Transportation

U.S. Gulf/River: Transit operations were affected by icy conditions on the Illinois River last week. The ice was flowing, however, and temperatures were expected to remain slightly above freezing for the short-term. Shippers switched to rake barges while the cold conditions persist. The Chicago-area T.J. O’Brien Lock is closed for repairs through March 8.

Upper Mississippi River Lock 27’s main chamber closed to daytime transit beginning Jan. 29 and will reopen Feb. 15. Shippers expected “major delays” through the length of the project, though wait times were steady at around one hour leading up to the shutdown.

The U.S. Army Corps of Engineers continued to wait for river levels at Cape Girardeau, Mo., to descend to the 10-foot mark, at which time rock removal at Thebes, Ill., will resume for the season. The gauge last week was holding at 12.2 feet.

Northbound traffic through the Ohio River’s Lock 52 was impeded on Jan. 28, but boats heading south were unaffected. Waits of about an hour were reported at R.C. Byrd Lock, and the auxiliary chamber at Belleville Lock will be closed to daylight traffic on Feb. 9-27. The main chamber will remain open for use.

Officials announced closure dates for the Tennessee River’s Wilson Lock main chamber from Feb. 23-27. The chamber will also be offline March 16-20 and May 5-June 11. Dive inspections are projected to delay traffic at Pickwick Lock until approximately 4:00 p.m. on Feb. 3.

The main chamber at Winfield Lock on the Kanawha River will be shuttered Feb. 25 through April 30, during which time shippers warned of significant transit delays. The Monongahela River’s Braddock Lock and Dam main chamber remained closed due to equipment failure, with minor delays reported. Ice hampered operations on the Allegheny River last week.

On the lower Mississippi River, weir dike construction at Mile 634 will halt daytime navigation through April 1. Significant delays are predicted, though a lack of construction materials conspired to stop work on Jan. 28. Chamber repairs forced intermittent daytime delays through Jan. 29 at Old River Lock.

Gulf-area shippers reported waits at Industrial Lock (12-18 hours), Calcasieu Lock (three hours), Harvey Lock (one hour), and Port Allen Lock (one hour). Daytime transit through Calcasieu will be limited through Feb. 28, and navigation beneath the Galveston Railroad Bridge will be unavailable between 7:00 a.m. and 12:00 p.m. on Feb. 2-3.

A six-week dewatering and repair project at Bayou Sorrel Lock was pushed back to July, and alternate route planning was underway for Industrial Lock’s complete closure, which is set to run Aug. 1 through Nov. 30.

ICL workers on strike

Workers at Israel Chemicals Ltd.’s Dead Sea Bromine Compounds subsidiary have gone on strike. They took the action on Monday after management called in 140 workers to discuss terms for their being laid off. All 850 workers at the plant in southern Israel went on strike to protest the move and shut down all operations. The union is threatening to strike all ICL plants in solidarity with the Dead Sea Bromine Compounds workers.

Talks between management and the union at the subsidiary broke down late last week. Union leader Avner Ben Senior sent an urgent letter to Israeli Prime Minister Benjamin Netanyahu calling on him to intervene in the dispute. He charged ICL with earning hundreds of millions of dollars annually from natural resources that belong to the Israeli public and then firing workers “to punish the Israeli government for raising taxes on the company.”

So far, there is no firm word as to whether workers at potash producer Dead Sea Works will strike. In January, potash shipments resumed from DSW after over a month of sanctions. The sanctions were halted after an agreement was reached at the Beer Sheba Labor Court whereby ICL agreed to withdraw dismissal notices sent to 134 workers at DSW. The court instructed the parties to hold intensive negotiations to reach an agreement on outstanding issues and report back by Feb. 15. However, the latest developments at Dead Sea Bromine Compounds could have an impact on DSW.

Ammonia

U.S. Gulf/Tampa: Nothing new was reported in the market last week, except perhaps for speculation about March Tampa pricing. While some see another significant price drop, others suggest suppliers may dig in their heels.

February NYMEX natural gas rolled off the board Jan. 28 at $2.866/mmBtu, up slightly from Jan. 22’s $2.835/mmBtu. March traded Jan. 29 at $2.719/mmBtu.

Eastern Cornbelt: Sources described the regional markets as quiet last week, although some terminals were filling tanks to cover upcoming spring sales.

Anhydrous ammonia remained at $610-$635/st FOB regional terminals, depending on location and time of delivery. The market out of Illinois locations was generally reported at $610/st FOB for prompt and $625/st FOB for prepay. Indiana terminals locations were roughly $10/st higher, with the Huntington market pegged at the $630/st FOB mark for spring tons.

Western Cornbelt: The anhydrous ammonia market remained at $570-$620/st FOB regional terminals in the Western Cornbelt, with the low in Nebraska and the upper end FOB Palmyra, Mo. Central Missouri sources reported delivered ammonia at $615-$620/st from southern production points. Ammonia out of Iowa terminals was unchanged at $585-$610/st FOB, depending on location and time of delivery.

Northern Plains: The ammonia market was reported at $600-$610/st FOB river terminals in Minnesota for spring tons, with spring prepay also reportedly being offered at $615-$620/st FOB Velva, N.D.

Several regional suppliers were not offering any tons for fill or prepay last week, with reports of sold-out inventories from those locations. The last delivered sales in the North Dakota market were reported at the $615/st level for spring tons.

Great Lakes: The anhydrous ammonia market in the Great Lakes region was quoted at $625-$630/st FOB, with the upper end reported by Michigan sources FOB Courtright, Ont.

Middle East: Sales from Arab suppliers into Asia are being pushed down into the low $500s/mt CFR. Sources say this makes the netback about $450/mt FOB and lower.

The issue people will be watching, however, is how quickly this calculation makes its way into publicly posted prices. So far, say sources, the transactions into Asia are largely a part of long-term deals on a formula basis.

Black Sea: Sources report that prices out of Yuzhnyy have slipped below $400/mt FOB. The only bright side, said one trader, is that at least product is still coming out of the area.

Urea

U.S. Gulf: Prompt granular barge business spanned a broad range last week, and was called $318-$332/st FOB. The high end of the range occurred early in the week, but prices soon worked their way down. The drop was attributed to a big uptick in imports, with sources expecting February imports to be particularly heavy.

Some were still holding out for $335/st FOB for prills, but others put that market in the $322-$330/st FOB range and doubted that product could remain strong in light of dropping granular prices.

Eastern Cornbelt: Granular urea was quoted at $367-$385/st FOB in the Eastern Cornbelt, with the lower number reported in the Cincinnati, Ohio, market for prompt tons.

Western Cornbelt: Granular urea was steady at $375-$385/st FOB most regional terminals in the Western Cornbelt.

Northern Plains: The granular urea market was quoted at $370-$380/st FOB the Twin Cities for river open tons, with the spot market there reported as high as $390/st FOB from some suppliers for “very limited” inventories.

In North Dakota, the urea market was tagged at $420/st FOB Hannaford for prompt tons, with the Carrington market reported at $425/st FOB for prompt and $430/st FOB for prepay. Delivered urea into North Dakota was pegged at $435-$450/st.

Great Lakes: The granular urea market was pegged at $380-$390/st FOB in Wisconsin. Michigan sources reported the market at $395-$415/st FOB, with the low FOB Courtright and the upper end FOB Webberville, Mich.

Northeast: Granular urea was reported at $375-$385/st FOB in the Northeast, with the low FOB Fairless, Penn., and Savannah, Ga., and the upper end FOB East Liverpool, Ohio.

India: Prices in the MMTC tender that closed Jan. 27 pretty much came in where people expected, with about 500,000 mt under $300/mt CFR.

All told, about 2.4 million mt were offered, with prices ranging from $297/mt CFR to $314/mt CFR. Sources report that MMTC has already accepted the lowest prices for the ports of Krishnapatnam at $297.10/mt CFR, Mundra at $299.10/mt CFR, and Kandla at $300.10/mt CFR. Talks are reportedly expected to last through the weekend.

Lower freight rates, thanks to a declining petroleum market, drove the softer prices rather than any willingness by the Chinese producers to lower their prices. Freight rates once pegged at $13-$16/mt from northern China to India’s east coast are now put at $8-$10/mt.

Winning companies who may have taken the lower freight into consideration when forming their offers are now facing stubborn Chinese producers on the netback. Sources say producers are holding firm on their pricing ideas for prills in the low $290s/mt FOB. One trader said a few deals might be cut at $288-$289/mt FOB, but even with cheaper transportation, those prices do not offer any opportunities for even a minimal profit on the deal.

The tally of offers follows:

MMTC Urea Tender – Jan. 27, 2015

Offering Company

Origin

Quantity (mt ‘000)

Nitrogen Solutions

U.S. Gulf: The UAN barge market was lackluster at $260-$265/st ($8.13-$8.28/unit) FOB for recent trades.

The last done East Coast vessel business was put at $298/mt CFR, with sellers seeking $300-$302/mt CFR for the next round of business.

Eastern Cornbelt: The UAN-28 market was reported in a broad range at $270-$290/st ($9.64-$10.36/unit) FOB terminals in Ohio and Indiana, with the low at Cincinnati and the upper end for spring tons FOB Toledo, Ohio, and Burns Harbor, Ind.

Illinois sources quoted the UAN-32 market at $310-$320/st ($9.69-$10.00/unit) FOB and $325-$330/st ($10.16-$10.31/unit) rail-DEL.

Western Cornbelt: UAN-32 was unchanged at $310-$320/st ($9.69-$10.00/unit) FOB in the Western Cornbelt, with the low in Missouri and the upper end in Iowa.

Northern Plains: UAN-28 was quoted at $282-$285/st ($10.07-$10.18/unit) FOB the Twin Cities, with the upper end of the Northern Plains range reported at $305/st ($10.89/unit) FOB North Dakota terminals for spring tons.

Great Lakes: UAN pricing in the Great Lakes region was up considerably from last report. The UAN-28 market was tagged at $275/st ($9.82/unit) FOB Courtright, $290/st ($10.36/unit) FOB Webberville and Bay City, Mich., and $295/st ($10.54/unit) FOB Wayland, Mich. Wisconsin sources quoted the UAN-32 market at $315/st ($9.84/unit) FOB for prompt and up to $330/st ($10.31/unit) FOB for spring prepay.

Northeast: Sources pegged the Baltimore UAN-32 market at $285-$290/st ($8.91-$9.06/unit) for prompt tons, with reports of prepay being offered at the $300/st ($9.38/unit) FOB level for May-June delivery. Out of terminals in upstate New York, the UAN-32 market had firmed to $336/st ($10.50/unit) FOB, up $16/st from early January pricing.

Ammonium Sulfate

Eastern Cornbelt: Granular ammonium sulfate was reported at $310-$325/st FOB in the Eastern Cornbelt, with the low FOB Maumee, Ohio, and the upper end FOB Burns Harbor and other terminals in Indiana and Illinois. Rail-delivered product was pegged at $315-$330/st in the Eastern Cornbelt.

Ammonium thiosulfate was tagged at $345-$350/st FOB in the region, with the low FOB Burns Harbor and the upper end FOB Maumee.

Western Cornbelt: The low end of the granular ammonium sulfate range in the Western Cornbelt remained at $285-$290/st FOB in Missouri, with the upper end quoted at the $310/st FOB level in Iowa.

Ammonium thiosulfate was steady at $310-$345/st FOB in the region.

Northern Plains: The granular ammonium sulfate market was tagged at $300-$310/st FOB in the Northern Plains, with delivered product referenced in the $320-$330/st range, depending on location. Sources reported very tight inventories, with some suppliers sold out on a prompt basis. “There are no tons from anyone,” said one regional contact at midweek.

The ammonium thiosulfate market had reportedly firmed to $320-$350/st FOB for spring tons in the Northern Plains, up $10-$20/st from last report, depending on location.

Great Lakes: Granular ammonium sulfate was quoted at $315-$325/st FOB in the Great Lakes region, with the low FOB Webberville and the upper end reported in the Wisconsin market. Honeywell’s Jan. 7 granular ammonium sulfate postings included $325/st FOB Wisconsin terminals at Amherst Junction and Prairie du Chien.

The ammonium thiosulfate market was pegged at $350-$360/st FOB in the region, with the low again reported FOB Webberville.

Northeast: Granular ammonium sulfate remained at $305-$315/st DEL in the Northeast.

Phosphates

Central Florida: Seasonal slowness was the name of the game in Central Florida last week. “Everyone is about filled up with everything, and there’s little activity in the fields,” one trader remarked. “It’s kind of a quiet time.”

One exception was the Florida agricultural region itself, which traditionally heats up in February. “Feb. 1 in Florida is like April 1 in the Midwest,” one industry veteran said. “Not a lot of material moves there, but there’s some.”

Producers were still reported to be tight in the region through April, with export price pressure easily outcompeting Central Florida bidders. Producers would make enough material available for Florida end users, sources said, but phosphate headed out of the state was considerably harder to come by.

“Single railcars going north are the tight ones,” one contact maintained, adding that traders would likely fill orders from river terminals and import locations if material proves unavailable within the state.

Sources quoted the Central Florida DAP market at $430-$440/st FOB, unchanged from the previous week, with truck sales making up the top of the range. MAP was said to maintain a roughly $20/st premium to DAP.

U.S. Gulf: The NOLA barge market strengthened slightly after taking a breather in the previous week. Trading volumes remained on the low side, but prices tipped slightly higher to a range of $442-$447/st FOB.

Offers for nearby domestic material were primarily quoted in the $445-$450/st FOB range, though some were content to take profit a couple dollars lower. “There are a few long guys offering behind the net, below $445/st FOB,” one trader said.

Confirmed MAP trades came in lower for the week at $442-$446/st FOB.

Announced imports remained minimal, though sources reported that quantities of Russian material had been arriving recently, hitching rides on a number of urea import vessels.

Additionally, the year’s first Chinese phosphate vessel was confirmed last week, due to arrive in early March. Sources previously speculated that the new phosphate export tax at China would make such a deal tenable only when the barge price hit $445-$450/st FOB.

A number of analysts predicted spring corn plantings to drop by 4-5 million acres from fall estimates, landing at around 87-88 million acres. Sources were divided on the potential effect of the reduced acreage on the spring phosphate season. Some found solace in last year’s record yields, arguing that the greater-than-average nutrient loss will force greater amounts of fertilizer to be applied per acre, effectively compensating for the reduced overall acreage.

Others simply expected reduced application of both phosphate and potash for spring.

Market sentiment appeared to trend bullish overall, however, despite the current dearth of volume traded. “There’s not a lot of negativity in the market right now,” one source said, adding that current transactions are mostly trader-to-trader, evidence of a relatively lean market that is likely to provide continued support through the short term.

The NOLA DAP market firmed to a range of $442-$447/st FOB, up from $442-$443/st FOB the week before. MAP transactions were quoted at $442-$446/st FOB, down from $445-$450/st FOB at last report.

Eastern Cornbelt: DAP was reported in a broader range at $470-$490/st FOB regional warehouses in the Eastern Cornbelt, with the low at Cincinnati and the upper end FOB Maumee. MAP was $15-$20/st higher than DAP, depending on location.

10-34-0 remained at $540-$550/st FOB in the Eastern Cornbelt.

Western Cornbelt: DAP was pegged at $470-$480/st FOB warehouses in the Western

The Week in Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 105.61 107.20 87.32
CF Industries CF 306.79 307.25 229.57
CVR Partners UAN 11.84 11.58 17.12
Intrepid Potash IPI 13.30 14.19 15.33
Mosaic MOS 48.22 48.66 44.68
PotashCorp POT 36.08 36.25 31.83
Rentech Nitrogen RNF 10.91 11.20 18.39
Terra Nitrogen TNH 122.04 129.43 151.25
Distribution/Retail
Andersons Inc. ANDE 45.73 46.66 53.69
Deere & Co. DE 85.91 89.51 85.93
Scotts SMG 63.70 63.87 60.11
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