All Posts from August 17, 2015

Phosphates

Bangladesh, Brazil, Central Florida, China, Eastern Cornbelt, India, Market Watch, Middle East, North Africa, Phosphate Rock, Southeast, Southern Plains, U.S. Exports, U.S. Gulf, Western Cornbelt

Central Florida: Fresh DAP truck sales on the Central Florida phosphate market were reported at $430/st FOB last week. MAP was listed as $450/st FOB with no transactions reported.

U.S. Gulf: Trading on the NOLA barge market came to a relative standstill last week following the release of USDA’s latest Crop Production report, which raised U.S. corn and soybean harvest estimates.

The much-anticipated report, combined with an unexpected devaluation of the Chinese yuan, promptly sent grain markets into a tailspin before partially recovering later in the week. The frothy futures market was enough to dry up much of the end-user demand, sources said, which trickled down in the form of limited barge interest at NOLA.

Prompt and full-August domestic DAP pricing firmed in limited trading to $434-$435/st FOB. Price ideas for prompt domestic MAP were generally in the $440-$445/st FOB range.

Offers for DAP imports expected at NOLA around Sept. 25-26 were quoted in the mid-$430s/st FOB. Chinese DAP offered in recent weeks, described as a blond material, carried last-done prices in the $427-$430/st FOB range for DAP, with MAP reported in the low- to mid-$430s/st FOB, although some claimed the cargo had been completely sold as of Aug. 13.

Fluctuations in the price of barge freight added a note of uncertainty to the market. Spot rates to points on the Mississippi and Ohio Rivers have swelled as much as 60 percent in recent weeks, driven in part by competition with southbound grain transports, sources said.

“This happens every year during harvest,” one source said. “(Barge carriers) would rather go up the river empty and haul grain back down than deal with us, wait for us to unload, (then) hope they can catch grain southbound.”

The NOLA DAP market was called $434-$435/st FOB on light trading, up from the previous week’s $432-$435/st FOB. MAP was quoted at $440-$445/st FOB, up from $437-$445/st FOB.

Eastern Cornbelt: DAP remained at $465-$485/st FOB in the Eastern Cornbelt, with the low at Cincinnati and the upper end FOB Burns Harbor, Ind. MAP was $5-$10/st higher than DAP, depending on location.

10-34-0 was steady at $520-$525/st FOB for available tons in the region.

Western Cornbelt: DAP pricing remained at $470-$475/st FOB most warehouses in the Western Cornbelt, with MAP quoted $10/st higher than DAP. There were reports from some sources of slightly softer DAP prices in the wake of USDA’s Aug. 12 Crop Production report, but others claimed no new business had actually been done at the lower numbers.

10-34-0 was pegged at $525-$535/st FOB in the region. One Missouri contact placed the common dealer market at the $530/st FOB level in early August.

Southern Plains: DAP was quoted at $465-$470/st FOB Catoosa, with MAP roughly $5/st higher than DAP. Sources said phosphate tons are available now at the port.

10-34-0, however, was unavailable in the region in early August. As a result, no current pricing information was reported last week.

Effective Aug. 1, Agrium’s phosphoric acid postings firmed $60/ton of P2O5, moving to $1,020/ton for rail-DEL SPA and MGA in Colorado and Kansas, and $1,035/ton for rail-DEL SPA and MGA in Oklahoma and Texas.

South Central: DAP remained in the $465-$470/st FOB range out of warehouses in the South Central region, with most terminals reportedly trying to hold to the upper end for new business. TSP was steady as well at $410-$415/st FOB in the region.

Southeast: Regional sources quoted the Aurora, N.C., DAP fill price at the $450/st FOB level in early August.

U.S. Export: Mosaic

K+S shareholders reject PotashCorp offer

News, News Briefs

Kassel, Germany — K+S Group said Aug. 10 that a survey of private shareholders showed opposition to a sale of the company to Potash Corp. of Saskatchewan Inc. Some 30 percent of 140,000 private shareholders responded. The company said 84 percent of the respondents supported the rejection of the PotashCorp bid. Likewise, 84 percent said they were long-term K+S investors, and 78 percent believed the company should remain independent. However, only 55 percent of the investors felt they were well informed on the deal. “Our private shareholders have made their position clear. They share the assessment of the K+S board of executive directors and supervisory board that the current PotashCorp proposal fails to reflect the fundamental value of K+S. At the same time, our private shareholders have given us a clear mandate to keep on realizing what they consider to be attractive future prospects for K+S,” said Norbert Steiner, board chairman. “The response from private investors was overwhelming," said K+S CFO Dr. Burkhard Lohr. “The prevailing view among them is in line with that taken by the overwhelming majority of institutional investors that we are in touch with and who also welcome the rejection of the PotashCorp proposal.” Not everyone agreed with K+S. According to Bloomberg, Scotiabank Analyst Ben Isaacson wrote in a note that if the company surveyed institutional investors the result would be “quite different.” He expected those investors would “jump at the opportunity” to cash out, and surmised that the shareholder rejection was more due to emotional attachment than company value. The survey was carried out and evaluated by a market research institute on behalf of K+S.

Wesfarmers Ltd. – Management Brief

Management Briefs

Wesfarmers Ltd., Perth, West Australia, has moved its three industrial businesses – Chemicals, Energy, and Fertilisers (WesCEF), Resources, and Industrial and Safety (WIS) – under a new Industrial division, with Rob Scott as managing director.

Resources Managing Director Steward Butel and WesCEF Managing Director Tom O’Leary will report to Scott, who will also have day-to-day responsibilities for WIS.

Scott’s responsibilities for Financial Services will transition to Coles Digital Director Roger Sniezek.

Former Insurance Division Managing Director Anthony Gianotti has been appointed Industrial finance director.

Olivier Chretien, who has been WIS managing director since 2008, will now lead the group’s business development and corporate planning functions. Tim Bult moves from Business Development to a new role where he will oversee Wesfarmers’ associated businesses and further develop the group’s offshore business development networks. Chreitien and Bult will report to Wesfarmers Finance Director Terry Bowen.

Central Garden and Pet Co. – Management Brief

Management Briefs

Central Garden and Pet Co., Walnut Creek, Calif., announced that it will begin looking for a new president and CEO this fall, as President and CEO John Ranelli plans on stepping down from that position around the time he turns 70, toward the end of fiscal year 2016. Thereafter, he plans on remaining with the company as an advisor for the next four years.

Ranelli also announced that William Brown, chairman of the board, began a leave of absence in July as he continues to recover from injuries he sustained in an accident in his home earlier this year. Brown, who served as CEO (1980-2003; 2007-2013), has been board chairman since 1980.

Jack Balousek, the company’s lead independent director, is acting as interim non-executive chairman until Brown returns.

In other news, Senior Vice President and CFO Lori Varlas is leaving her position, effective Sept. 2, to accept a senior job with another company. David Chichester has been named acting CFO. He has served on the Central board’s for 13 years as audit committee financial expert. He has served as CFO or held senior finance positions at several companies, including Starbucks and Marriott Corp.

Agrium Inc. – Management Brief

News, News Briefs

Harry Deans will be joining Agrium Inc. as its new senior vice president and president of Wholesale, effective Aug. 24. At that time, Ron Wilkinson will move into the position of senior vice president and advisor to the CEO.

Deans joins Agrium with over two decades of experience in production, sales and marketing, and business management of a broad range of petrochemical and commodity products, including ethanol, ammonia, salt, benzene, phenol, and olefins and polymers. He also has experience overseeing large projects.

Deans has held a number of CEO positions at Ineos and was most recently the CEO of Ineos Nitriles, a global business based in Switzerland, which is a wholly-owned subsidiary of the $54 billion Ineos Corp. He has also worked for BP Chemicals. He holds a PhD in Chemistry from Strathclyde University in Scotland.

Transportation

Market Watch, U.S. Gulf

U.S. Gulf: Market sources continued to describe inflated barge freight out of NOLA. Rates were quoted as high as $16/st to St. Louis, Mo., and $27/st to Cincinnati, Ohio, though sources cautioned that these numbers represented the extreme high side of the spot freight market. Barges from NOLA to Catoosa, Okla., and St. Paul, Minn., were spotted up to $32/st and $33/st, respectively.

Gulf water levels were dropping last week, falling nearly three feet from the previous report. Depths at New Orleans were reported at 11.9 feet and dropping on Aug. 13, although shippers said another week of high-water restrictions would likely cap tow lengths. Extra pickup and drop-off delays will continue as long as restrictions are in place, shippers said.

Delays at Industrial Lock were reported in the 24-36 hour range last week on an average of 20 boats queued, and Algiers Lock wait times clocked in at 20-24 hours with 19 vessels in line. Wait times at Bayou Sorrel Lock, which is undergoing Monday-Thursday guide wall repairs through Aug. 15, were reported at 16-18 hours. Vessels waited 1-2 hours to traverse Port Allen Lock.

Following the current round of repairs, Bayou Sorrel Lock will shutter completely through Oct. 15 for dewatering, maintenance, and repair operations. Vessels are slated to detour through Algiers lock in the West Canal, and significant delays are anticipated.

Singlewide traffic restrictions continued in the westbound direction through Calcasieu Lock last week, as dolphin construction on the lock’s east side is expected to last through approximately Sept. 15.

Lower Mississippi River: Minor-stage flood warnings at Red River Landing were scheduled to be lifted on Aug. 15, shippers said. The Lower Mississippi River’s Extreme High Water Safety Advisory remained in place for Miles 303-869, however, setting a floor of 280 horsepower per barge and a maximum tow length of 36 barges.

High-water restrictions at Baton Rouge were forecast to remain in effect through Aug. 15-16. The Baton Rouge gauge read 32.1 feet and falling on Aug. 13, with the Corps originally planning to ease restrictions once levels dipped below the 35-foot mark. Restrictions require that tow vessels maintain a minimum of 240 horsepower per barge on tows no longer than 36 barges. Sources reported pickup and drop-off delays resulting from the restrictions.

Intermittent daylight closures were reported at Mile 643 as mat-laying and weir dike construction continues through Oct. 8. Similar operations and closures are scheduled at Mile 893 on Sept. 5-12, Mile 714 on Sept. 17-22, and Mile 418 on Nov. 11-17.

Big Island Bendway weir construction is expected to limit daytime navigation at Mile 600 through early September. Queued traffic will be allowed to transit the site nightly before the following day’s construction begins.

Upper Mississippi River: Tow restrictions lingered last week in the St. Louis area despite river levels dropping well-below the 25-foot mark. Levels were at 15.2 feet and rising on Aug. 13, and were forecast to crest at 16.0 feet around Aug. 15-16. Conditions have prompted tow cuts of up to five barges between Cairo and St. Louis on a boat-by-boat basis.

Lock 27 navigation delays were reported at 2-4 hours on a three-boat average queue, sources said. Passage through Lock 20 was delayed by about an hour.

Lift gate wire inspection closed the Mel Price Lock main chamber on Aug. 11, temporarily interrupting transit. The lock’s auxiliary chamber remains offline.

Illinois River: Peoria and Lagrange Locks, open for transit without locking in recent weeks, could return to operation on Aug. 13 and 15, respectively, according to river forecasts.

Marseilles Lock saw delays of about an hour for the week, and

Crops/Weather

Eastern Cornbelt, Market Watch, Southeast, Southern Plains, Western Cornbelt

Grain Futures: As of 4 p.m. on Aug. 13, corn, soybean, and wheat futures were all lower compared to the week before.

September 2015 corn was posted at $3.6375/bushel, down from $3.6975/bushel, while corn for December 2015 fell to $3.7525/bushel from the prior week’s $3.805/bushel. Contracts for March 2016 corn were $3.87/bushel, down from $3.915/bushel the week before.

Soybean prices for November 2015 were $9.27/bushel, down from $9.4325/bushel the week before. January 2016 soybeans slipped to $9.3275/bushel from the prior week’s $9.48/bushel, while March 2016 soybeans were reported at $9.32/bushel, a decrease from $9.4375/bushel one week earlier.

September 2015 wheat punched in at $5.0325/bushel, down from $5.07/bushel the week before, while December 2015 wheat contracts fell to $5.09/bushel from the previous week’s $5.1125/bushel. Wheat for July 2016 was $5.225/bushel, down from $5.2625/bushel the week before.

Eastern Cornbelt: Wet weather continued to slow the development of corn and soybeans in the region, with crop maturation trailing the average pace just slightly in all three states. Local reports said another round of storms brought heavy showers to central Indiana in early August.

Crop conditions changed little from last report. USDA on Aug. 9 assigned good or excellent ratings to 56 percent of the Illinois corn crop, compared with 46-47 percent in Indiana and Ohio. Soybeans in the good or excellent categories totaled 50 percent of the acreage in Illinois, compared with 44-45 percent in Ohio and Indiana.

Western Cornbelt: Crops in much of the Western Cornbelt continued to benefit from ample summer moisture in early August. Except for a few small patches of abnormally dry soil conditions, the region was completely drought-free as of Aug. 11.

For Missouri, however, the flooding and severe storms that occurred earlier in the growing season have taken a toll on many crops. A federal disaster declaration on Aug. 7 will make disaster funding available to residents in 68 Missouri counties after the state recorded its second wettest May through July period on record.

USDA’s weekly crop report on Aug. 9 illustrated clearly the effects of this excess moisture. Just 39 percent of Missouri’s cotton and 31 percent of the state’s soybeans were rated as good or excellent last week, compared with 73-79 of the soybean acreage in Iowa and Nebraska. While 51 percent of Missouri’s corn was rated as good or excellent last week, fully 77-83 percent of the corn acreage in Iowa and Nebraska fell into those two categories. Missouri’s sorghum crop was also trailing in quality, with 43 percent rated as good or excellent, compared with 71 percent in Nebraska.

Sources reported minimal changes to the region’s fertilizer markets last week, and minimal activity to test the market. One source noted that low commodity prices “have put a damper on farmer interest” in advance of the fall season. “If harvested acres come in short of predictions, then we should get some help on commodity prices,” he added.

Southern Plains: High heat was reported in Texas, Oklahoma, and New Mexico in early August, with temperatures lingering in the 90s for consecutive days in many locations. Kansas sources reported highs in the 80s with a “very nice profile of moisture in the fields.”

Most of the region remained drought-free last week, although abnormally dry to moderate drought conditions covered the western half of New Mexico. The region’s crops benefited from a wet spring and well-timed rains. “Soybeans look good, corn looks good, and grain sorghum – just keep the frost up north until early October,” said one source. “It looks like a gre

Sulfur

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

Tampa: BP Plc’s Whiting, Ind., refinery faced an unscheduled shutdown last week following a malfunction in the facility’s largest crude distillation unit, according to reports.

Damaged piping within the 240,000 barrel/d unit will take at least a month to repair, sources said, though that timeline was considered preliminary and likely to be extended. Total refinery capacity is 413,500 barrels/d. The unit came online in 2013 as part of a $4 billion upgrade designed to make better use of high-sulfur Alberta Tar Sands sour crude.

The price of molten sulfur delivered to Tampa is $137/lt for Q3.

Domestic refinery capacity held steady for the week, according to the U.S. Energy Information Administration (EIA). Utilization for the week ending Aug. 7 was put at 96.1 percent, unchanged from the week before. The number represented the highest first-week August capacity level since 96.9 percent was achieved on Aug. 6, 1999, and handily beat both the year-ago number of 92.4 percent and the 92.4 percent five-year average.

Daily crude inputs dipped slightly to an average 17.029 million barrels/d, down 46,000 barrel/d from the previous week’s 17.075 million barrels/d reported total.

U.S. Gulf: Gulf prills were unchanged at $135-$145/mt FOB for the week.

Vancouver: Sources called the Vancouver spot market flat in a range of $145-$150/mt FOB, with most or all current market activity essentially operating as spot. The prices were largely based on recent transactions into China valued in the mid-$160s/mt CFR.

A measure of uncertainty was introduced to the market by the surprise devaluation of the Chinese yuan relative to the U.S. dollar, however, along with the reintroduction of a 13 percent VAT on fertilizer imports and exports set to begin on Sept. 1.

Supply was described as tight from Saskatchewan due to reduced output from the Husky Energy and Co-op refineries, attributed by some sources to constrained pipeline allocations limiting sour feedstock access.

Netbacks to Alberta producers ranged from (-)$5-$85/mt.

West Coast: Formed sulfur sold from the West Coast fell in a range of $130-$140/mt FOB.

Third-quarter molten contracts were called $75-$125/lt FOB.

ADNOC: The August price of ADNOC sulfur is $155/mt FOB Ruwais, $5/mt above the $150/mt FOB July price.

Aramco: Saudi Aramco lowered its September sulfur price to $150/mt FOB Jubail, $2/mt below the $152/mt FOB price offered for August shipping.

Tasweeq: Prilled sulfur produced in Qatar was $151/mt FOB Ras Laffen for the month of August, $2/mt higher than July’s $149/mt FOB.

Potash

Brazil, Eastern Cornbelt, India, Market Watch, Potash Muriate, Southeast, Southeast Asia, Southern Plains, Sri Lanka, U.S. Gulf, Western Cornbelt

U.S. Gulf: The last done potash barge business continues to be put at $305/st FOB. While some players say that is the bottom, others say $295-$300/st FOB is possible if buyers would come forward.

Eastern Cornbelt: Potash was quoted at $345-$355/st FOB regional warehouses in the Eastern Cornbelt.

Western Cornbelt: The potash market remained at $345-$355/st FOB out of warehouses in the Western Cornbelt, depending on grade and location, with unconfirmed reports of spot deals as low as $340/st FOB from domestic suppliers.

Southern Plains: The warehouse potash market had reportedly slipped to $340-$350/st FOB in the Southern Plains. Reference prices FOB Carlsbad, N.M., included $360/st FOB for 60 percent standard, $365/st FOB for 60 percent granular and 62 percent standard, and $372/st for 62 percent granular.

The SOP Magnesia market FOB Carlsbad remained at $385-$400/st, depending on grade.

South Central: The potash warehouse market was tagged at $345-$350/st FOB in the South Central region, reflecting a $5/st drop from July pricing levels.

Southeast: Fill prices for potash remained at $355-$362/st FOB and $360-$272/st rail-DEL in the Southeast, depending on grade and location.

Southeast Asia: The region remains largely out-of-season, and no new significant business was reported in the bigger volume markets of Malaysia and Indonesia. Prices in Malaysia are assessed at $305-$315/mt CFR for standard material, and in Indonesia at around $320/mt CFR for standard.

Vietnam this month will see the delivery of two cargoes of 25,000-30,000 mt from Uralkali, which are understood to include a mix of standard and granular material. A similar sized cargo is also on the water from Belarus Potash Co. (BPC), and is also for August delivery. The standard tons were reportedly priced at $325-$330/mt CFR.

India: National Fertilizers Ltd. (NFL) closes a tender Aug. 21 for the import of 50,000 mt of pink potash (+/-5 percent) for delivery in the second half of October. The tender calls for shipment in two 25,000 mt lots to Kandla or Mundra and to Gangavaram. NFL in June scrapped a tender it had issued in April for the same quantity of potash.

Brazil: Demand for potash remains weak, with suppliers reportedly struggling to complete new business. High inventories, along with a further deterioration in the real against the U.S. dollar, are adding to the pressure on prices.

Granular potash prices slipped further, with some sources claiming that sales for August have been concluded in the $315-$320/mt CFR range. One source believed even $310/mt CFR could be secured.

That said, a major supplier continues to maintain that the market level is around the $325/mt CFR mark, while another remains optimistic that $330/mt CFR can be achieved over the next month. Not that long ago, suppliers were targeting $340-$345/mt CFR for July and August deliveries.

Sri Lanka: A tender for 25,000 mt of MOP by the agriculture ministry closed Aug. 7. The ministry is looking for late October shipping.

The tally for the tender follows:

Sri Lanka Agriculture Ministry MOP Tender for 25,000 mt

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