prices up to $410/st FOB for red and $417/st FOB for white as the week progressed.

“Producers have zero to sell at any price, so basically are not taking any new orders,” said one regional contact. “Word is that they will be at least 30 days behind, and probably more like 45-60 days behind trying to deliver summer fill. That puts them still delivering summer fill in November.”

The SOP Magnesia market was tagged at $465/st FOB in Iowa in early August.

Northern Plains: Potash pricing FOB Saskatchewan mines remained at $345/st for standard, $350/st for granular, and $357/st for soluble sales to U.S. customers, with delivered pricing in the North Dakota market pegged in the $390-$400/st range.

Sources quoted the granular potash market also at the $390-$400/st FOB level out of regional warehouses in August. Some suppliers, however, were reportedly talking of a price hike for October and November shipments, with warehouse prices moving to the $410/st FOB level for red and $417/st FOB for white granular.

The SOP Magnesia market was quoted at the $465/st level FOB Winona, Minn.

Great Lakes: The potash market was quoted at $390-$400/st FOB warehouses in the Great Lakes region depending on grade and location, with inventories described as thin. Wisconsin sources said pricing for October/November shipments was up

Phosphates

Bangladesh, Central Florida, China, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Phosphate Rock, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: Phosphates offered by producers remained tight, sources said, and reseller inventory wasn’t much better. DAP was said to be difficult to come by, while MAP was effectively impossible.

“Product is real tight out of Florida,” one source said, “not that we could sell it today anyway.”

DAP prices were said to hold firm at $435/st FOB or above despite a dearth of both nearby interest and available supply. Resellers held out hopes that bottom-dollar corn prices stemming from the current record crop wouldn’t scare off too many end-users from September and October purchasing.

Phosphates shipped by truck were reportedly maintaining their premium over rail-loaded product.

Prices on the Central Florida DAP market were static in a range of $435-$440/st FOB, with truck-loaded product representing the upper level of the range. MAP was expected to command an additional $20/st FOB over DAP.

U.S. Gulf: Aside from a handful of confirmed transactions for the week, not much was traded on the NOLA phosphate market. “A couple of barges here, a couple of barges there,” one source said.

At least one sale, reportedly a barge of high-quality Chinese material scheduled for Aug. 13 loading, hit the $450/st FOB threshold, however.

One producer serving the NOLA market raised prices in anticipation of increased demand in the weeks ahead. Offers were floated at $455/st FOB for August and September, while October DAP was offered at $465/st FOB.

MAP was said to exhibit signs of severe tightening due primarily to intense offshore demand, and was believed to command a roughly $30/st FOB premium to DAP.

Some sources saw the recent typhoons in China as a possible driver behind the DAP price appreciation. Industry watchers estimated that roughly 200,000 mt of phosphates were lost or destroyed in the South China Sea storms, a significant amount that may have delayed or disrupted many traders’ import plans.

At a minimum, anticipated supply was reduced, and traders playing to market fundamentals expected to see rising price levels.

A portion of the market believed the typhoon and its effects may have been exaggerated, however. “I personally think the typhoon was overhyped,” one source said. “China is still supplying India at lower levels than other markets. They don’t seem tight on product.”

Though the typhoon may have affected some more strongly than others, many traders reported vessel delays of a week or less resulting from the storm.

Sources also decried the continued barge freight price explosion of recent weeks as a major contributor to the less-than-stellar volume of material traded.

Buyers have taken to requesting a $10-$15/st FOB price cut to compensate for prohibitive freight rates, sources said. With few, if any, sellers willing to accept such terms, purchasers opted to delay their acquisitions for a few weeks in hopes that shipping costs would return to more palatable levels.

Despite the perception of logistics costs dragging down the nearby market, some industry players believe the problem has been oversold in the market. Many traders have their freight prices locked in at contracted rates, sources said.

“Like the typhoon, it’s being blown up so someone can take advantage,” one trader said. “Everyone with low contract freight can now push higher freight to their buyers. It’s just a few import cargoes that will have to pay double rates.”

Prices on the NOLA barge market were quoted in a range of $442-$450/st FOB for the week, a slight uptick from $442-$448/st FOB in the previous reporting period. MAP, in high demand from international bidders, was quoted at a $30/st FOB premium to DAP.

Ammonium Sulfate

Ammonium Sulfate, Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, Western Cornbelt

Eastern Cornbelt: The granular ammonium sulfate market had reportedly slipped to $265-$280/st FOB in the Eastern Cornbelt, with the low reported out of the Burns Harbor market last week.

Honeywell’s Aug. 11 ammonium sulfate postings include granular at $280/st FOB Danville and Granite City, Ill., and mid-grade at $250/st FOB Danville and Byron, Ill. Honeywell’s rail-DEL postings in Illinois will move on that date to $290/st for granular and $260/st for mid-grade.

Ammonium thiosulfate pricing was down slightly as well. Sources quoted the dealer market at $345-$350/st FOB in the Eastern Cornbelt, with the low FOB Burns Harbor.

Western Cornbelt: The granular ammonium sulfate market was pegged at $270-$280/st FOB in the Western Cornbelt for prompt pull, down slightly from last report.

Honeywell’s Aug. 11 ammonium sulfate postings include granular at $280/st FOB Dubuque and Sioux City, Iowa, with rail-DEL tons in Iowa moving on that date to $290/st for granular and $260/st for mid-grade.

Ammonium thiosulfate was pegged at $320-$345/st FOB in the region.

Northern Plains: Ammonium sulfate pricing was down slightly from last report, with sources quoting the granular market at $275-$280/st FOB and $285-$290/st DEL in the Northern Plains. Honeywell’s Aug. 11 ammonium sulfate postings FOB Roseport, Minn., include $280/st for granular and $250/st for mid-grade, with rail-DEL postings in Minnesota moving on that date to $290/st for granular and $260/st for mid-grade.

Ammonium thiosulfate remained at a nominal $330-$340/st FOB in the region for prompt pull, although North Dakota contacts reported that delivered tons could be had on a spot basis in early August for as low as $295/st from Canadian shipping points.

Great Lakes: The granular ammonium sulfate market was down from last report at $270-$280/st FOB in the Great Lakes region. Honeywell’s Aug. 11 granular ammonium sulfate postings include $280/st FOB Wisconsin terminals at Amherst Junction and Prairie du Chien, with rail-DEL postings in Wisconsin moving on that date to $290/st for granular and $260/st for mid-grade.

Ammonium thiosulfate remained at $345-$355/st FOB in the region, with the Webberville, Mich., market pegged at the $350/st FOB mark.

Northeast: Granular ammonium sulfate had reportedly fallen to $270-$275/st FOB warehouses in the Northeast, with delivered tons pegged at the $277-$280/st level to points in Pennsylvania from Hopewell, Va.

Ammonium Nitrate

Ammonium Nitrate, Market Watch, U.S. Gulf, Western Cornbelt

U.S. Gulf: Players argued that near-term barge prices are in the $310-$330/st FOB range, though finding any actual new trades was difficult. Sources did report forward September trades at $300/st FOB, however, which would indicate that the previously done $340/st FOB is no longer in the ballpark.

Western Cornbelt: Ammonium nitrate remained at $380-$400/st FOB in the region for the last done business, but inventories were very low in early August.

Nitrogen Solutions

Eastern Cornbelt, Great Lakes, Market Watch, Northeast, Northern Plains, U.S. Gulf, UAN, Western Cornbelt

U.S. Gulf: The UAN market remained quiet, with the market inactive. The last done business was called $235-$245/st ($7.34-$7.66/unit) FOB. Sources continued to argue that the next trade could occur anywhere within that range, though others said fourth-quarter price ideas are closer to $245-$250/st FOB.

The last done East Coast vessel business continued to be called $250/mt CFR.

Eastern Cornbelt: Illinois sources pegged the UAN-32 market at $290-$295/st ($9.06-$9.21/unit) FOB for prompt tons in early August. The UAN-28 market was quoted at $250-$265/st ($8.93-$9.46/unit) FOB for fill or prompt tons, with the low reported at Cincinnati and the upper end FOB Burns Harbor, Ind.

Western Cornbelt: The UAN-32 market was pegged at $294.40-$310/st ($9.20-$9.69/unit) FOB regional terminals in the Western Cornbelt, with the upper end reported in Missouri on a spot basis. Iowa sources quoted the common dealer market in early August at $9.20-$9.40/unit FOB for prompt tons.

Northern Plains: The UAN-28 market in the Northern Plains was quoted at $280-$295/st ($10.00-$10.54/unit) FOB Minnesota terminals for prompt pull, with fill tons pegged at the $315/st ($11.25/unit) DEL level in the North Dakota market on a spot basis.

Great Lakes: Michigan sources reported minimal interest in UAN fill, with the UAN-28 market pegged at $255/st ($9.11/unit) FOB Courtright and $265/st ($9.46/unit) FOB Michigan terminals for prompt or fill tons. Wisconsin sources quoted the prompt UAN-32 market in early August at the $295/st ($9.22/unit) FOB level.

Northeast: The UAN-32 market had reportedly slipped to $250-$260/st ($7.81-$8.13/unit) FOB Baltimore, Md., down roughly $10-$15/st from last report. UAN-32 pricing out of terminals in upstate New York had moved down as well, to $320/st ($10.00/unit) FOB from the earlier $336/st ($10.50/unit) FOB level.

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