All Posts from September 2, 2013

Growmark plant food volumes up, earnings down

News, News Briefs

Bloomington, Ill. — Growmark Inc. reported that its Plant Food segment reported the third consecutive year of record sales volume for the year ending Aug. 31, 2013, though income will be down from last year’s strong earnings. Cooperative-wide, Growmark estimated unaudited, estimated pre-tax income for the fiscal year to be $220 million on sales of $10.3 billion. Growmark said it was one of the best years in company history. An estimated $135 million in patronage refunds will be returned to member cooperatives and farmer owners. Comparable numbers for the year ending Aug. 31, 2012, were pre-tax income of $295 million on sales of $10 billion, with patronage of $158.1 million. For the year ending Aug. 31, 2013, record sales volume for the Crop Protection division was reported, the result of sales growth in all major product categories and emphasis on nutrient management and weed resistant challenges. Total crop protection sales increased 28 percent. The Seed segment reported increased unit sales of corn and soybeans, with seed sales dollars up eight percent over 2012. Sales of Deere, AGCO, and Case IH tractors and equipment exceeded the threshold of $100 million for the first time. All of Growmark’s retail divisions reported solid years. Total retail division sales are estimated at $ 1.7 billion, which includes record sales at East Coast subsidiaries, Growmark FS LLC, and Seedway LLC. Several acquisitions, efficiency improvements, target marketing, and enhanced people resources added to this year’s success. The Energy division recorded another record year for total product volume. Total volume was nearly 10 percent higher than last year, driven by market share increases and an expanded marketing footprint. Gasoline, diesel fuel, propane, and lubricants all posted gains. Growmark continues to grow its grain business in nearly every territory segment. Despite the drought going into this year, the grain business performed better than expected, originating 130 million bushels of grain. Risk management services, including Mid-Co Commodities, and AgriVisor LLC, reported continued strong demand for the products and services offered.

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks


Producer Symbol Price Week Ago Year Ago
Agrium AGU 86.09 86.91 99.18
CF Industries CF 189.33 193.92 207.50
CVR Partners UAN 18.79 18.87 26.32
Intrepid Potash IPI 12.41 12.34 22.40
Mosaic MOS 41.54 41.29 57.81
PotashCorp POT 29.60 29.66 40.90
Rentech Nitrogen RNF 25.50 25.70 33.84
Terra Nitrogen TNH 212.99 210.76 215.29
Distribution/Retail
Andersons Inc. ANDE 67.01 67.37 40.28
Deere & Co. DE 83.80 83.25 74.32
Scotts SMG 52.78 54.79 41.56

Michigan is N.M. untapped, says junior K company

News, News Briefs

Hersey — Michigan Potash Co. LLC (mipotash.com) is seeking to develop some 14,500 acres of potash reserves surrounding the current Mosaic Co. solution mine at Hersey. The company said that for the past three years it has been quietly assembling the leasehold and working to make sure that the mine could be established. “This is the U.S.’s only shovel ready potash project,” said Ted Pagano, Michigan Potash general manager. “Michigan is New Mexico untapped.” Back when the Hersey mine was developed, he said plans were for some 1 million st/y production in the area. Mosaic currently produces about 100,000 st/y at the Hersey mine, as well as salt. The mine was formerly owned by Vigoro Corp., then IMC Global Inc., and then eventually Mosaic. Earlier owners had big expansion plans for the Hersey mine, but the property eventually became a small part of a very large Mosaic portfolio. Pagano touts the location in the Cornbelt and said his venture has been approaching local cooperatives and buyers about its potential. He said the reserves are the purest and highest grade, nearing 60 percent KCI, which would be 600 percent greater than New Mexico and 200 percent greater than Canada and Russia. While the reserves are some 7,500 feet underground, Pagano said that technology has advanced to the point that that is no problem. Pagano said the company has no association with Michigan Potash Co. Inc., a Toronto-based junior exploration firm operating in Michigan as Purus Potash Inc.

OCI 2H income off 72.2 percent

News, News Briefs

Amsterdam — OCI NV reported a 72.2 percent drop in net income for the first half ending June 30, 2013, to $56 million on revenues of $3.1 billion, versus the year-ago $201.7 million and $2.63 billion, respectively. Excluding one-time charges, net income was off 38.2 percent, to $124.7 million. OCI cited natural gas curtailments in Egypt, which significantly reduced production, though it says that gas quantities have now resumed due to amended contracts. It estimated that it lost some 365,000 mt of urea and 247,000 mt of ammonia versus budgeted production. Lost production was partially offset by an increase in traded volumes; however, those have lower margins versus self-produced tons. First-half sales volumes were put at 2.86 million mt of nitrogen-based fertilizer, versus the year-ago 2.59 million mt. First-half traded volumes were 352,400 mt for urea and 776,700 mt for ammonium sulfate, versus the year-ago 21,000 mt urea and 239,200 mt AS.

SQM 2Q income off 44 percent

News, News Briefs

Santiago — Lower commodity prices had a major impact on Sociedad Quimica y Minera de Chile S.A. (SQM), with net income before minority interest falling 44 percent for the second quarter ending June 30, 2013, to $109 million on revenues of $566.5 million, compared to the year-ago $193.9 million on revenues of $683.3 million. Second-quarter Specialty Plant Nutrient (SPN) revenues were down at $181.8 million from the year-ago $194.8 million, while Potassium/SOP were down as well to $164.1 million from $191.7 million. Revenues were also down in other segments – Iodine, Lithium, and Industrial Chemicals. Six-month income was $261.6 million on revenues of $1.19 billion, down from $345.6 million and $1.21 billion, respectively. “We saw higher revenues in our SPN business line and similar revenues in our Potassium business line during the first half of the year, when compared to the first half of 2012,” said SQM CEO Patricio Contesse. “As anticipated, fertilizer prices declined when compared to the first half of 2012, but we were able to partially offset lower prices with higher sales volumes in both the SPN and Potassium business lines.” Six-month SPN volumes were $378.6 million, up from $353.9 million, while volumes were 457,700 mt versus 403,000 mt. Potassium revenues were down slightly, to $317 million from $325.3 million, while volumes were up, at 681,300 mt from 643,200 mt.

Industry shocked by Baumgertner arrest

Featured, News

The fertilizer industry was already reeling from the international attention resulting from the July 30 break-up of Belarusian Potash Co. (BPC). The Aug. 26 arrest by Belarusian authorities of OAO Uralkali CEO Vladislav Baumgertner in Minsk upped the ante. He was arrested at the airport following a meeting with Belarus Prime Minister Mikhail Myasnikovich.

Baumgertner was charged with abuse of office as chairman of BPC. Baumgertner’s Russian lawyer, Alexei Basistov, who cannot represent him in Belarus, told The Voice of Russia that based on public information it appears he will be detained for two months. He termed the arrest as purely political. Russia has demanded the immediate release of Baumgertner. Basistov said a Belarusian legal team has been assembled to represent Baumgertner.

Belarus authorities were also reported to be looking for four other Uralkali executives, including Oleg Petrov, head of sales, as well as major shareholder Suleiman Kerimov. It was also looking to seize Uralkali assets in the country.

Uralkali Board Chairman Alexander Voloshin called the detention “an outrageous act,” and insisted that Baumgartner be immediately released and that Belarus cease the legal pursuit of his colleagues.

“The statements from the Belarusian authorities with respect to supposed illegality perpetrated by BPC management look highly irregular,” said Voloshin. “The related allegations contradict common sense and would not stand up to scrutiny. I would like to point out that the Advisory Board of BPC chaired by Mr. Baumgertner is an overseeing body which convenes only a few times a year. The Chairman of the Advisory Board has no authority to be abused.

“The de-facto head of BPC is its General Director, who has always been nominated by the Belarusian side,” he added. “Several weeks ago BPC’s General Director was appointed to one of the highest official positions in Belarus, i.e., deputy head of the President’s administration. I assume this indicates that the results of BPC’s activities and the company’s operations are highly regarded by the officials at the highest level of Belarusian government. In light of the above, accusations of abuse of power against Vladislav Baumgertner look simply absurd.”

Almost immediately there were reports of Russian trade actions against Belarus, with Russian oil pipeline Transneft cutting oil supplies to Belarus for September, purportedly for pipeline repairs. Belarus relies on Russian oil for its two refineries. Russian inspectors were also finding fault with Belarusian dairy imports, though there were no reports of them being halted last week.

Gilad Alper, an analyst at Tel Aviv-based Excellence Brokerage, called the arrest an “act of desperation.” He does not believe that the move will have any positive impact on potash prices. When the news broke, share prices of Israel Chemicals Ltd. and other potash companies rose in response. But Alper believes that this is in effect a battle between Russian President Vladimir Putin and Belarusian President Alexander Lukashenko, and that like every confrontation in the past, Putin will again be victorious – mainly because Russia is Belarus’ energy supplier.

Alper also speculated that the Russians do a lot of business in China, and that Uralkali would not have broken up the cartel without permission from Putin. He doesn’t see much chance of a compromise regarding the cartel and said the consequences are not good for the potash market in general, and ICL in particular.

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, Great Lakes, India, Market Watch, Middle East, Northern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa: Major Tampa players were at a stalemate most of last week on a price for September. Sellers sought an increase, citing higher Black Sea numbers, while buyers wanted a rollover, citing weak DAP prices. Late in the week, sellers won out with a $15/mt increase over August’s $470/mt, to $485/mt CFR.

While natural gas prices remained relatively low last week, they were still a good bit higher than numbers for this time last year. September NYMEX natural gas went off the board Aug. 28 at $3.567/mmBtu, versus the year-ago close of $2.634/mmBtu. The October close on Aug. 29 was $3.618/mmBtu, versus the year-ago $2.685/mmBtu.

Eastern Cornbelt: Intense heat and humidity settled over Illinois in late August, prompting heat advisories and school closures. The heat wave also blanketed parts of Indiana and Ohio, generating thunderstorms and heavy rains in northeastern Ohio early in the week.

Corn and soybeans responded to the heat and humidity with rapid growth, and sources reported very favorable crop conditions last week. Sources reported some early harvest activity on silage and seed corn last week, and topdress applications were underway on wheat stubble and hay ground, although fertilizer movement was limited in the region.

“We typically do not have any grower interest in August,” said one contact. “It seems the industry is concerned about lack of grower interest, but that usually does not happen till later anyway.”

There were minimal changes to the spot fertilizer markets last week, although slightly lower ammonia prices were reported. Sources pegged the dealer market at $530-$540/st FOB, with the low in Illinois and the upper end of the range FOB Huntington, Ind.

Western Cornbelt: After a relatively cool summer, the Western Cornbelt was hit with high heat and humidity in late August, resulting in numerous heat advisories for Iowa and Nebraska.

Iowa sources reported growing concerns about drought in late August. The Aug. 27 Drought Monitor showed the entire state enveloped in some stage of drought, with moderate to severe drought conditions covering the southern half of Iowa and the northern half of Missouri.

Low water levels were also starting to become a factor for barge navigation on the Mississippi River. Local reports said barges and tows were backed up between Clinton and Camanche, Iowa, at midweek because of shallow water, and dredging operations were underway.

Spot fertilizer pricing remained flat to weak in the region, although there was little new business to test the markets.

The anhydrous ammonia market was quoted at $505-$545/st FOB in the region, down slightly from last report, with the low reported in Nebraska. Nebraska sources also reported fall prepay offers in the $520-$525/st FOB range last week.

Northern Plains: A heat wave settled over the Northern Plains in late August, driving temperatures in the Dakotas and Minnesota up into the 90s and triple digits. Excessive heat advisories were in place as a result, and sources also talked of spotty hail damage from strong thunderstorms in parts of Minnesota.

The hot weather sped up the grain harvest, with combines rolling on spring wheat, barley, and oats in the region.

Sources reported little in the way of fertilizer activity as growers focused on the small grains harvest.

The anhydrous ammonia market in late August was quoted at $555/st FOB in Minnesota, while delivered ammonia in North Dakota was reported at the $570/st level for fill and $590/st for prepay.

Great Lakes: Hot, humid weather was reported in the Great Lakes region in late August, which made for great corn growing conditions. Crops were also aided by recent rains in both states.

Michigan sources tal

Urea

Asia, Black Sea, China, Eastern Cornbelt, Great Lakes, India, Indonesia, Market Watch, Northeast, Northern Plains, Pakistan, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf: The granular urea market continued to span a broad range last week, trading as low as $285/st FOB and as high as $305/st FOB.

One player said the lows were achieved early in the week and the market walked its way back up. However, bears say that any strength will not hold as Chinese imports are due in October.

Prills continue to show strength, and were still called $330-$335/st FOB.

Eastern Cornbelt: Sources continued to quote the low end of the granular urea market at $335-$340/st FOB Cincinnati, Ohio. The upper end of the regional range was pegged at $345-$355/st FOB, depending on location.

Western Cornbelt: The granular urea market was pegged at $335-$355/st FOB in the Western Cornbelt, with the low FOB St. Louis, Mo.

Northern Plains: Granular urea pricing FOB the Twin Cities had reportedly fallen to $330-$335/st FOB, down some $20/st from last report. Urea pricing in the Dakotas was down as well, with the dealer market pegged at $367/st FOB Carven, S.D., and $367-$392/st DEL in North Dakota, depending on location.

Great Lakes: Granular urea prices in the Great Lakes region were down from last report. The low end of the range was reported at the $345/st FOB level in southern Wisconsin, while Michigan contacts pegged the common dealer market in the $375-$385/st FOB range last week.

Northeast: Granular urea remained in a broad range at $345-$375/st FOB, with the low FOB East Liverpool, Ohio, and the upper end reported in the Philadelphia market.

Sources continued to report very favorable crop conditions in the Northeast, thanks to nearly ideal growing conditions this summer. Although temperatures have been below normal for much of the summer, well-timed rains have contributed to what one Pennsylvania contact described as “the best corn crop I’ve seen in 21 years.”

That assessment was supported by USDA’s weekly crop report, which placed fully 89 percent of Pennsylvania corn acreage in the good or excellent categories as of Aug. 25.

Pakistan: Keytrade came in with the lowest offer in a Japanese Aid tender to import US$21worth of urea.

Generally this type of tender is by invitation only and is based on the value of the aid grant rather than specific tonnage. Based on its offer, Keytrade will supply about 70,000 mt to Pakistan.

The tally for the tender follows.

Company US$/mt CFR
Keytrade 299.95
Transammonia 307.37
Agri-commodities 318.00
Samsung 318.50
Mitsui 318.70
Dragon Asia 319.80
Mitsubishi 322.98
Midgulf 335.74
Marubeni 340.00

Sources expect the tons to come from China.

According to Engro Corp., the domestic urea industry in Pakistan staged a strong comeback during the first six months of 2013, with a 13 percent increase in sales over last year due to better gas availability and lower imports. Urea prices als

Nitrogen Solutions

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

U.S. Gulf: Most players have been sensing a weaker UAN market, and last week it was put into action, with new trades reported in the $225-$237/st ($7.03-$7.41/unit) FOB range.

Sources speculated that recent exports and imports (East Coast) would both fall into the $220s/st FOB at NOLA.

Eastern Cornbelt: Illinois sources pegged the UAN-32 market in the $290-$295/st ($9.06-$9.22/unit) FOB range on the low end last week. The UAN-28 market was quoted at $260/st ($9.29/unit) FOB Cincinnati and $270/st ($9.64/unit) FOB Burns Harbor, Ind.

Western Cornbelt: UAN-32 remained at $285-$295/st ($8.91-$9.22/unit) FOB most terminals in the Western Cornbelt. One source reported spring prepay offers circulating at the $310/st ($9.69/unit) level FOB Sioux City, Iowa.

Northern Plains: The UAN-28 market was quoted at $265/st ($9.46/unit) FOB in Minnesota, and $310-$316/st ($11.07-$11.29/unit) DEL in North Dakota from Canadian shipping points.

Great Lakes: The UAN-28 market was quoted solidly at the $270/st ($9.64/unit) FOB level out of Michigan terminals, while UAN-32 pricing was pegged at roughly $295/st ($9.22/unit) FOB the Wisconsin market.

Northeast: Sources reported UAN-30 pricing in the $285-$295/st ($9.50-$9.83/unit) range FOB Baltimore, while UAN-32 pricing remained at the $320/st ($10.00/unit) FOB level out of terminals in upstate New York. The last done UAN-32 vessel business on the East Coast was reported in the $260s/mt CFR.

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