All Posts from October 20, 2014

Ammonium Nitrate

Ammonium Nitrate, California, Market Watch, Southeast, Southern Plains, U.S. Gulf, Western Cornbelt

U.S. Gulf: The last done barge business continued to be called $305/st FOB. A new import was reported to be destined for Tampa from Georgia.

Western Cornbelt: Ammonium nitrate was steady at $355-$360/st FOB in the Western Cornbelt.

Southern Plains: The Tulsa ammonium nitrate market was steady at $350-$360/st FOB for limited tons.

South Central: The ammonium nitrate market was quoted at $350-$355/st FOB terminals in the South Central region.

Southeast: The Tampa ammonium nitrate market was pegged at $370-$375/st FOB.

California: Agrium’s AN-20 posting firmed on Oct. 13 to $305/st truck-DEL in the California market, up $5/st from the company’s Sept. 1 reference price.

Canpotex signs lease with port authority

News, News Briefs

Saskatoon — Canpotex Terminals Ltd. announced that it has now received all required government environmental permits for its proposed potash export terminal at Prince Rupert and has signed a lease agreement with the Prince Rupert Port Authority (PRPA). Canpotex said the execution of the lease agreement is an interim step in the development of Canpotex’s proposed greenfield potash terminal on Ridley Island. Canpotex will make a final investment decision to proceed based on a variety of commercial factors, including construction costs and offshore potash market projections. No date has been set for making this decision. If a decision is made to proceed, the Potash Export Terminal investment would be approximately C$775 million, and would provide Canpotex with three separate gateways and rail corridors to the West Coast. Canpotex has invested approximately C$50 million to date in the proposed project, which includes C$15 million towards the PRPA’s Road Rail Utility Corridor.

SQM subject to new tax

News, News Briefs

Santiago — Sociedad Química y Minera de Chile S.A. (SQM) said Oct. 15 that it is subject to the obligations of the Chilean Income Tax Law including, when applicable, the payment of the corporate income taxes established by such law. On Sept. 29, 2014, Law 20,780 was published in the Official Gazette. This law modified the Chilean Income Tax Law and introduced a progressive increase in the First Category Tax, which will reach a rate of 25 percent beginning in 2017, subject to the application of the Attributed Income System or a rate of 27 percent beginning in 2018, subject to the application of the Semi-Integrated System. SQM said it will be will be affected by these modifications regardless of which of the two systems it chooses to apply. In accordance with International Financial Reporting Standards (IFRS), SQM said it must immediately recognize, in its consolidated statements of income, the effect that this increase will have on its deferred tax liabilities. SQM estimates that the effect, under the Semi-Integrated System, will be between US$55-$60 million. Once the final amount has been determined, it will be recognized and charged to profit in SQM’s interim consolidated financial statements for the third quarter of 2014, which will be published during the month of November 2014.

Transportation

Market Watch, U.S. Gulf

U.S. Gulf/River: Shippers were monitoring a system of showers and thunderstorms located roughly 600 miles east of the Caribbean, and expected the system to move westward over the next five days. Meteorologists gave the system a 20 percent chance of developing into a named storm.

On the Mississippi River, the last day for New Orleans-departing barges destined for points between Quincy, Ill., and Clinton, Iowa, is Oct. 21. Locks 12 and 13 will close for the navigation season Dec. 15, while Lock and Dam 5A will cease operations for the season on Dec. 8. The final day to pass through Lock 20 is Jan. 5, 2015. The locks are slated to reopen in March 2015.

Auxiliary chamber closures scheduled through Nov. 21 at the Ohio River’s Newburg Lock prompted navigation delays of 10-12 hours. The return of favorable river levels caused wickets to be lowered at Lock 52, with no delays reported as a result. Waits of about an hour were experienced at Willow Island, Belleville, Winfield Lock, R.C. Byrd Lock, Greenup, and Smithland.

Ongoing high flows at Olmstead Locks and Dam Project forced a tightening of tow restrictions. In addition to the longstanding southbound limit of 15 barges or less, northbound transit was limited last week to 24 barges.

A total river closure at Morgantown Lock on the Monongahela River will be in effect through Nov. 7 while lock repairs are conducted, and a mechanical failure at Braddock Lock and Dam forced the lock’s auxiliary chamber to close until further notice.
“Major delays” are expected at Winfield Lock on the Kanawha River when main chamber repairs – slated to last upwards of three months – begin in late November or early December.

Wait times at Industrial Lock in the Gulf area lessened to 12-14 hours on the conclusion of repairs to the St. Claude Avenue Bridge. Additionally, delays were reported in the West Canal at Bayou Sorrel (10-12 hours) and Port Allen Lock (4-6 hours).

Crops/Weather

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

Grain Futures: As of 4 p.m. on Oct. 16, corn, soybeans, and wheat were all higher compared to the week before.

December 2014 corn was posted at $3.5225/bushel, up from the previous week’s $3.4475/bushel. Corn for March 2015 was $3.6525/bushel, an increase from $3.5775/bushel the week before, and contracts for December 2015 corn were $3.97/bushel, also up from the prior week’s $3.90/bushel.

Soybean prices for November 2014 were $9.665/bushel, up from $9.42/bushel the week before. January 2015 soybeans were pegged at $9.7425/bushel, up from the prior week’s $9.50/bushel, and November 2015 soybeans rose to $9.7975/bushel from the previous week’s $9.64/bushel.

December 2014 wheat punched in at $5.17/bushel, up from the previous week’s $4.9325/bushel, while March 2015 wheat contracts traded at $5.2875/bushel, up from $5.0525/bushel the week before. Wheat for July 2015 also rose to $5.4275/bushel from the prior week’s $5.195/bushel.

Eastern Cornbelt: Severe thunderstorms pounded central and southern Illinois with rain, damaging winds, and at least seven confirmed tornados on Oct. 13. The storm system then pushed through Indiana and parts of Ohio, bringing wet weather to both states on Oct. 14.

The precipitation continued to slow the region’s harvest pace, with progress falling well behind the five-year average in both Illinois and Indiana. The regional soybean harvest was 26-29 percent complete as of Oct. 12, compared with 38-52 percent on average. The corn harvest was 35 percent complete in Illinois by that date, compared with 25 percent in Indiana and just 17 percent in Ohio.

Corn and soybean conditions remained very good despite the delays, with good or excellent ratings assigned to 79-83 percent of the acreage in Illinois and 74-77 percent in Indiana and Ohio.

Western Cornbelt: Iowa and Nebraska sources reported continued progress on the fall harvest last week. Southern Missouri growers, however, were slowed by severe storms early in the week, with some areas reporting tornado activity.

The corn harvest as of Oct. 12 was 51 percent complete in Missouri, well ahead of Nebraska’s 19 percent and Iowa’s 10 percent. Progress in all three states was well behind the five-year average, however. USDA assigned good or excellent ratings to fully 87 percent of Missouri’s corn crop last week, along with 75-76 percent of the acreage in Iowa and Nebraska.

The regional soybean harvest also trailed the average pace, with progress as of Oct. 12 rated at 45 percent complete in Nebraska, 39 percent in Iowa, and 16 percent in Missouri. USDA placed 74 percent of the region’s soybeans in the good or excellent categories last week. Missouri’s rice and cotton crops were 69 percent and 21 percent harvested, respectively, with 54 percent of the cotton acreage rated as good or excellent.

Southern Plains: Wet weather slowed the harvest pace in parts of Kansas and eastern Texas early in the week, but growers were hoping to be back in the field as the week progressed.

Drought conditions had eased considerably in the Southern Plains thanks to recent precipitation, but areas of extreme to exceptional drought – the two most severe categories – persisted in northern Texas, western Oklahoma, and northwestern New Mexico.

Kansas growers had 18 percent of the soybeans and 56 percent of the corn harvested by Oct. 12, with 52-56 percent of the acreage rated as good or excellent. Colorado’s corn harvest was only 14 percent complete by that date, compared with 70 percent in Texas, although crop conditions were better in both states, with 67-69 percent of the acreage falling in the good or excellent categories.

The cotton harvest was underway in

Sulfur

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

Tampa: Mosaic concluded contract negotiations with its sulfur suppliers last week, resulting in a fourth-quarter price of $129/lt CFR for molten sulfur delivered to Tampa. The new price represents a decline of $7/lt CFR from $136/lt CFR in the third quarter, and will be retroactive to Oct. 1.

PotashCorp had not settled with its suppliers as of Oct. 16, however, leaving the official Tampa price at $136/lt CFR for the time being.

Sources speculated that rapidly softening international markets contributed to the hastening of negotiations. Delivered prices at $140-$150/mt in China, spot levels quoted at $122/mt FOB in India, and a surprise $31/mt FOB cut to Saudi Aramco’s October price were all believed to contribute to the settlement.

China’s flagging sulfur market was widely viewed as depressing worldwide prices. The drop in delivered prices in China fueled perceptions that Chinese phosphate producers were having difficulty moving product, thus drastically reducing raw materials demand.

Mosaic’s recent production curtailment announcement played a part as well, reducing demand for the quarter and causing uncertainty in the domestic market. The company’s planned solid sulfur remelter was not believed to have played a significant role in the current settlement.

U.S. refinery operating capacity fell for a third consecutive period as more refineries entered their fall turnaround periods. Utilization for the week ending Oct. 10 was 88.1 percent of capacity, according to the U.S. Energy Information Administration, down 1.2 percent from the previous week’s 89.3 percent. Despite the drop, the weekly rate was still considerably higher than last year’s 86.2 percent and the five-year average of 85.3 percent.

Mirroring the fall in utilization, average daily crude inputs dropped to 15.321 million barrels/d, down from the prior week’s 15.554 million barrels/d.

U.S. Gulf: The Gulf price of sulfur was called $140-$145/mt FOB.

Vancouver: Sources reported a quiet Vancouver spot market, with last done quoted in a range of $140-$155/mt FOB.

The market may soon face downward pressure from softening international prices led by the Chinese sulfur market. Similarly, sources expected the downward trajectory of Mosaic’s fourth-quarter settlement to be replicated in the Vancouver market.

Canadian refiners Syncrude and Suncor both wrestled with unplanned shutdowns last week. Sources said Suncor was likely to return to production in 1-2 weeks, and Syncrude was targeting a late-October timeframe.

Alberta sulfur netbacks were unchanged at (-)$20-$80/mt.

West Coast: The price of prilled sulfur sold from the West Coast was quoted at $135-$140/mt FOB, down from $140-$145/mt FOB.

Fourth-quarter molten sulfur contracts were quoted in a range of $90-$130/lt FOB.

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

ADNOC: ADNOC sulfur was $150/mt for the month of October.

Aramco: Saudi Aramco’s October price was announced at $128/mt FOB, a drop of $31/mt FOB from $159/mt FOB in September.

Potash

Eastern Cornbelt, Indonesia, Market Watch, Potash Muriate, Southeast, Southern Plains, Sulfate of Potash Magnesia, U.S. Gulf, Western Cornbelt

U.S. Gulf: The potash barge market was starting to weaken last week. Most sources put the high at $370/st FOB, and others said the bottom had dropped to as low as $366/st FOB. The business was attributed to barge trades off import vessels.

Eastern Cornbelt: Potash was quoted at a firm $410-$420/st FOB in the Eastern Cornbelt, depending on grade and location.

Western Cornbelt: Potash pricing in the Western Cornbelt was steady at $410-$417/st FOB regional warehouses, with the low for red and the upper end for white granular. “There are still some issues on getting potash deliveries in,” said one source. “Other than that, it’s really quiet.”

Southern Plains: Potash pricing out of regional warehouses in the Southern Plains was pegged at a firm $410-$415/st FOB, up another $5-$10/st from last report.

Effective Oct. 2, Intrepid’s potash postings FOB Carlsbad, N.M., firmed to $405/st FOB for 60 percent standard, $410/st FOB for 60 percent granular and 62 percent standard, and $417/st for 62 percent granular and Super Sol 62 percent. Those levels were up $20/st from Intrepid’s May 30 postings.

Sulfate of potash magnesia was steady at $365-$380/st FOB Carlsbad, depending on grade.

South Central: Potash was tagged at a firm $405-$415/st FOB warehouses in the South Central region, with the low reported in the Memphis market.

Southeast: The potash market was pegged at $407-$415/st FOB and $410-$420/st rail-DEL in the Southeast for limited Canadian tons. There were reports of potash imports for as low as $390/st FOB in the region on a spot basis, but new sales at that level were not confirmed.

Malaysia: Canpotex has reportedly inked new business into the country for as high as $350/mt CFR. Southeast Asia standard had been a weaker market in past months, with competition from BPC keeping a lid on prices. A much higher standard price here may bode well for first-half contracts to India and China.

Phosphates

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

Central Florida: Trading on the Central Florida phosphate market remained in a holding pattern last week. Sources fingered the late corn harvest as a primary drag on commerce. A stubborn run of cold and wet conditions caused widespread delays again last week, which in turn stalled the application of fall fertilizer.

Rail-loaded DAP was steady at $435/st FOB, while material shipped by truck commanded a premium of about $5/st FOB. MAP remained difficult or impossible to come by, but remained on par with Mosaic’s $455/st FOB posted price. Truck prices for MAP were expected to run $460/st FOB.

Phosphate availability in the region continued to be “extremely limited,” with producers reportedly prioritizing October export commitments over local spot demand.

U.S. Gulf: The NOLA barge market spent another week in the doldrums, sources said. Confirmed transactions were scarce, and observers pointed to low NOLA inventory as one possible factor. Demand wasn’t all that high either, according to sources, and the lack of activity saw prices drifting lower.

Most industry watchers put recent transactions in a range of $405-$415/st FOB, down from $420-$430/st FOB the previous week. A vocal minority believed DAP had held its value, calling the high end of the market closer to $425/st FOB. Transactions at that level went unconfirmed, however.

Traders were divided on the price of open-origin DAP. Some believed the product – most often sourced from Chinese producers in the current season – had essentially achieved price parity with non-Chinese tons. Others disagreed, however, quoting the market around $395-$400/st FOB and claiming the imported material was still discounted by a few dollars compared to domestic.

Producers cited persistent upriver demand, particularly in the Arkansas and Oklahoma markets, with barge transactions reported in a NOLA-equivalent range of $440-$455/st FOB.

The January paper market was called $388-$395/st FOB, with the higher end of the range offered later in the week.
Overall supply was questioned by a number of industry players, who interpreted the lax activity of the previous two weeks as sign of a potential inventory shortfall. “The volume of trades compared to two weeks ago is night and day,” one source said.

“Producers are very reluctant to drop prices and traders can’t hold positions very long, so the fact that we’re seeing so few transactions leads me to believe there just isn’t much inventory left at NOLA,” the source continued. “I believe that if a fellow had spot tons loaded and available at NOLA, he’d be able to sell it, no problem.”

Bidders in the low $400s/st were present in the market, though they found few – if any – takers. Some were reportedly trying to leverage the continued presence of cheaper Chinese DAP into reduced prices on domestic product. One source noted that although Chinese-sourced DAP has traditionally been inferior in quality to domestically produced product, this season’s Chinese offerings are “surprisingly not bad.” As a result, some bidders have reportedly argued for a tighter spread than in past season.

The delayed corn harvest also remained a source of consternation. Slowed by persistent cold and wet weather, USDA estimated that just 24 percent of corn crop had been harvested nationally as of Oct. 12, well behind the five-year average of 43 percent.

Some saw the potential for an energized barge market, however, particularly if a window of favorable weather results in a buying push for the fall application season.

The NOLA barge market was quoted in a range of $405-$415/st FOB for DAP, down from the previous week’s $420-$430/st FOB. Sources quoted the last done MAP bus

This Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 83.49 85.03 84.26
CF Industries CF 253.85 271.05 208.94
CVR Partners UAN 11.90 13.07 18.02
Intrepid Potash IPI 14.07 13.51 15.48
Mosaic MOS 40.90 42.05 45.93
PotashCorp POT 31.70 32.51 32.05
Rentech Nitrogen RNF 11.21 10.98 28.59
Terra Nitrogen TNH 136.88 138.79 202.21
Distribution/Retail
Andersons Inc. ANDE 56.58 57.48 70.60
Deere & Co. DE 84.12 81.15 82.97
Scotts SMG 55.12 55.51 55.89
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