All Posts from April 20, 2015

Crops/Weather

California, Eastern Cornbelt, Market Watch, Pacific N.W., Western Canada, Western Cornbelt

Grain Futures: As of 4 p.m. on April 16, soybean futures were higher compared to the week before, while corn and wheat were down.

Corn for May 2015 was $3.7625/bushel, down from $3.78/bushel the week before. The July 2015 corn price fell to $3.8325/bushel from the prior week’s $3.8575/bushel, while trading of December 2015 corn contracts checked in at $4.0025/bushel, a fall from $4.035/bushel.

The May 2015 soybean price was $9.66/bushel, up from $9.535/bushel the week before. Soybeans for July 2015 firmed to $9.69/bushel from the previous week’s $9.5825/bushel, while soybeans for November 2015 were posted at $9.5275/bushel, up from $9.4525/bushel the week before.

Wheat for May 2015 was $4.945/bushel, down from the previous week’s $5.1875/bushel. July 2015 wheat was also down, at $4.9075/bushel from $5.175/bushel at last report. September 2015 wheat contracts traded at $4.9925/bushel, down from $5.255/bushel the week before.

Eastern Cornbelt: One week after severe storms pounded the region and produced at least one powerful tornado in northern Illinois on April 9, the Eastern Cornbelt continued to battle wet weather that delayed planting activity at mid-month.

The heavy moisture also produced flooding, particularly in the Ohio River Valley. Local reports said Louisville, Ky., has received more than 9 inches of rain so far in April, resulting in flood warnings posted along the Ohio River as the week advanced.

USDA reported that just 1 percent of the Ohio corn crop was planted by April 12, while growers in Illinois and Indiana had yet to make a mark.

Western Cornbelt: Much of the Western Cornbelt enjoyed relatively cooperative fieldwork weather last week, although thunderstorms and gusty winds were reported in southwestern Nebraska as the week advanced.

Although growers in Iowa and Nebraska had yet to plant any corn by April 12, USDA reported that Missouri growers had 4 percent of the crop in the ground by that date. Iowa and Nebraska were faring better on oats planting, however, with progress as of April 12 rated at 42 percent and 70 percent complete, respectively.

California: Sources reported brisk field activities in Central and Northern California, with growers starting on rice fertilization in the northern counties. “The San Joaquin Valley is some 2-3 weeks ahead, so the fertilizer season may end sooner because of the early start,” said one source.

USDA said 15 percent of the California cotton crop was planted by April 12, well behind the five-year average of 31 percent. Rice was 1 percent planted in the state by that date, which was equal to the average pace.

Water availability for the growing season remains a critical concern, however. Gov. Jerry Brown ordered mandatory reductions in water use on April 1 for the first time in California’s history. Although the new state initiatives did not take aim at agriculture, farmers have already taken a hit, particularly those who rely on access to federal water supplies.

One Central Valley source said last week that while growers in his immediate area will likely have 60-70 percent of their water for irrigation this year, some growing areas to the south are receiving no surface water and have very limited pumping capacity.

Pacific Northwest: A powerful winter storm dropped up to 8 inches of snow in parts of western Montana at midweek, and also blanketed areas of eastern Idaho. Snowfall was greater at higher elevations, and growers were thankful for the additional moisture after a much drier-than-normal winter in the region.

Good weather earlier in the month helped growers make great strides on spring planting in the region. “In Washington and Oregon, we must be luckier th

Iowa Fertilizer construction hits snag – Alert

Breaking Industry News

Construction of the Iowa Fertilizer Co. plant in Wever, Iowa, reportedly hit a snag over the weekend. The local press reported that work stopped at the facility on Friday, April 17.

Iowa Fertilizer issued a statement: “Iowa Fertilizer’s engineering, procurement and construction contractor has reassigned some of the work from a specific sub-contractor to other sub-contractors on the site including Iowa-based sub-contractors. Qualified labor will be assigned to these sub-contractors for continuing the work. Construction work will continue to progress on the job-site.”

“Iowa Fertilizer remains committed to Lee County and the economic revitalization that has occurred from this project. We continue to work for completion and operation in the fourth quarter of 2015.”

Philadelphia terminal to expand – alert

Breaking Industry News

USD Group LLC (USDG), via its wholly-owned subsidiary Northeast Energy Terminal LLC, has finalized a long-term lease agreement with the Philadelphia Regional Port Authority (PRPA) for use of the Port of Philadelphia’s Pier 122. Under the terms of the lease, USDG’s Northeast Energy Terminal will assume responsibility for existing dry bulk operations at the pier facility.

USDG is taking over a lease formerly held by Growmark Inc., according to the Philadelphia Inquirer, and is also buying domes and a loading crane from Growmark. The facility will continue to serve Growmark, but will expand to do other bulk commodities beyond fertilizer.

“USDG has decades of experience developing and managing large-scale multi-modal logistics facilities – experience we hope to use to further PRPA’s long-term vision for growth at Pier 122,” said Dan Borgen, USDG’s chairman, CEO and President. “We look forward to partnering with them to make that vision a reality.”

The lease was approved by PRPA’s board of directors at its March 17, 2015 meeting.

“USDG has the right experience to continue these operations and shares our commitment to maintaining and expanding the jobs and cargo at the terminal,” said Jerry Sweeney, chairman of the board of PRPA. “This agreement is good news for the Port of Philadelphia as we move forward at Pier 122.”

Included in the lease are Pier 122 and the associated dockage and equipment used for handling dry bulk cargo. Pier 122 and its deep-water berth feature ample and efficient logistics connections to domestic and international markets.

Yara writes down Lifeco investment – alert

Breaking Industry News

Yara International ASA reports that it has decided to write down the value of its Lifeco investment by US$112 million, leaving a remaining book value of $18 million.

Yara cited the worsening security outlook in Libya. Yara sees a high likelihood of a further deterioration in 2015 of the operating ability of the Lifeco joint venture plants. Yara said the jv’s feedstock and financial situation was already challenging.

Yara noted that the political and security situation in Libya has worsened rapidly, and may deteriorate further over the next year. In light of this, Yara is evaluating the operation of the plants on an ongoing basis in cooperation with the other partners, in order to protect the employees as well as the assets.

Yara said it will continue participating in the governance of Lifeco, with the aim of resuming full production once real improvements are seen in the security and political situation in Libya, creating a sustainable improved operating outlook for Lifeco.

The impairment will be reported as part of Yara’s first-quarter EBIT and EBITDA, under "Share of net income in equity-accounted investees."

Discipline expected for P&K oversupply

News, News Briefs

New York — In light of a global oversupply situation for nitrogen, potash, and phosphate, Green Markets Senior Analyst Neil Fleishman told Bloomberg Intelligence Webinar – Preparing the Field: Agchems 2015 – that producer discipline is expected for both potash and phosphates. Potash prices have bottomed and are slowly moving back up after the 2013 Belarusian Potash Co. breakup. While the industry is well supplied with new brownfield capacity, producers are not rushing to produce every possible ton. On the phosphate side, while Chinese exports have been a concern, Fleishman says China appears to be at the end of its phosphate expansion plans. He said MENA producers continue to run at reduced capacity to balance the market. Fleishman has a more bearish outlook for nitrogen; he expects capacity to grow rapidly in the next few years, led by urea. He believes the U.S. will soon become self-sufficient in urea and UAN, but will still need to import ammonia. China will continue to be a pivotal urea exporter, with strong exports expected again this year.

Ammonia

Ammonia, Black Sea, California, Eastern Cornbelt, Market Watch, Middle East, North Africa, Pacific N.W., Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa: Tampa business for May had not yet been concluded at press time, although sources were betting it would be lower than April’s $485/mt CFR, based on weaker global prices.

February saw a rush of imports, up 43 percent to 462,500 st from the year-ago 323,747, according to the U.S. Department of Commerce. July-February was up only 3 percent, however, to 3.79 million st from the year-ago 3.67 million st.

The May NYMEX natural gas price closed at $2.684/mmBtu on April 16, up from April 9’s $2.528/mmBtu.

Eastern Cornbelt: The ammonia market remained at $625-$640/st FOB regional terminals in the Eastern Cornbelt, with the lower numbers reported in Illinois and the higher end of the range in Indiana. Ammonia pricing out of Henderson, Ky., was also pegged at the $625/st FOB mark last week.

Western Cornbelt: Some sources speculated that Iowa’s preplant ammonia run was roughly 80 percent complete after another week of heavy activity. The dealer market remained at $610-$620/st FOB most terminals in Iowa and Missouri, depending on location, with the low end of the regional range reported at $590-$600/st FOB in Nebraska.

California: Calamco announced lower ammonia postings in California on April 1, with anhydrous ammonia dropping $15/st on that date, to $665/st DEL in California. Aqua ammonia postings fell to $181/st FOB from the previous $185/st FOB list price.

Agrium also announced new ammonia postings in the California market, with anhydrous prices dropping on April 7 to $665/st truck-DEL in Central California, and aqua moving $181/st FOB Yuba City.

Pacific Northwest: The anhydrous ammonia market was tagged at $650-$660/st DEL in the Pacific Northwest for actual sales, well below recent dealer postings in the $750-$770/st DEL range.

Aqua ammonia remained at $164-$169/st FOB in the region.

Western Canada: The anhydrous ammonia market was steady at $981-$1,026/mt DEL in Western Canada, depending on location.

Middle East: Reports peg the market just under $390/mt FOB. Sources said pressure from a lack of demand in Asia and continued production in the Arab Gulf spell ever lower prices.

Occasional spot deals were reported at just above $380/mt FOB. In addition to the gloomy prices for the few spot deals that do show up, sources said Asian buyers are taking the minimum their contracts require.

Producers are said to be willing to settle for a $450/mt CFR deal to Asia, but at present no one in Asia is willing to commit at that level. A deal earlier this month at that level is now considered too high for any potential buyer.

In the region, the Arab producers face the additional pressure of the lifting of sanctions against Iran. If the restrictions on banking and insurance transactions are lifted, sources report that more – and cheaper – Iranian ammonia will be available to the general market, instead of in just a few countries that have been working around the current sanctions.

Black Sea: Reports from North Africa say the price has dropped to $380/mt FOB based on the netback estimates on delivered product. Industry sources, however, are not so sure the math was done right.

Buyers are always playing up lower prices, said one source. While everyone agrees the market price is on a downward trajectory, some are not so sure it has dropped to the $380/mt FOB level just yet.

Sources say the operative word is “yet.” While demand is strong enough to prevent a free fall in prices, it is not enough to stop a gentle slide.

The lower gas price from Russia to Ukraine is not helping the situation, say sources. With lower input pric

Urea

Black Sea, California, China, Eastern Cornbelt, India, Market Watch, Middle East, Pacific N.W., Pakistan, U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf: While NOLA imports were generally reported as plentiful, sources said last week that a few vessel delays caused the market to pop.

As a result, prompt barges spanned a broad range as the week progressed. Players called the market as low as $260/st FOB as the week begin, before moving to $297/st FOB for a loaded barge at the end of the week.

Loaded, upriver barges were receiving a considerable premium, and were quoted as high as $285-$325/st FOB on a NOLA basis, depending on location. Sources said the industry was starting to see actual movement, which perked up price ideas for near-term product that was immediately available.

Just a few weeks out into May and June, however, price ideas fell off quite a bit. May was called in the $250s/st FOB.

Prill prices were lower at $260-$280/st FOB.

February urea imports were up 42 percent, to 868,377 st from the year-ago 611,160 st. July-February imports were up 30 percent, or about 1.3 million st, to 5.51 million from the year-ago 4.25 million st.

Eastern Cornbelt: The granular urea market was steady at $325-$345/st FOB in the Eastern Cornbelt, with the low reported in Cincinnati, Ohio, and the upper end out of inland terminals in the region.

Western Cornbelt: The granular urea market was steady at $325-$335/st FOB regional terminals in the Western Cornbelt, with the upper end reported in Iowa and the low quoted out of river locations in southern Missouri.

Sources reported a slightly firming urea market at Inola, Okla., with prices reportedly moving at midweek to $325-$330/st FOB, up from roughly $320/st FOB at last report.

California: Sources pegged the granular urea market at $395-$400/st FOB import terminals in California, down $5/st from last report, but there was still minimal new business.

Pacific Northwest: Sources reported a softer urea market in the Pacific Northwest last week. Granular urea was quoted at $375-$385/st FOB port terminals in the region, down $5-$10/st from last report. Rail-delivered urea was pegged in the $410-$420/st range in the region from Canada or Midwest shipping points, reflecting a roughly $15-$20/st drop.

Western Canada: Granular urea was reported at $645-$670/mt DEL in Western Canada, with the low in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia.

India: The STC tender received offers of nearly 2 million mt, but sources report that only 360,000 mt have been booked so far. Industry watchers note that this may be all that gets booked.

Major trading houses were blocked from participating in the tender because they were disqualified in the technical round. Sources say the companies were bounced from the tender because they did not agree to the payment methods laid out in the tender documents.

The documents included wording that said payment would only occur after STC got the money from the Indian government, instead of the standard practice of issuing a letter of credit. The wrinkle angered a number of the major trading houses. In the end, Amber, Aries, Ameropa, Dreymoor, Fertisul, Keytrade, Mekatrade, Quantum, and Sinochem were disqualified because they did not agree to the new payment routine.

The remaining 13 companies offered product in the upper $260s/mt CFR for an effective netback to China of the low-$250s/mt FOB and a couple of bucks more to Iran.

The tally of offers follows:

Off

The Week in Fertilizer Stocks

Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 107.21 106.23 93.87
CF Industries CF 292.96 284.81 247.72
CVR Partners UAN 13.90 13.80 20.64
Intrepid Potash IPI 12.22 11.60 14.91
Mosaic MOS 46.02 46.00 48.64
PotashCorp POT 33.11 32.53 35.01
Rentech Nitrogen RNF 15.35 14.09 18.00
Terra Nitrogen TNH 145.09 147.50 151.42
Distribution/Retail
Andersons Inc. ANDE 41.60 39.96 62.31
Deere & Co. DE 88.94 88.45 93.15
Scotts SMG 65.45 66.23 58.44

Nitrogen Solutions

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf: Barge prices continued to be under pressure last week, with most putting the market in the $245-$255/st ($7.66-$7.97/unit) FOB range. Sources said buyers are seeking East Coast vessel tons at $255/mt CFR, with seller price ideas most recently called $270/mt CFR.

February UAN imports were off 28 percent, to 242,385 st from the year-ago 337,767 st. July-February imports were up 17 percent, however, to 2.21 million st from the year-ago 1.89 million st.

Eastern Cornbelt: The low end of the UAN-28 market in the Eastern Cornbelt remained at $265-$270/st ($9.46-$9.64/unit) FOB Cincinnati, with the upper end pegged at $280-$285/st ($10.00-$10.18/unit) FOB inland tanks in Ohio and Indiana.

In the Illinois market, sources quoted UAN-32 at $305-$320/st ($9.53-$10.00/unit) FOB and $315-$325/st ($9.84-$10.16/unit) rail-DEL.

Western Cornbelt: UAN-32 pricing remained at $305-$315st ($9.53-$9.84/unit) FOB in the Western Cornbelt, with the low reported out of terminals in southern Missouri and the upper end in Iowa.

California: The UAN-32 market remained at $305-$320/st ($9.53-$10.00/unit) FOB in California, depending on location, with delivered tons pegged at the $340/st ($10.63/unit) level or higher in the state.

Pacific Northwest: The UAN-32 market was quoted at $350-$360/st ($10.94-$11.25/unit) DEL in the Pacific Northwest, down some $5-$10/st from last report. The upper end of the range reflected the April 9 posting from IRM for delivered tons in eastern Oregon and Washington.

Western Canada: The UAN-28 market remained at $427-$443/mt ($15.25-$15.82/unit) DEL in Western Canada, depending on location.

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